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CREDIT AGREEMENT
Dated as of
August 16, 2001
among
Flag Asia Limited,
as the Company
Westdeutsche Landesbank Girozentrale, New York Branch
as the Administrative Agent
THE ROYAL BANK OF SCOTLAND PLC
as the Documentation Agent
Westdeutsche Landesbank Girozentrale, New York Branch,
as the Deed Trustee
Westdeutsche Landesbank Girozentrale, New York Branch,
as Syndication Agent
Westdeutsche Landesbank Girozentrale, New York Branch
AND THE LENDERS LISTED HEREIN,
as the Lenders
-----------------------------------------
Westdeutsche Landesbank Girozentrale, New York Branch,
as the Lead Arranger
-----------------------------------------
Construction and Permanent Financing of a
10,000 Kilometer Submarine Fiberoptic Cable System
Connecting Japan, Hong Kong, Korea and Taiwan
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TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms.................................................................2
SECTION 1.2. Classification of Loans and Borrowings.......................................40
SECTION 1.3. Terms Generally..............................................................41
SECTION 1.4. Accounting Terms; GAAP.......................................................41
ARTICLE II
COMMITMENTS AND LOANS
SECTION 2.1. Commitments; Conversion Date.................................................41
SECTION 2.2. Loans and Borrowings.........................................................42
SECTION 2.3. Requests for Borrowings......................................................42
SECTION 2.4. Funding of Borrowings........................................................43
SECTION 2.5. Interest Elections...........................................................44
SECTION 2.6. Termination and Reduction of Commitments.....................................45
SECTION 2.7. Repayment of Loans; Evidence of Debt.........................................46
SECTION 2.8. Optional Prepayments of Loans................................................47
SECTION 2.9. Mandatory Prepayments........................................................48
SECTION 2.10. Fees.........................................................................49
SECTION 2.11. Interest.....................................................................50
SECTION 2.12. Alternate Rate of Interest; Illegality.......................................51
SECTION 2.13. Increased Costs..............................................................52
SECTION 2.14. Break Funding Payments.......................................................53
SECTION 2.15. Taxes........................................................................53
SECTION 2.16. Payments Generally; Etc......................................................54
SECTION 2.17. Mitigation Obligations; Replacement of Lenders...............................56
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Financial Condition..........................................................57
SECTION 3.2. No Material Adverse Effect...................................................57
SECTION 3.3. Organization; Existence; Business............................................57
SECTION 3.4. Compliance with Law..........................................................58
SECTION 3.5. Power and Authorization; Enforceable Obligations.............................58
SECTION 3.6. Capital and Corporate Structure..............................................59
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PAGE
SECTION 3.7. Governmental Actions, Permits, Etc...........................................59
SECTION 3.8. No Legal Bar.................................................................59
SECTION 3.9. No Proceeding or Litigation..................................................60
SECTION 3.10. No Default, Event of Default or Event of Loss................................60
SECTION 3.11. Ownership of Property; Liens; Common Stock...................................61
SECTION 3.12. Taxes........................................................................62
SECTION 3.13. Federal Regulations..........................................................62
SECTION 3.14. ERISA........................................................................62
SECTION 3.15. Investment Company Act.......................................................63
SECTION 3.16. Full Disclosure..............................................................63
SECTION 3.17. Registered Office; Principal Place of Business, Etc..........................63
SECTION 3.18. Intellectual Property........................................................63
SECTION 3.19. Sufficiency of Project Documents.............................................64
SECTION 3.20. Environmental Matters........................................................64
SECTION 3.21. Commercial Insurance.........................................................64
SECTION 3.22. Immunity.....................................................................64
SECTION 3.23. Foreign Corrupt Practices Act................................................64
SECTION 3.24. Fees and Enforcement.........................................................65
SECTION 3.25. Enforcement; Performance.....................................................65
SECTION 3.26. Disputes.....................................................................65
SECTION 3.27. Indebtedness.................................................................65
SECTION 3.28. Other Acts...................................................................65
SECTION 3.29. Project Costs................................................................66
SECTION 3.30. Submission to Jurisdiction...................................................66
SECTION 3.31. Taxation.....................................................................66
SECTION 3.32. Representations and Warranties...............................................66
ARTICLE IV
CONDITIONS
SECTION 4.1. Closing Date.................................................................66
SECTION 4.2. Loans........................................................................72
SECTION 4.3. Conversion Date..............................................................76
ARTICLE V
AFFIRMATIVE COVENANTS
SECTION 5.1. Completion of the Project....................................................78
SECTION 5.2. Financial Statements and Other Information...................................78
SECTION 5.3. Reports; Other Information...................................................80
SECTION 5.4. Payment of Obligations.......................................................81
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PAGE
SECTION 5.5. Existence....................................................................81
SECTION 5.6. Compliance with Laws.........................................................81
SECTION 5.7. Performance and Enforcement of Agreements....................................81
SECTION 5.8. Taxes and Claims.............................................................82
SECTION 5.9. Notices......................................................................82
SECTION 5.10. Insurance....................................................................83
SECTION 5.11. Fiscal Year..................................................................84
SECTION 5.12. Use of Proceeds..............................................................84
SECTION 5.13. Interest Rate Protection.....................................................84
SECTION 5.14. Capacity Sales Agreement Letters of Credit...................................84
SECTION 5.15. Governmental Actions and Rights-of-Way.......................................84
SECTION 5.16. Cooperation with Independent Engineer........................................85
SECTION 5.17. Revenue Account..............................................................85
SECTION 5.18. Maintenance of Process Agent.................................................85
SECTION 5.19. System Operation and Maintenance.............................................85
SECTION 5.20. Event of Loss................................................................85
SECTION 5.21. Books and Records; Inspection Rights.........................................86
SECTION 5.22. Foreign Corrupt Practices Act................................................87
SECTION 5.23. Intellectual Property........................................................87
SECTION 5.24. Operating Budgets and Operating Reports......................................87
SECTION 5.25. Spare Parts..................................................................88
SECTION 5.26. Material Real Estate Assets..................................................88
SECTION 5.27. Notices of Assignment........................................................88
SECTION 5.28. NACS Transfer................................................................88
SECTION 5.29. Foreign Licenses - Japan.....................................................89
SECTION 5.30. Foreign Licenses - Hong Kong.................................................90
SECTION 5.31. Foreign Security.............................................................90
SECTION 5.32. Further Assurances...........................................................91
ARTICLE VI
NEGATIVE COVENANTS
SECTION 6.1. Indebtedness.................................................................91
SECTION 6.2. Liens........................................................................92
SECTION 6.3. Fundamental Changes..........................................................92
SECTION 6.4. Sale of Assets...............................................................93
SECTION 6.5. Investments, Acquisitions, Etc...............................................93
SECTION 6.6. Restricted Payments..........................................................95
SECTION 6.7. Limitations on Issuance of Interests.........................................95
SECTION 6.8. Limitations on Transfers of Interests........................................96
SECTION 6.9. Payment of Construction Costs; Operating Budget..............................96
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PAGE
SECTION 6.10. Amendment of Project Documents; Project Scope................................97
SECTION 6.11. Termination, Assignment of Project Documents.................................98
SECTION 6.12. Approval of Additional Contracts.............................................99
SECTION 6.13. Sales of Capacity............................................................99
SECTION 6.14. Acceptance of Project.......................................................100
SECTION 6.15. Leases......................................................................100
SECTION 6.16. Change of Office............................................................101
SECTION 6.17. Change of Name..............................................................101
SECTION 6.18. Transactions with Affiliates................................................101
SECTION 6.19. Sale and Leaseback..........................................................101
SECTION 6.20. Capital Expenditures; Other Purchases of Assets.............................102
SECTION 6.21. Unrelated Activities; Abandonment...........................................102
SECTION 6.22. Set-off.....................................................................102
SECTION 6.23. Subsidiaries................................................................102
SECTION 6.24. Concentration of Cash.......................................................103
SECTION 6.25. Amendments of Organizational Documents......................................104
SECTION 6.26. Immunity....................................................................104
SECTION 6.27. Restrictive Agreements......................................................104
SECTION 6.28. Cumulative Capacity Sales Revenue...........................................104
SECTION 6.29. Present Value Coverage Ratio................................................105
SECTION 6.30. Interest Coverage Ratio.....................................................105
ARTICLE VII
EVENTS OF DEFAULT
ARTICLE VIII
ACCOUNTS
SECTION 8.1. Creation of Accounts........................................................111
SECTION 8.2. Required Deposits into the Accounts.........................................112
SECTION 8.3. Deposits Held as Cash Collateral............................................113
SECTION 8.4. Source of Payments; Deposits Irrevocable....................................114
SECTION 8.5. Books of Account; Statements................................................114
SECTION 8.6. Location of the Accounts....................................................114
SECTION 8.7. Receipt by the Company......................................................115
SECTION 8.8. Pre-Sale Proceeds Account...................................................115
SECTION 8.9. Construction Account........................................................116
SECTION 8.10. Debt Proceeds Account.......................................................117
SECTION 8.11. Revenue Account.............................................................117
SECTION 8.12. Debt Reserve Account........................................................119
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PAGE
SECTION 8.13. Operating Reserve Account...................................................119
SECTION 8.14. Current Account.............................................................120
SECTION 8.15. Insurance Proceeds Account..................................................120
SECTION 8.16. Special Payment Account.....................................................121
SECTION 8.17. VAT Account.................................................................121
SECTION 8.18. Sales and Issuances Proceeds Account........................................121
SECTION 8.19. Excess Revenue Account......................................................122
SECTION 8.20. Permitted Sources Account...................................................123
SECTION 8.21. Capacity Upgrades Reserve Account...........................................123
SECTION 8.22. Residual Project Costs......................................................123
SECTION 8.23. Delivery of Officer's Certificates; Timing of Payments......................124
SECTION 8.24. Release of Excess Amounts...................................................124
SECTION 8.25. Event of Default............................................................124
SECTION 8.26. Investment..................................................................125
SECTION 8.27. Statements of Accounts......................................................125
SECTION 8.28. Value.......................................................................125
SECTION 8.29. Other Determinations........................................................126
SECTION 8.30. Sales of Permitted Investments..............................................126
SECTION 8.31. Customer Upgrade Account....................................................126
SECTION 8.32. Available Cash..............................................................126
SECTION 8.33. Termination.................................................................127
ARTICLE IX
THE ADMINISTRATIVE AGENT
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices.....................................................................129
SECTION 10.2. Waivers; Amendments.........................................................130
SECTION 10.3. Expenses; Indemnity; Damage Waiver..........................................132
SECTION 10.4. Successors and Assigns; Consent and Agreement...............................134
SECTION 10.5. Survival....................................................................136
SECTION 10.6. Counterparts; Integration; Effectiveness....................................136
SECTION 10.7. Severability................................................................137
SECTION 10.8. Right of Setoff.............................................................137
SECTION 10.9. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS..................137
SECTION 10.10. Waiver of Sovereign Immunity................................................139
SECTION 10.11. Judgment Currency...........................................................139
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PAGE
SECTION 10.12. Damage Waiver...............................................................139
SECTION 10.13. WAIVER OF JURY TRIAL........................................................140
SECTION 10.14. Headings....................................................................140
SECTION 10.15. Removal of Consultants......................................................140
SECTION 10.16. Confidentiality.............................................................140
ARTICLE XI
THE DEED TRUSTEE
SECTION 11.1. Appointment of Deed Trustee.................................................141
SECTION 11.2. Directions of Administrative Agent..........................................142
SECTION 11.3. Relationship................................................................142
SECTION 11.4. Reliance....................................................................143
SECTION 11.5. Information.................................................................143
SECTION 11.6. The Deed Trustee Individually...............................................144
SECTION 11.7. Documentation...............................................................144
SECTION 11.8. Default.....................................................................144
SECTION 11.9. Indemnity...................................................................145
SECTION 11.10. Exoneration.................................................................145
SECTION 11.11. Amendments..................................................................145
SECTION 11.12. Resignation.................................................................145
SECTION 11.13. Security Documents..........................................................147
SECTION 11.14. Co-Deed Trustees............................................................148
SECTION 11.15. Release of Security.........................................................149
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SCHEDULES:
Schedule 1.1(i) Certain Calculations
Schedule 1.1(ii) Commitments
Schedule 1.1(iii) Principal Payment Dates/Amortization
Schedule 1.1(iv) Project Budget
Schedule 1.1(v) Project Timetable
Schedule 1.1(vi) Schedule of Sources and Uses
Schedule 1.1(vii) Applicable Margin/Commitment Fees
Schedule 3.6 Capital and Corporate Structure
Schedule 3.7(b) Governmental Acts and Rights of Way
Schedule 3.9 Litigation
Schedule 3.11(a) Real Estate Assets and Leases
Schedule 3.11(b) Collateral Recordings and Filings
Schedule 3.19(b) Contractual Obligations
Schedule 5.10 Insurance
Schedule 6.18 Transactions with Affiliates
Schedule 10.1 Notice Addresses
EXHIBITS:
Exhibit A Assignment Agreement
Exhibit B Borrowing Notice
Exhibit C Capacity Sales Agreement Provisions
Exhibit D Subsidiary Guarantee Agreement
Exhibit E Shareholder Pledge Agreement
Exhibit F-1 Company Security Agreement (Bermuda)
Exhibit F-2(I) Company Security Agreement (Hong Kong) (Company)
Exhibit F-2(II) Company Security Agreement (Hong Kong) (Affiliate)
Exhibit F-2(III) Deed of Mortgage of Shares (Hong Kong)
Exhibit F-3 Company Security Agreement (Japan)
Exhibit F-4 Company Security Agreement (Korea) (Security Assignment
Agreement)
Exhibit F-5 Company Security Agreement (U.K.)
Exhibit F-6 Company Security Agreement (U.S.)
Exhibit G Continuation/Conversion Notice
Exhibit H Form of Consent and Agreement
Exhibit I Projections
Exhibit J Expense Certificate
Exhibit K-1 Capacity Sales Agreement Letter of Credit (Purchaser as
Account Party)
Exhibit K-2 Capacity Sales Agreement Letter of Credit (Company as
Account Party)
Exhibit L-1 Construction Loan Note
Exhibit L-2 Term Loan Note
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Exhibit M-1 Legal Opinion of Bermuda Counsel to the Company and the
Sponsor
Exhibit M-2 Legal Opinion of
New York Counsel to the Company and the
Sponsor
Exhibit M-3 Legal Opinion of English counsel to the Company with
respect to the Construction Contract and certain other
documents
Exhibit X-0 Xxxxx Xxxxxxx xx Xxx Xxxx Counsel to the Administrative
Agent and Lenders
Exhibit X-0 Xxxxx Xxxxxxx xx Xxxx Xxxx Counsel to the Company and the
Sponsor
Exhibit M-6 Legal Opinion of Japanese Counsel to the Company and the
Sponsor
Exhibit M-7 Legal Opinion of Korean Counsel to the Company and the
Sponsor
Exhibit M-8 Legal Opinion of English Counsel to the Company and the
Sponsor
Exhibit M-9 Legal Opinion of Irish counsel to the Company and the
Sponsor
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of August 16, 2001 (as amended, supplemented
or otherwise modified from time to time, this "AGREEMENT"), among FLAG ASIA
LIMITED, a company organized and existing under the laws of Bermuda (the
"COMPANY"), the Lenders (as defined herein), WESTDEUTSCHE LANDESBANK
GIROZENTRALE,
NEW YORK BRANCH ("WESTLB"), as lead arranger (the "LEAD
ARRANGER"), WestLB, as administrative agent for the Lenders and as security
agent for the Secured Parties (in such capacities, the "ADMINISTRATIVE AGENT"),
WestLB, as the Deed Trustee (as defined herein), WestLB, as syndication agent
(the "SYNDICATION AGENT"), and THE ROYAL BANK OF SCOTLAND PLC, as documentation
agent (the "DOCUMENTATION AGENT").
WITNESSETH:
WHEREAS, capitalized terms used in these recitals shall have the
meanings ascribed thereto in Section 1.1;
WHEREAS, the Company and certain of its Affiliates propose to develop,
construct, own, provide, operate and sell Capacity on an integrated optical
fibre cable system linking Japan, Hong Kong S.A.R and South Korea, together with
related cable stations (collectively, "FWACS");
WHEREAS, Level 3 (Bermuda) Ltd. and certain of its Affiliates
(collectively, "LEVEL 3") are in the process of developing and constructing an
integrated optical fibre cable system linking Japan and Hong Kong S.A.R with a
proposed spur to Taiwan, together with related cable stations (collectively,
"NACS");
WHEREAS, the Company and Level 3 have entered into a Submarine Cable
System Development Agreement, dated as of December 29, 2000 (the "DEVELOPMENT
AGREEMENT") pursuant to which, amongst other things, the Company and Level 3
have agreed to combine the NACS and FWACS in order to create the FLAG North
Asian Loop System (together with the Backhaul Elements (as defined below), the
"FNAL SYSTEM" or the "PROJECT"), and, in furtherance of such agreement, Level 3
desires to transfer to FLAG all of Level 3's right, title and interest in the
NACS (except as otherwise specified in the Development Agreement) and FLAG is
willing to accept such transfer in accordance with the provisions of the
Development Agreement;
WHEREAS, the Company will operate and maintain the FNAL System and be
responsible for integrating, with the cooperation of Xxxxx 0, the NACS and FWACS
into the FNAL System;
WHEREAS, the Company and certain of its Affiliates propose to develop,
lease, receive (by way of assignment, right of use, lease or otherwise) from
Xxxxx 0 xxx/xx xxxxxxxx the Backhaul Elements;
EXECUTION
WHEREAS, pursuant to the Development Agreement, the Company and Level 3
agree to share in the construction costs of each of the NACS and FWACS and the
cost of developing the FNAL System all in accordance with the Development
Agreement;
WHEREAS, pursuant to the Fiber Pair Agreements (as defined below), and
prior to the Transfer Date (as defined below), the Company will own three fiber
pairs on the NACS and Level 3 will own three fiber pairs on the FWACS, and,
following the Transfer Date, the Company will own the FNAL System (subject to
Level 3's ownership interest in (i) three fiber pairs on the FNAL System and
other Separately Owned Property of Level 3 and (ii) the Shared Property);
WHEREAS, in order to finance project costs associated with the design,
engineering, construction and installation of the Project, the Sponsor has
agreed (i) to make, or cause the Shareholder to make, cash equity contributions
to the Company in an aggregate amount of not less than $193,000,000, (ii) to
provide advanced cash equity proceeds to cover the unfunded obligations of Level
3 under the Development Agreement in an aggregate amount of up to $302,000,000
(subject to adjustment in accordance with Development Agreement) and (iii) to
fund the OpEx Equity (as defined below) in an aggregate amount of up to
$15,000,000;
WHEREAS, in order (a) to finance the remaining project costs of the
Company associated with the design, engineering, construction and installation
of the Project, (b) to pay transaction, legal, financing (including interest
expense and fees) and other related costs, (c) to repay Advance Pre-Sales Equity
to the extent permitted herein and (d) to fund operating and maintenance costs
and expenses, the Company has requested that the Lenders provide certain
extensions of credit hereunder to the Company consisting of Construction Loan
Commitments in an aggregate principal amount of $300,000,000; and
WHEREAS, in order to secure and support the Company's obligations to
the Lenders under the Financing Documents, the Company, its Subsidiaries,
certain Affiliates of the Company and the Shareholder 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.
Capitalized terms used herein shall have the meanings assigned to them
as follows
11
(such definitions to be equally applicable to both the singular and plural forms
of the terms defined). Any term defined by reference to an agreement, instrument
or other document shall have the meaning so assigned to it whether or not such
agreement, instrument or other document is in effect.
"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.
"ACCEPTANCE" shall mean any of Acceptance (Phase 1), Acceptance (Phase
2) or Acceptance (Final Phase).
"ACCEPTANCE (FINAL PHASE)" means the earlier to occur of (i) the
tendering by the Company to the Contractor (with the consent of the Independent
Engineer) of the Certificate of Commercial Acceptance (Final Phase) and (ii) the
provision of the Certificate of Provisional Acceptance (Final Phase).
"ACCEPTANCE (PHASE 1)" means the earlier to occur of (i) the tendering
by the Company to the Contractor (with the consent of the Independent Engineer)
of the Certificate of Commercial Acceptance (Phase 1) and (ii) the provision of
the Certificate of Provisional Acceptance (Phase 1).
"ACCEPTANCE (PHASE 2)" means the earlier to occur of (i) the tendering
by the Company to the Contractor (with the consent of the Independent Engineer)
of the Certificate of Commercial Acceptance (Phase 2) and (ii) the provision of
the Certificate of Provisional Acceptance (Phase 2).
"ACCOUNTS" shall be the collective reference to the Revenue Account,
the Current Account, the Construction Account, the Pre-Sale Proceeds Account,
the Debt Proceeds Account, the Debt Reserve Account, the Operating Reserve
Account, the Insurance Proceeds Account, the Special Payment Account, the Sales
and Issuances Proceeds Account, the Excess Revenue Account, the Permitted
Sources Account, the VAT Account, the Capacity Upgrades Reserve Account and each
other account established and maintained pursuant to Article VIII (excluding the
Customer Upgrades Account).
"ADDITIONAL BORROWING AMOUNT" shall mean as defined in Section 4.2(b).
"ADDITIONAL CONTRACT" shall mean each contract entered into by the
Company or any Subsidiary thereof after the Closing Date (other than Capacity
Sales Agreements, Intra-Group Agreements, employment contracts and contracts
involving payments by or to the Company of less than $1,000,000 annually).
"ADJUSTED LIBO RATE" shall mean, with respect to any Eurodollar Loan
for any Interest Period, an interest rate per annum equal to (a) the LIBO Rate
for such Interest Period multiplied by (b) the Statutory Reserve Rate.
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"ADMINISTRATIVE AGENT" shall have the meaning ascribed thereto in the
preamble hereof, together with each of its successors hereunder.
"ADVANCE PRE-SALES EQUITY" shall mean the cash equity contributions to
be made by the Sponsor and/or the Shareholder in an amount equal to (i) the
Xxxxx 0 Xxxxxxxx Xxxxxx XXXX (xx) the actual amount of Level 3 Proceeds paid by
Xxxxx 0 and received by the Contractor, the NACS Contractor or other Persons to
whom Level 3 Proceeds are payable as of the initial Borrowing Date, as certified
by a Responsible Officer of the Company.
"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 is under common Control with the Person specified.
"ALCATEL" shall mean Alcatel SA, a corporation organized under the laws
of France.
"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 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 (including all export laws and regulations related thereto),
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 in PART I OF
SCHEDULE 1.1.(vii) annexed hereto.
"APPLICABLE PERCENTAGE" shall mean, with respect to the Construction
Loan Commitment of any Lender at any time of determination, the percentage of
the total unused Construction Loan Commitments and outstanding Construction
Loans represented by such Lender's unused Construction Loan Commitment and
outstanding Construction Loans. To the extent applicable, if any of the
Commitments has terminated or expired, the Applicable Percentages shall be
determined based upon the applicable Commitments most recently in effect, giving
effect to any assignments.
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"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.
"ASSIGNED DOCUMENTS" shall be the collective reference to each
agreement which is being assigned by the Company or any Subsidiary of the
Company to the Administrative Agent pursuant to the relevant 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 accordance with Section 10.4, substantially in the form of EXHIBIT A or
any other form approved by the Administrative Agent.
"BACKHAUL AGREEMENTS" means those agreements entered into, or assumed,
by the Company, its Subsidiaries, or Affiliates to effect the leasing,
purchasing or construction, operating, financing and ownership arrangements for
the Backhaul Elements.
"BACKHAUL ELEMENTS" means the Japanese Backhaul Element, the Korean
Backhaul Element, the Hong Kong Backhaul Element and the Taiwan Backhaul
Element.
"BOARD" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWING" shall mean Loans of the same Class and Type, made,
converted or continued on the same date and (in the case of Eurodollar Loans) as
to which a single Interest Period is in effect.
"BORROWING DATE" shall mean the last Business Day of each month, unless
another Business Day is otherwise specified to be the Borrowing Date for any
calendar month by the Company in a written notice at least thirty (30) days
prior to such newly specified Business Day, in which case such specified
Business Day shall be the Borrowing Date for that calendar month for all
purposes of the Financing Documents (including the making of Construction Loans
under this Agreement).
"BORROWING NOTICE" shall mean a notice from the Company, executed by a
Responsible Officer of the Company, substantially in the form of EXHIBIT B.
"BUDGET CATEGORY" shall mean each of the categories under the Project
Budget.
"BUDGET CATEGORY AMOUNT" shall mean the maximum aggregate amount which
may be drawn down under the Construction Funding Facilities in respect of any
Budget Category.
"BUSINESS DAY" shall mean any day that is not a Saturday, Sunday or
other day on which
14
commercial banks in
New York City, Hong Kong and Tokyo 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.
"CABLE BUILDING" shall have the meaning ascribed thereto in the
Development Agreement.
"CABLE STATION AGREEMENT" shall have the meaning ascribed thereto in
the Development Agreement.
"CABLE STATION CONSTRUCTION AGREEMENTS" shall mean the Cable Station
Agreement relating to Korea and the agreement to be entered into with a landing
party in Taiwan with respect to the construction of a landing station and Cable
Building in Taiwan.
"CAPACITY" shall mean the service offered by the Project consisting of
the right of use of a defined portion of the Project (including, for the
avoidance of doubt, (i) capacity on other telecommunications systems acquired by
the Company in accordance with the terms hereof and (ii) Customer Upgrades) for
~telecommunication (including sales of fiber pairs or half fiber pairs (or
capacity thereon) and wavelengths and the leasing of a defined portion of the
Project for telecommunication), or, where the context so requires, the fraction
of total capacity for telecommuni cation service available on the Project on the
relevant segment of the Project referred to in the context of which the term is
used.
"CAPACITY COMMITMENTS" shall mean the aggregate amount of the cash
payments in Dollars or, subject to the FX Conditions, euros or yen, that the
Capacity Purchasers or other Persons are obligated to make to the Company or its
Subsidiaries for the purchase of Capacity pursuant to Capacity Sales Agreements.
"CAPACITY PURCHASER" shall mean any Person which commits to purchase or
lease or otherwise acquire rights with respect to Capacity pursuant to a
Capacity Sales Agreement.
"CAPACITY SALES AGREEMENTS" shall mean all agreements for the sale,
lease or other disposition of Capacity entered into in accordance with Section
6.13 in each case as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"CAPACITY SALES AGREEMENT LETTERS OF CREDIT" shall mean the letters of
credit to be issued or confirmed by financial institutions which constitute
Qualifying Banks (as of the date of such issuance or confirmation) on behalf of
certain Capacity Purchasers to support such Capacity Purchaser's payment
obligations under the Capacity Sales Agreement to which such Capacity Purchaser
is a party, such letters of credit to be in the form of EXHIBIT K-1 or EXHIBIT
K-2, as the same may be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
15
"CAPACITY UPGRADES" shall mean (a) any and all physical additions,
improvements or upgrades to the Project that are contemplated by the
Construction Contract or the NACS Construction Contract or in connection with
lighting the Backhaul Elements to upgrade Capacity in increments of at least 40
gigabits per second (for dense wavelength division multiplexing equipment only),
and (b) any other physical additions, improvements or upgrades to the Project
that the Independent Engineer certifies to the Administrative Agent will add to
the overall value of the Project and, prior to the Conversion Date, will be
within the Project Budget, PROVIDED that in the case of (b), such addition,
improvement or upgrade (i) 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 Project, (ii) will not require the Company to enter into any
Additional Contract or otherwise amend any Project Document, except as permitted
by Sections 6.10 and 6.12, (iii) will not otherwise result in a Default or Event
of Default and (iv) could not reasonably be expected to have a Material Adverse
Effect.
"CAPACITY UPGRADES RESERVE ACCOUNT" shall mean the special account
designated by that name established by the Administrative Agent pursuant to
Article VIII.
"CAPACITY UPGRADES RESERVE REQUIRED BALANCE" shall mean an amount, as
certified by a Responsible Officer of the Company at the end of each fiscal
quarter, equal to the costs of Capacity Upgrades for the next succeeding twelve
calendar months from the date of such certification. Such certificate shall also
set forth the extent of such Capacity Upgrades in gigabits per second , provide
details of any other physical additions, improvements or upgrades to the Project
that the Company intends to effect over the same period and be otherwise
reasonably acceptable to the Administrative Agent.
"CAPITAL LEASE OBLIGATIONS" of any Person, shall mean the obligations
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.
"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.
"CASH EQUITY CONTRIBUTIONS" shall mean the cash equity contributions
required to be made by the Sponsor and/or the Shareholder to or on behalf of the
Company in an aggregate amount of not less than $193,000,000.
"CASUALTY PROCEEDS" shall mean all payments and proceeds of each
insurance policy maintained by the Company or any Subsidiary thereof (or with
respect to which the Company or one of its Subsidiaries is the named insured, a
co-insured or a loss payee) and all compensation, awards, damages or other
payments or relief in respect of any taking of, or in respect of casualty
16
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 8.16(a).
"CERTIFICATE OF COMMERCIAL ACCEPTANCE" shall have the meaning ascribed
thereto in the Construction Contract.
"CERTIFICATE OF COMMERCIAL ACCEPTANCE (FINAL PHASE)" shall mean the
Certificate of Commercial Acceptance issued in connection with commercial
acceptance of the Final Phase pursuant to the terms of the Construction
Contract.
"CERTIFICATE OF COMMERCIAL ACCEPTANCE (PHASE 1)" shall mean the
Certificate of Commercial Acceptance issued in connection with commercial
acceptance of Phase 1 pursuant to the terms of the Construction Contract.
"CERTIFICATE OF COMMERCIAL ACCEPTANCE (PHASE 2)" shall mean the
Certificate of Commercial Acceptance issued in connection with commercial
acceptance of Phase 2 pursuant to the terms of the Construction Contract.
"CERTIFICATE OF PROVISIONAL ACCEPTANCE" shall have the meaning ascribed
thereto in the Construction Contract.
"CERTIFICATE OF PROVISIONAL ACCEPTANCE (FINAL PHASE)" shall mean the
Certificate of Provisional Acceptance issued in connection with the Provisional
Acceptance Date (Final Phase) pursuant to the terms of the Construction
Contract.
"CERTIFICATE OF PROVISIONAL ACCEPTANCE (PHASE 1)" shall mean the
Certificate of Provisional Acceptance issued in connection with the Provisional
Acceptance Date (Phase 1) pursuant to the terms of the Construction Contract.
"CERTIFICATE OF PROVISIONAL ACCEPTANCE (PHASE 2)" shall mean the
Certificate of Provisional Acceptance issued in connection with the Provisional
Acceptance Date (Phase 2) pursuant to the terms of the Construction Contract.
"CERTIFICATE OF RESOLUTIONS AND INCUMBENCY" shall mean, with respect to
any Person, a certificate of a Responsible Officer and, in the case of (b)
below, the Secretary or an Assistant Secretary of such Person, certifying (a)
that the resolutions of the Board of Directors (or similar governing body) of
such Person (copies of which shall be attached to such certificate) that
authorize the execution, delivery and performance by such Person of each
Transaction Document to which it is or is to become a party and authorize such
Person to enter into the transactions contemplated hereby and thereby are in
full force and effect and have not been amended, modified or supplemented since
the date of their adoption, and (b) the incumbency of the Person or Persons
authorized to execute and deliver such documents on its behalf, together with
exemplary signatures thereof.
17
"CHANGE IN CONTROL" shall mean and shall be deemed to have occurred if
the Sponsor shall cease to directly or indirectly own at least 51% of the issued
and outstanding voting stock of the Company.
"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,
Construction Loans or Term Loans.
"CLOSING DATE" shall mean the date of this Agreement.
"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 "Security" as such
term is defined in any Security Agreement, (c) the Pledged Stock and (d) all
other property, if any, in which a Lien is, or is purported to be, granted to
secure the Obligations (or any portion thereof).
"COLLATERAL ACCOUNT SECURITY AGREEMENT" shall mean the security
agreement, dated as of the Closing Date made by FLAG Telecom Holdings in favor
of WestLB, as amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"COMMITMENTS" shall mean the Construction Loan Commitments.
"COMPANY" shall have the meaning ascribed thereto in the preamble
hereof.
"COMPANY SECURITY AGREEMENTS" shall mean the collective reference to
the Company Security Agreement (Bermuda), the Company Security Agreement (Hong
Kong), the Company Security Agreement (Japan), the Company Security Agreement
(Korea), the Company Security Agreement (U.K.), the Company Security Agreement
(U.S.), the Deed of Mortgage of Shares (Hong Kong) and once entered into, the
Company Security Agreement (Taiwan).
"COMPANY SECURITY AGREEMENT (BERMUDA)" shall mean the Security
Agreement, dated as of the Closing Date, substantially in the form of EXHIBIT
F-1, made by the Company and/or any of its Subsidiaries in Bermuda in favor of
the Administrative Agent, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"COMPANY SECURITY AGREEMENTS (HONG KONG)" shall mean the Security
Agreement, dated
18
as of the Closing Date, substantially in the form of EXHIBIT F-2(I), made by the
Company and/or substantially in the form of EXHIBIT F-2(II) made by any of its
Subsidiaries or License Affiliates in Hong Kong in favor of the Administrative
Agent, for the benefit of the Secured Parties, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"COMPANY SECURITY AGREEMENT (JAPAN)" shall mean the Security Agreement,
dated as of the Closing Date, substantially in the form of EXHIBIT F-3, made by
the Company and/or any of its Subsidiaries or License Affiliates in Japan in
favor of the Administrative Agent, for the benefit of the Secured Parties, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"COMPANY SECURITY AGREEMENTS (KOREA)" shall mean the Security
Agreement, dated as of the Closing Date, substantially in the forms of EXHIBIT
F-4 (or such other Security Agreements in customary and appropriate form for the
relevant type of Collateral located in Korea or governed by Korean law in form
and substance reasonably acceptable to the Administrative Agent) made by the
Company and/or any of its Subsidiaries in Korea in favor of the Administrative
Agent, for the benefit of the Secured Parties, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"COMPANY SECURITY AGREEMENTS (TAIWAN)" shall mean the Security
Agreements in customary and appropriate form for the relevant type of Collateral
located in Taiwan or governed by Taiwan law in form and substance reasonably
acceptable to the Administrative Agent, made by the Company and/or any of its
Subsidiaries in Taiwan in favor of the Administrative Agent, for the benefit of
the Secured Parties, as amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
"COMPANY SECURITY AGREEMENT (U.K.)" shall mean the Security Agreement,
dated as of the Closing Date, substantially in the form of EXHIBIT F-5, made by
the Company and any of its Subsidiaries in the United Kingdom in favor of the
Administrative Agent, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"COMPANY SECURITY AGREEMENT (U.S.)" shall mean the Security Agreement,
dated as of the Closing Date, substantially in the form of EXHIBIT F-6, made by
the Company and any of its Subsidiaries in the U.S. in favor of the
Administrative Agent, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"CONFIDENTIAL MATERIALS" shall have the meaning ascribed thereto in
Section 10.16.
"CONSENTS" shall be the collective reference to the Guarantor Consent,
the Contractor Consent and each other consent to assignment, in the form of
EXHIBIT H as the case may be, to be executed and delivered by each party (other
than the Company) to any Additional Contract which
19
are required to be obtained and delivered to the Administrative Agent in
accordance with Section 6.12 .
"CONSOLIDATED ADJUSTED EBITDA" shall mean, for any period, an amount
determined for the Company and its Subsidiaries on a consolidated basis equal to
(i) the sum, without duplication, of the amounts for such period of (a)
Consolidated Net Income, (b) Consolidated Interest Expense, (c) provisions for
taxes based on income, (d) total depreciation expense, (e) total amortization
expense, (f) the increase or decrease in each of the short term and long term
deferred revenue balances with respect to the previous period and (g) other
non-cash items reducing Consolidated Net Income (excluding any such non-cash
item to the extent that it represents an accrual or reserve for potential cash
items in any future period or amortization of a prepaid cash item that was paid
in a prior period), MINUS (ii) other non-cash items increasing Consolidated Net
Income for such period (excluding any such non-cash item to the extent it
represents the reversal of an accrual or reserve for potential cash item in any
prior period), only the components of which shall be calculated on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED CASH INTEREST EXPENSE" shall mean, for any period,
Consolidated Interest Expense for such period, excluding any amounts not payable
in Cash.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the amount
of interest expense, both expensed and capitalized, of the Company 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.
"CONSOLIDATED NET INCOME" shall mean, for any period, (i) the net
income (or loss) of the Company and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP, MINUS (ii) (a) the income (or loss) of any Person (other than a Subsidiary
of the Company) in which any other Person (other than the Company or any of its
Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to the Company or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of the Company or is
merged into or consolidated with the Company or any of its Subsidiaries or that
Person's assets are acquired by the Company or any of its Subsidiaries, (c) the
income of any Subsidiary of the Company to the extent that the declaration or
payment of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to that Subsidiary, (d) any after-tax gains or losses
attributable to asset sales or returned surplus assets of any pension plan, and
(e) (to the extent not included in clauses (a) through (d) above) any net
extraordinary gains or net extraordinary losses.
"CONSTRUCTION ACCOUNT" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
20
"CONSTRUCTION CONTRACT" shall mean the FLAG West Asia Cable System
construction contract, dated as of December 29, 2000, between the Company and
the Contractor (including all schedules and appendices 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 hereof.
"CONSTRUCTION CONTRACT GUARANTY" shall mean the Guaranty, dated as of
December 29, 2000, made by Alcatel in favor of the Company in accordance with
Article 48.4 of the Construction Contract, 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 hereof.
"CONSTRUCTION FUNDING FACILITIES" shall mean, collectively, and without
duplication, the following:
(a) all funds on deposit in the Debt Proceeds Account;
(b) the Cash Equity Contributions;
(c) all amounts available to be funded under this Agreement;
(d) all Level 3 Proceeds and/or Advance Pre-Sales Equity;
(e) all other funds which are available for the payment of
Project Costs from a source and on terms acceptable in all respects to
the Administrative Agent; and
(f) to the extent not included in (a) through (d) above, all
other amounts on deposit in the Construction Account or the Pre-Sale
Proceeds Account (excluding the OpEx Equity).
"CONSTRUCTION LOAN COMMITMENT" shall mean, as to any Construction Loan
Lender, the obligation of such Lender to make Construction Loans to the Company
in an aggregate amount not to exceed, at any one time outstanding, the amount
set forth opposite such Construction Loan Lender's name on SCHEDULE 1.1(ii)
under the heading "Construction Loan Commitment" or, in the case of any
Construction Loan Lender that is an assignee, the amount of the assigning
Construction Loan Lender's Construction Loan Commitment assigned to such
assignee pursuant to Section 10.4, in each case as such amount may be adjusted
or reduced from time to time as provided herein; PROVIDED, HOWEVER, no Lender's
Construction Loan Commitment as of the Closing Date shall be greater than the
amount set forth opposite such Construction Loan Lender's name on SCHEDULE
1.1(ii) under the heading "Net Construction Loan Commitment at the Closing Date
After Application of the Pre-sale Proceeds".
"CONSTRUCTION LOAN COMMITMENT PERIOD" shall mean the period from and
including the Closing Date to and including the Construction Loan Commitment
Termination Date.
21
"CONSTRUCTION LOAN COMMITMENT TERMINATION DATE" shall mean the earliest
of (a) the date on which the aggregate Construction Loan Commitments reach zero,
(b) the Conversion Date and (c) the date on which the Commitments shall
terminate under the terms of the Financing Documents.
"CONSTRUCTION LOAN LENDERS" shall mean, at any time of determination,
Lenders having outstanding Construction Loans or unused Construction Loan
Commitments.
"CONSTRUCTION LOAN NOTES" shall have the meaning ascribed thereto in
Section 2.7(e)(i).
"CONSTRUCTION LOANS" shall have the meaning ascribed thereto in Section
2.1(a).
"CONSTRUCTION PROGRESS REPORT" shall mean a report, substantially in
the form of the monthly Project report delivered in accordance with Section
5.1(II), to be submitted by the Company to the Administrative Agent and the
Independent Engineer no later than fifteen (15) Business Days prior to the
applicable Borrowing Date in relation to Construction Loans providing (a) an
assessment by the Company of the overall construction progress and cost of the
Project since the date of the last such report and since the Closing Date
(including, with respect to the initial Borrowing Date, evidence of payment in
full of the Cash Equity Contributions and the Advance Pre-Sales Equity),
together with an assessment of how such progress and cost compare to the Plan of
Work, the Project Timetable and the Project Budget (including, without
limitation, the Additional Borrowing Amount), (b) a detailed description of any
and all material problems (including, but not limited to, actual and anticipated
cost overruns or delays, if any) encountered or anticipated in connection with
the Project since the date of the last such report, together with an assessment
of any impact of any such problems on the Plan of Work, the Project Timetable
and the Project Budget, (c) a detailed description of the proposed solutions to
the problems referred to in clause (b) above, (d) a statement as to the
anticipated delivery dates of major equipment or supplies for the Project,
together with an assessment of how such delivery dates will impact the Project
Timetable and (e) an analysis of such other matters relating to the Project as
the Administrative Agent or the Independent Engineer shall request.
"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
22
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 G, which may be contained in the Borrowing Notice or otherwise, and
which shall be executed by a Responsible Officer of the Company.
"CONTRACT VARIATION" 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" shall mean Alcatel Submarine Networks, S.A., a direct or
indirect Subsidiary of Alcatel, or its permitted successor or assign.
"CONTRACTOR CONSENT" shall mean the consent to and notice of
assignment, in the form of EXHIBIT H, made by the Contractor in favor of the
Administrative Agent, as the case may be.
"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.
"CONTRACTUAL RIGHTS" means all representations, covenants, guarantees,
indemnities and other contractual provisions in favor of the Administrative
Agent (other than any such made or granted solely for its own benefit) made or
granted in or pursuant to any of the Financing Documents.
"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 25% or more of the securities having
ordinary voting power for the election of directors of a Person. "CONTROLLED"
shall have the meaning correlative thereto.
"CONVERSION DATE" shall mean the date on which the conditions precedent
set forth in Section 4.3 have been satisfied and the Construction Loans are
converted into Term Loans in accordance with the terms hereof.
"CRITICAL TIMETABLE EVENT" shall mean each event set forth in the
Project Timetable under the heading "Critical Timetable Event".
"CUMULATIVE CAPACITY SALES REVENUE" shall mean, for any period, the
aggregate cash amount of Capacity Commitments or cash received from xxxx-ups
with respect to Customer Upgrades received from May 1, 2001 up to and including
the end of such period in respect of the
23
sale, lease and/or other disposition of Capacity (less, from and after January
31, 2003, any amount received which is subject to a rebate or return
obligation); PROVIDED, HOWEVER, in no event shall Cumulative Capacity Sales
Revenue include any proceeds with respect to the Level 3 Fiber Pair Agreement.
"CURRENT ACCOUNT" shall mean the special account designated by that
name established by the Administrative Agent pursuant to Article VIII.
"CUSTOMER UPGRADE" shall mean any and all physical additions,
improvements or upgrades associated with the sale of fiber pairs or half fiber
pairs, or capacity thereon, that are contemplated by a Capacity Sales Agreement
and that are funded through amounts from the Customer Upgrade Amounts.
"CUSTOMER UPGRADE ACCOUNT" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Section 8.31.
"CUSTOMER UPGRADE AMOUNTS" shall mean funds made available to the
Company by Capacity Purchasers specifically for Customer Upgrades.
"DEBT PROCEEDS ACCOUNT" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"DEBT RESERVE ACCOUNT" shall mean the special account designated by
that name established by the Administrative Agent 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 sum of (a) 50% of all
scheduled payments of interest (based on the then current interest rates on the
Loans after giving effect to any principal prepayments made on or prior to such
date) taking into account any portion of the interest rate that has been fixed
as a result of Interest Hedging Transactions and (b) 50% of all scheduled
payments of principal (before giving effect to any principal prepayments) on the
Term Loans, in each case for the next succeeding twelve months, PROVIDED that
the amount set forth in clause (b) shall in no event exceed the aggregate
principal amount of the Term Loans outstanding as of such date.
"DEED OF MORTGAGE OF SHARES (HONG KONG)" shall mean the Deed of
Mortgage of Shares, dated as of the Closing Date, substantially in the form of
EXHIBIT F-2(III), made by FLAG Telecom Group Services in favor of the
Administrative Agent, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"DEED TRUSTEE" shall mean the Deed Trustee as defined in Section 11.1
or any successor Deed Trustee appointed pursuant to the provisions of Article
XI.
"DEFAULT" shall mean any event or condition which constitutes an Event
of Default or
24
which upon notice, lapse of time or both would, unless cured or waived,
become an Event of Default.
"DESIGN DOCUMENTS" shall mean any document submitted by the Company and
requested by the Independent Engineer as justification that the design and/or
installation of the Project (or any portion thereof) meets the requirements and
specifications set forth in the Construction Contract, the NACS Construction
Contract, the Backhaul Agreements or the Cable Station Construction Agreements.
"DESIGNATED EVENT" shall mean, as of any date of determination, the
failure of the Company and its Subsidiaries to be in compliance with Section
6.28, 6.29 or 6.30 as of such date, as set forth in the certificate delivered by
the Company to the Administrative Agent in accordance with Section 5.3(b), or
the failure of the Company to deliver such certificate when required.
"DISTRIBUTION ACCOUNT" shall have the meaning ascribed thereto in
Section 6.24.
"DOCUMENTATION AGENT" shall have the meaning ascribed thereto in the
preamble hereto.
"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 Company 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 5.20(a).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"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.
25
"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, (b) the loss, destruction, damage or constructive loss of a
material portion of the Project (by way of condemnation, expropriation or
otherwise), (c) the cessation or material impairment of the operation of the
Project 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 Company 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, all cash revenue received by the Company during such
period and available after the application of clauses "first" through "sixth" of
Section 8.11(b) in accordance with the terms of Article VIII.
"EXCESS REVENUE ACCOUNT" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"EXCLUDED TAXES" shall mean, with respect to the Administrative Agent,
the Lead 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 or the Administrative Agent, 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).
"EXPENSE CERTIFICATE" shall mean a certificate of the Company
substantially in the form of EXHIBIT J.
"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.
"FIBER PAIR AGREEMENTS" shall mean each of the FLAG Fiber Pair
Agreement and the Xxxxx 0 Xxxxx Xxxx Xxxxxxxxx.
00
"XXXXX" xxxxx, (x) 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.
"FINAL PHASE" shall have the meaning ascribed thereto in the
Construction Contract.
"FINAL MATURITY DATE" shall mean the earlier to occur of (i) the date
that is 78 months after the Closing Date or (ii) the date that the
Construction/Term Loans become due and payable in full hereunder, whether by
acceleration or otherwise.
"FINANCING DOCUMENTS" shall be the collective reference to this
Agreement, the Notes, the Security Documents, the Interest Hedging Agreements
with Lenders or any agency, branch or Affiliate thereof, the Subsidiary
Guarantee Agreements, the Letter Agreement and the Consents.
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Security Document, that such Lien is
the first and prior Lien to which such Collateral is subject.
"FLAG ASIA HOLDINGS" shall mean FLAG Asia Holdings Limited, a company
organized and existing under the laws of Bermuda.
"FLAG FIBER PAIR AGREEMENT" shall mean the fiber pair agreement, dated
December 29, 2000, by and between FLAG and Level 3 providing for the exclusive
ownership by FLAG in Separately Owned Property and an undivided percentage
ownership interest in Shared Property on the NACS.
"FLAG GUARANTEE" shall mean the guarantee given by FLAG Telecom
Holdings, dated December 29, 2000, of the obligations of the Company under the
Development Agreement, the Transfer Agreement, the Fiber Pair Agreements and the
Cable Station Agreements.
"FLAG TELECOM HOLDINGS" shall mean FLAG Telecom Holdings Limited, a
company organized and existing under the laws of Bermuda.
"FNAL SYSTEM" shall have the meaning ascribed thereto in the recitals
hereof.
"FWACS" shall have the meaning ascribed thereto in the recitals hereof.
"FX CONDITIONS" shall mean, with respect to the use of euros or yen
instead of Dollars, (i) that such euros or yen, as applicable, shall be the
dollar equivalent priced off the "U.S. Dollar price book" of the Company and
(ii) that any amounts payable at any time other than the day of a sale must be
fully hedged in accordance with customary commercial hedging practices, provided
that the Company may net any applicable euro or yen current liabilities or cash
outflows as part of such hedging practices.
27
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect from time to time.
"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, permits, licenses, authorities and approvals for
the Company's cable to cross other telecommunications cables, pipelines, and the
like, to rest or be buried in any inland waters, territorial waters, continental
shelf, contiguous zones, Exclusive Economic Zones (as defined in the 1982
Convention on the Law of the Sea) and permissions to cross any beach or land and
all other 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.
"GUARANTOR" shall mean Alcatel and its permitted successors and
assigns.
"GUARANTY" 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 Guaranty shall not include
endorsements for collection or deposit in the ordinary course of business.
"GUARANTOR CONSENT" shall mean the consent to and notice of assignment,
dated as of the Closing Date, made by Alcatel in favor of the Administrative
Agent, in the form of EXHIBIT H, as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"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",
28
"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.
"HONG KONG BACKHAUL ELEMENT" shall mean (i) the point of presence in
Hong Kong as identified by the Independent Engineer on the Closing Date, (ii)
prior to Conversion, any additional points of presence in Hong Kong, provided
that they are within the Project Budget and in each case are otherwise permitted
hereby and (iii) all terrestrial fiber and other equipment connecting the Cable
Building in Hong Kong with the points of presence in Hong Kong.
"HONG KONG LICENCE ACHIEVAL DATE" means the date upon which one of the
conditions specified in Section 5.30(b) is met.
"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; PROVIDED, HOWEVER, that refunds or credits which the
Company may from time to time be obligated to pay or make under any Capacity
Sales Agreement shall not be considered "Indebtedness", (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 the lesser of (x) the fair market value of
such property and (y) the amount of such Indebtedness of others, (e) all
Guaranties 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 (other than trade-related letters of credit or letters
of guaranty entered into in the ordinary course of business), (h) all net
obligations of such Person under any Hedging Agreement (including all net
Interest Hedging Obligations) and (i) all obligations, contingent or otherwise,
of such Person in respect of bankers' acceptances; PROVIDED, HOWEVER, that for
the avoidance of doubt, the Company's payment obligations under the Project
Documents shall not constitute "Indebtedness".
"INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.
"INDEMNITEE" shall have the meaning ascribed thereto in Section
10.3(c).
"INDEPENDENT ENGINEER" shall mean BT Ignite or such other engineer or
engineering firm as may be appointed by the Administrative Agent in accordance
with Section 10.15.
29
"INITIAL PRINCIPAL PAYMENT DATE" shall mean March 31, 2003.
"INSURANCE ADVISOR" shall mean Xxxxx Group, LLP., or any successor
thereof.
"INSURANCE PROCEEDS ACCOUNT" shall mean the special account designated
by that name established by the Administrative Agent 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 COVERAGE RATIO" means the ratio, as of the last day of any
fiscal quarter of the Company (and its Subsidiaries, on a consolidated basis)
following the fiscal quarter in which the Conversion Date occurs, of (i)
Consolidat ed Adjusted EBITDA for the four-fiscal quarter period then ended, to
(ii) Consolidated Cash Interest Expense for such four-fiscal quarter period, in
each case as set forth in the most recent certificate delivered by the Company
to the Administrative Agent pursuant to Section 5.3(b) in respect of such fiscal
period.
"INTEREST HEDGING AGREEMENT" means any Hedging Agreement evidencing an
Interest Hedging Transaction.
"INTEREST HEDGING COUNTERPARTY" shall mean (a) WestLB, any other Lender
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 Xxxxx'x, at the time of such financial institution's entry
into an Interest Hedging Transaction with the Company.
"INTEREST HEDGING OBLIGATIONS" shall mean all indebtedness, liabilities
and obligations of the Company under any agreement or agreements entered into by
the Company 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 Company with an Interest Hedging
Counterparty to hedge the Company's interest rate exposure with respect to the
Loans.
"INTEREST PAYMENT DATE" shall mean (a) with respect to any ABR Loan,
the last day of each month commencing with the Closing Date (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, the day
that occurs three months after the first day of such Interest Period (or, if
such day is not a Business Day, the next succeeding Business Day (unless such
next succeeding Business Day would fall in the next calendar month in which case
such payment date shall fall on the next preceding Business Day)).
30
"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 or two weeks or
one, two, three or six months thereafter, as the Company may elect in accordance
with the terms hereof; 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, (e) any Interest Period for a Construction Loan that would otherwise
extend beyond the Construction Loan Commitment Termination Date, shall end on
the Construction Loan Commitment Termination Date and (f) any Interest Period
that would otherwise extend beyond the Final Maturity Date, shall end on the
Final Maturity Date. For purposes hereof, the date of a Borrowing initially
shall be the Borrowing Date and thereafter shall be the effective date of the
most recent conversion or continuation of such Borrowing.
"INTRA-GROUP AGREEMENTS" shall mean any agreement between the Company
(and/or any of its Subsidiaries) and an Affiliate thereof relating to Project
Activities (including the provision of construction management, sales and
marketing (subject to Section 6.13), administrative, corporate and professional
services and facilities management services).
"JAPANESE BACKHAUL ELEMENT" shall mean (i) the point of presence in
Tokyo as identified by the Independent Engineer on the Closing Date, (ii) prior
to Conversion, any additional points of presence in Tokyo and all terrestrial
fiber and other equipment connecting the Project to the Sponsor's system to be
constructed and named "FLAG Pacific," provided that they are within the Project
Budget and in each case are otherwise permitted hereby and (iii) all terrestrial
fiber and other equipment connecting the Cable Building in Tokyo with the points
of presence in Tokyo.
"JAPANESE LICENCE ACHIEVAL DATE" means the date upon which one of the
conditions specified in Section 5.29(b) is met.
"KOREAN BACKHAUL ELEMENT" shall mean (i) the point of presence in
Seoul, if any, as confirmed by the Independent Engineer on the Closing Date,
(ii) prior to Conversion, any additional points of presence in Seoul, provided
that they are within the Project Budget and in each case are otherwise permitted
hereby and (iii) all terrestrial fiber and other equipment connecting the Cable
Building in Seoul with the points of presence in Seoul.
"LEAD ARRANGER" shall have the meaning ascribed thereto in the preamble
hereof.
31
"LEASEHOLD PROPERTY" means any leasehold interest of the Company or any
Subsidiary thereof as lessee under any lease of real property that constitutes a
Material Real Estate Asset, other than any such leasehold interest designated
from time to time by the Administrative Agent in its sole discretion as not
being required to be included in the Collateral.
"LENDERS" shall be the collective reference to the lenders listed on
the signature pages hereto, together with their respective successors and
permitted assigns hereunder.
"LETTER AGREEMENT" shall mean the Letter Agreement, dated August 15,
2001 by and between the Company, Xxxxx 0, Xxxxx 0 Communications, Inc. and
WestLB.
"LEVEL 3" shall have the meaning ascribed thereto in the recitals
hereof.
"LEVEL 3 FIBER PAIR AGREEMENT" shall mean the fiber pair agreement,
dated December 29, 2000, by and between FLAG and Level 3 providing for the
exclusive ownership by Level 3 in certain Separately Owned Property and an
undivided percentage ownership interest in Shared Property on the FWACS prior to
the Transfer Date and on the FNAL System thereafter.
"LEVEL 3 GUARANTEE" shall mean the guarantee given by Xxxxx 0
Xxxxxxxxxxxxxx, Xxx., dated December 29, 2000, of the obligations of Level 3
under the Development Agreement, the Transfer Agreement, the Fiber Pair
Agreements and the Cable Station Agreements.
"LEVEL 3 PROCEEDS" shall mean the proceeds due from Level 3 to the
Company, the Contractor and the NACS Contractor and in respect of any other
costs specified in the Development Agreement and/or the Level 3 Fiber Pair
Agreement.
"LEVEL 3 PROCEEDS AMOUNT" shall mean $302,000,000, as such amount may
be adjusted pursuant to Section 11.14 of the Development Agreement.
"LEVEL 3 PROCEEDS ACCOUNT" shall mean the special account designated by
that name established by the Company at the offices of Bermuda Commercial Bank
pursuant to Section 11.2 of the Development Agreement to receive and transfer
the Level 3 Proceeds.
"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 (2) 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
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 of the
respective rates notified to the Administrative Agent by each of the Reference
Lenders as the rate at which such
32
Reference Lender is offered Dollar deposits at approximately 11:00 a.m., London
time, two (2) 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.
"LICENSE AFFILIATE" shall mean any Affiliate of the Company that holds
a license that is necessary for the lawful operation of the Project until a
license on substantially similar terms applicable to the Project is issued, or
transferred to, a Subsidiary of the Company.
"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 mean, collectively, (a) at any time prior to the
Conversion Date, the Construction Loans and (b) at any time on or after the
Conversion Date, the Term Loans.
"MAJORITY LENDERS" shall mean, at any time of determination, three or
more Lenders having 51% or more of the aggregate of (a) at any time prior to the
Conversion Date, (i) the Construction Loan Commitments then in effect and (ii)
the Construction Loans then outstanding and (b) at any time on or after the
Conversion Date, the Term Loans then outstanding (determined in each of items
(a) and (b) by excluding the Commitments and/or the then outstanding Loans held
by (x) the Company or any Affiliate of the Company, whether through a
participation or otherwise and (y) any Lender that has agreed, directly or
indirectly, to vote or otherwise act at the direction or subject to the approval
or disapproval of any Person identified in the foregoing item (x)).
"MARKET CONSULTANT" shall mean Ovum Ltd. or such other market
consultant as may be appointed by the Administrative Agent in accordance with
Section 10.15.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a)
the business, operations, condition (financial or otherwise), or property or
prospects of the Company and its Subsidiaries, taken as a whole, or the Project,
(b) the ownership, use or operation of the Project, (c) the ability of the
Company or any of its Subsidiaries or any of the License Affiliates to perform
its obligations under any Financing Document, (d) the value, validity,
perfection and enforceability of the Liens granted to the Administrative Agent
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
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
33
applications of new technology) will not, in and of itself, provide a basis for
a claim that an event described above has occurred.
"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 Company in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Company would be
required to pay if such Hedging Agreement were terminated at such time.
"MATERIAL REAL ESTATE ASSET" means (i) any fee-owned Real Estate Asset
(a) having a fair market value in excess of $1,000,000, as of the date of
acquisition thereof or (b) on which any of the landing stations are located, or
(ii) any Leasehold Property (a) on which any of the landing stations are located
or (b) (1) with respect to which the aggregate annual payments under the lease
are in excess of $500,000, (2) that has personal property located thereon with
an aggregate value in excess of $1,000,000 or (3) that relates to a site the
loss of which would have a material adverse effect on the operation of the
business of the Company and of its Subsidiaries, taken as a whole; PROVIDED,
HOWEVER, that Rights-of-Way and Real Estate Assets with respect to which the
Company (or its Subsidiaries) has a subsea permit (each a "SUBSEA REAL ESTATE
ASSET") shall be excluded from the term "Material Real Estate Asset," in the
event that the granting of a mortgage lien on such Subsea Real Estate Asset
would not be recognized or effective under applicable law.
"MINIMUM CREDIT RATING" shall mean, with respect to any Person, a
rating of such Person's senior long-term debt of at least BBB- by S&P and Baa3
by Moody's or if only one of S&P and Moody's rates such Person, the applicable
rating specified in this definition.
"MOODY'S" shall mean Xxxxx'x Investors Service, Inc.
"NACS" shall have the meaning ascribed thereto in the recitals hereof.
"NACS CONSTRUCTION CONTRACT" shall mean the construction contract,
dated as of March 27, 2000, between Level 3 and the NACS Contractor (including
all schedules and appendices thereto).
"NACS CONTRACTOR" shall mean the Contractor and Fujitsu Limited
together, or their permitted successors or assigns.
"NET CASH PROCEEDS" shall mean as follows:
(a) with respect to the sale, transfer, lease or other
dispositions of any asset (excluding dispositions of Capacity
constituting the sale of fiber pairs of the Project made prior to the
Conversion Date), an amount certified in reasonable detail by a
Responsible Officer of the Company 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
34
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 Company in connection
with such sale, transfer, lease or other disposition and (D)
provision for taxes payable by the Company and which are directly
attributable to such sale, transfer, lease or other disposition (as
estimated by the Company in good faith within one month of such sale
to be payable by the Company, 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 Company
or Sponsor, as applicable 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 Company or
Sponsor, as applicable, 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 Company
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 Company in
connection with such incurrence of Indebtedness.
"NOTES" shall be the collective reference to (i) prior to the
Conversion Date, the Construction Loan Notes and (ii) on and after the
Conversion Date, the Term Loan Notes.
"OBLIGATIONS" shall mean (a) all the unpaid principal amount of, and
accrued interest on, the Loans, and all other obligations of the Company or any
of its Subsidiaries or any License Affiliates 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, administration
(whether judicial or not) or like proceeding relating to the Company 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 or refunding of any indebtedness
referred to in clause (a) above.
35
"OBLIGORS" shall mean the Company and the Company's Subsidiaries.
"OFFICERS' CERTIFICATE" shall mean, with respect to any Person, a
certificate of a Responsible Officer of such Person, which states:
(a) the representations and warranties of such Person contained
in Article III and/or in each other Financing Document to which it is a
party are true and accurate on and as of the date such certificate is
required to be delivered 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);
(b) the representations and warranties of such Person contained
in each Project Document to which it is a party are true and accurate
in all material respects on and as of the date such certificate is
required to be delivered 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);
(c) in the case of the Officers' Certificate to be provided by
the Company, no event or condition has occurred and is continuing, or
would result from the consummation of any transaction contemplated by
the Transaction Documents to which it is a party, which constitutes a
default by the Company under any of such Transaction Documents or a
Default or Event of Default;
(d) each Transaction Document to which it is a party remains in
full force and effect; and
(e) in the case of the Officers' Certificate to be provided by
the Company, there has been no material adverse change in the financial
condition or results of operations of such Person since the date of the
financial statements referred to in Section 4.1(v), except as
specifically contemplated by the Project Budget.
"OPERATING BUDGET" shall have the meaning ascribed thereto in Section
5.24.
"OPERATING EXPENSE TRANSFER DATE" shall have the meaning ascribed
thereto in Section 8.11(a).
"OPERATING EXPENSES" shall mean, with respect to any period, all
operation, administration and maintenance expenses with respect to such period
which are payable by the Company or any Subsidiary of the Company in such
period, 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 Company (excluding
36
income taxes) in respect of operating the Project; PROVIDED, HOWEVER, in no
event shall "Operating Expenses" include (a) any payments made by the Company to
purchasers or lessees of Capacity relating to such purchase or lease or (b) any
payments made by the Company not related to the transfer of Capacity or other
Project Activities.
"OPERATING PAYMENTS" means all payments made to the Company or any
Subsidiary with respect to, or that are allocated to restoration services or to
maintenance and repair of the Project.
"OPERATING PROJECTIONS" shall have the meaning ascribed thereto in
Section 4.1(s).
"OPERATING RESERVE ACCOUNT" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"OPERATING RESERVE MAXIMUM BALANCE" shall mean $25,000,000.
"OPERATING RESERVE MINIMUM BALANCE" shall mean $15,000,000.
"OPERATING YEAR" shall mean initially, the period from the Conversion
Date to the following December 31st and, thereafter, each ensuing calendar year.
"OPEX EQUITY" shall mean the cash equity contributions to be made by
the Sponsor and/or the Shareholder to fund projected fixed Operating Expenses of
the Company prior to the Conversion Date in an aggregate amount of not less than
$15,000,000.
"ORGANIZATIONAL DOCUMENTS" means (a) with respect to any corporation,
its certificate or articles of incor poration, as amended, and its by-laws, or
its memorandum and articles of association, as amended, (b) with respect to any
limited partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (c) with respect to any general partnership,
its partnership agreement, as amended, (d) with respect to any limited liability
company, its articles of organization, as amended, and its operating agreement,
as amended, and (e) with respect to any US or Bermuda entity, a good standing
certificate and a certificate of compliance, respectively. In the event any term
or condition of this Agreement or any other Financing Document requires any
Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such "Organizational Document" shall
only be to a document of a type customarily certified by such governmen tal
official.
"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.
"PARTICIPANT" shall have the meaning ascribed thereto in Section
10.4(e).
"PARTICIPATION AGREEMENT" shall mean the participation agreement, dated
as of the Closing Date, by and between FLAG Telecom Holdings and WestLB, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
37
"PARTICIPATION VOTING AGREEMENT" shall mean the voting agreement, dated
as of the Closing Date, by and between FLAG Telecom Holdings and WestLB, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"PERFORMANCE BOND(S)" shall mean, individually or together, as
applicable, each of (i) the letter of credit, dated December 29, 2000 issued by
HSBC CCF, in favor of the Company in accordance with Article 48 of the
Construction Contract (the "COMPANY PERFORMANCE BOND") and (ii) the letter of
credit, dated October 4, 2000 issued by Credit Commerce De France, in
favor of Level 3 (and to be assigned to the Company on the Transfer Date) in
accordance with Article 14 of the NACS Construction Contract (the "LEVEL 3
PERFORMANCE BOND"), as each may be amended, supplemented or otherwise modified
prior to the Closing Date and as the same may be further amended, supplemented
or otherwise modified, or replaced from time to time in accordance with the
terms hereof.
"PERMITTED INVESTMENTS" shall mean the following:
(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 certificates of deposit, banker's acceptances
and time deposits maturing within one hundred eighty (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;
(c) fully collateralized repurchase agreements with a term of not
more than thirty (30) days for securities described in clause (a) above
and entered into with a financial institution satisfying the criteria
described in clause (b) above; and
(d) 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 Moody's.
"PERMITTED LIENS" shall mean the following:
(a) Liens imposed by law for Taxes that are either not yet due or
that are subject to a Contest;
38
(b) materialmen's, mechanics', workers', repairmen's, employees',
carriers', warehousemen's and other like Liens relating to the
construction of the Project or otherwise arising in the ordinary course
of business for amounts that either are not more than sixty (60) days
past due or are subject to a Contest;
(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 Capacity Purchasers with respect to
portions of the Project, to the extent such rights may be construed as
a Lien;
(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
definition of the term "Contest";
(f) Liens created by or arising out of the Security Documents;
(g) pledges and deposits made in the ordinary course of business
in compliance with workers' compensation, unemployment insurance and
other social security laws or regulations;
(h) 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 the ordinary conduct of
business of the Company or of the Project;
(i) Liens arising in connection with Permitted Sale Leasebacks;
(j) Liens arising in connection with Indebtedness permitted under
Section 6.1(h) constituted by cash collateral at no time greater in
amount than the total aggregate amount of letters of credit issued and
outstanding pursuant to such subsection;
(k) Liens arising in connection with Capital Lease Obligations
permitted under Section 6.15; and
(l) any Lien over or conditional assignment of the Company's
rights, including without limitation the right to receive payment,
under a Capacity Sales Agreement, to the extent that such Lien or
conditional assignment is in favor of a financial institution providing
a Capacity Sales Agreement Letter of Credit.
"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
39
recommended by an internationally recognized tax consultant of the Company, (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 with
Section 2.9.
"PERMITTED SOURCES" shall mean, so long as no Event of Default shall
have occurred and be continuing, the following sources (so long as the funds
from any such source has not been provided for or otherwise allocated to another
purpose in accordance with the terms hereof):
(a) funds received by the Company after the Closing Date in
respect of the issuance of Capital Stock of the Company 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 actually made available to the Company for its sole
benefit after the application of clauses "first" through "sixth" of
Section 8.11(b) and which are being maintained on deposit in the
Permitted Sources Account or the Distribution 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
(c) funds (other than Customer Upgrade Amounts) made available by
parties other than the Company and its Subsidiaries without any
recourse to the Company, its assets (other than to Capacity to the
extent conveyed in accordance with the terms hereof), 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 documenta tion
satisfactory to the Administrative Agent).
"PERMITTED SOURCES ACCOUNT" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"PERSON" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PHASE" shall mean any of Phase 1 or Phase 2.
"PHASE 1" shall have the meaning ascribed thereto in the Construction
Contract.
"PHASE 2" shall have the meaning ascribed thereto in the Construction
Contract.
"PLAN OF WORK" shall mean, collectively, (A) (i) the plan of work in
relation to the Subsea Element, substantially in the form of Annex 3 to the
Construction Contract, (ii) in respect of the Backhaul Elements, the plans of
work contained in the Backhaul Agreements calling for the delivery, construction
and/or installation of any portion of the Backhaul Elements and (iii) in
40
respect of the Cable Buildings located in Korea and Taiwan, the plans of work
contained in the relevant Cable Station Construction Agreements calling for the
delivery, construction and/or installation of any portion of such Cable
Buildings and (B) similar plans of work with respect to the NACS.
"PLEDGED STOCK" shall mean all Capital Stock of the Company and of each
of the Company's Subsidiaries, together with all other related "Pledged
Collateral" as defined in the Shareholder Pledge Agreement and all other related
"Collateral" or "Security" as defined in the Company Security Agreements.
"PRE-SALE PROCEEDS" shall mean all cash proceeds received by the
Company prior to the Conversion Date in respect of the purchase of Capacity
under any Capacity Sales Agreement.
"PRE-SALE PROCEEDS ACCOUNT" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"PRESENT VALUE COVERAGE RATIO" shall have the meaning ascribed thereto
on SCHEDULE 1.1(i).
"PRICING SCHEDULE" shall mean the price lists for the sale, lease or
other disposition of Capacity by the Company, including any discounts for
aggregated purchases, as the same may be amended by the Company from time to
time.
"PRIME RATE" shall mean the rate of interest per annum established by
WestLB 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 subsequent date set forth on SCHEDULE 1.1(iii), or if any such day is
not a Business Day, the preceding Business Day.
"PRINCIPAL PROJECT DOCUMENTS" shall be the collective reference to the
following agreements (to the extent such agreements are in effect and have not
been terminated or replaced in accordance with the terms hereof): the
Construction Contract, the Construction Contract Guaranty, the NACS Construction
Contract, each Capacity Sales Agreement requiring aggregate payments (excluding
Operating Payments) in excess of $2,500,000, the Development Agreement, the
Fiber Pair Agreements, the Level 3 Guarantee, the Transfer Agreement, the Cable
Station Agreements, the Backhaul Agreements, the Subsea Maintenance Agreement
and the Performance Bonds, and any replacement of any of the foregoing in
accordance with the terms hereof.
"PROJECT" shall have the meaning ascribed thereto in the recitals
hereof, as the same is modified from time to time in accordance with the terms
hereof.
41
"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 marketing, sale, lease or other disposition of Capacity and (c) all
activities related or incidental to any of the foregoing; PROVIDED, HOWEVER,
that Project Activities shall not include any such activity to the extent it is
related to or incidental to a Customer Upgrade.
"PROJECT BUDGET" shall mean the budget, substantially in the form of
SCHEDULE 1.1(iv), as it may be amended in accordance with Section 6.9.
"PROJECT COSTS" shall mean all costs and expenses or deposits (without
duplication) incurred or to be incurred by the Company or any of its
Subsidiaries in connection with any Project Activity, including:
(a) the Total Contract Price and any other amounts payable
pursuant to the Development Agreement, the Construction Contract or the NACS
Construction Contract;
(b) all costs and expenses payable in connection with the
performance by it of its covenants in the Construction Contract, the Development
Agreement or the Fiber Pair Agreements;
(c) all costs and expenses payable in connection with the
Backhaul Agreements or the Cable Station Agreements;
(d) the cost of insurance;
(e) program management expenses, selling, general and
administrative expenses, in each case to the extent set forth in the Project
Budget and legal, accounting, engineering and financing fees and expenses;
(f) interest expense;
(g) other fees and expenses payable to the Administrative Agent,
the Lenders, their respective advisors and advisors to the Company in connection
with the Financing Documents;
(h) all Taxes;
(i) the cost of establishing an inventory of spare parts for the
Project;
(j) recording and filing fees;
(k) repayment of Advance Pre-Sales Equity (subject to the terms
hereof); and
(l) all other costs related to any Project Activities.
42
"PROJECT DOCUMENTS" shall mean each of the Principal Project Documents,
the Consents and each Additional Contract.
"PROJECT REVENUES" shall, for any applicable period, mean all revenues
received by the Company and its Subsidiaries including, without limitation, all
revenues and proceeds received from (a) sales, leases or other dispositions of
Capacity (whether in respect of direct or indirect sales of Capacity), (b) the
sale, lease, transfer or other disposition of any assets, (c) any Person in
connection with the performance under any Project Document, (d) joint marketing
agreements or joint venture or similar agreements and (e) any other source
(including Operating Payments, but not including Special Payments); PROVIDED,
HOWEVER, that Project Revenues shall not, in any event, include proceeds of the
Construction Funding Facilities or Customer Upgrade Amounts.
"PROJECT TIMETABLE" shall mean the project timetable, substantially in
the form of SCHEDULE 1.1(v), as it may be amended with the consent of the
Independent Engineer to the extent reasonably required to be consistent with the
Plan of Work, and as it may be otherwise amended, supplemented or modified from
time to time in accordance with the terms hereof.
"PROVISIONAL ACCEPTANCE DATE" shall mean any of Provisional Acceptance
Date (Phase 1), Provisional Acceptance Date (Phase 2) or Provisional Acceptance
Date (Final Phase).
"PROVISIONAL ACCEPTANCE DATE (FINAL PHASE)" shall mean the RFPA for the
Final Phase.
"PROVISIONAL ACCEPTANCE DATE (PHASE 1)" shall mean the RFPA for Phase
1.
"PROVISIONAL ACCEPTANCE DATE (PHASE 2)" shall mean the RFPA for Phase
2.
"PUBLIC DEBT RATING" shall mean, with respect to any Person and at any
time of determination, the lowest rating that has been most recently announced
at such time by either S&P or Moody's, as the case may be, for any class of
long-term senior unsecured debt issued by such Person.
"QUALIFYING BANK" shall mean a commercial bank with an office for the
presentation of drafts and certificates under a letter of credit located in the
City of New York or London whose long term unsecured debt securities are rated
"A" or better by S&P and "A2" or better by Moody's (or whose credit is otherwise
acceptable to the Administrative Agent).
"QUALIFYING CAPACITY PURCHASERS" shall mean, at any time of
determination, (i) any Capacity Purchasers with at least a Minimum Credit Rating
at the time of entry into a Capacity Sales Agreement, PROVIDED that if such
purchaser shall only have a BBB- rating from S&P or a Baa3 rating by Moody's,
then such purchaser shall not be on "negative credit watch" of any credit rating
agency at the time of its entry into a Capacity Sales Agreement and (ii) other
Capacity Purchasers, to the extent their payment obligations under their
respective Capacity Sales Agreements are supported by a Capacity Sales Agreement
Letter of Credit issued or confirmed by a bank which constitutes a Qualifying
Bank at the time of such issuance or confirmation.
43
"QUALIFYING CAPACITY COMMITMENTS" shall mean the Dollar amount of
Capacity Commit ments under executed Capacity Sales Agreements entered into with
Qualifying Capacity Purchasers no later than the date which is three (3) years
after the Conversion Date; PROVIDED, HOWEVER, that "Qualifying Capacity
Commitments" shall exclude (i) any unexercised options to purchase capacity and
(ii) the Level 3 Proceeds and the Advance Pre-Sales Equity; PROVIDED, FURTHER,
that such Qualifying Capacity Commitments shall be due and payable within three
(3) years of the Conversion Date.
"QUALIFYING CAPACITY RECEIVABLES" shall mean the Dollar amount of
Qualifying Capacity Commitments, LESS any amount of cash paid to the Company to
satisfy Qualifying Capacity Commitments, LESS any amount of Qualifying Capacity
Commitments (i) deemed uncollectible by the Company or (ii) that are in excess
of 90 days past due (upon which the entire unpaid portion of the Qualifying
Capacity Commitment of the relevant Capacity Purchaser (to the extent not
supported by a Capacity Sales Agreement Letter of Credit) shall be deemed
uncollectible in accordance with (i) above).
"RFPA" shall have the meaning ascribed thereto in the Construction
Contract.
"REAL ESTATE ASSET" means any interest in real property (whether
leasehold, fee, Right-of-Way or otherwise) or any interest in on or over land of
a third party that at any time of determination may be owned by the Company or
any Subsidiary thereof or have been granted to the Company or any Subsidiary
thereof.
"REFERENCE LENDER" shall be the reference to WestLB.
"REGISTER" shall have the meaning ascribed thereto in Section 10.4(c).
"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.
"RELEASE" shall mean any release, burial, disposal, discharge,
emission, injection, spillage, leakage, seepage, leaching, dumping, pumping,
pouring, escaping, emptying or placement.
"REQUIRED APPLICABLE ACCEPTANCE DATE" shall mean (a) with respect to
Xxxxx 0, Xxxx 00, 0000, (x) with respect to Phase 2, October 31, 2002 and (c)
with respect to the Final Phase, November 31, 2002.
"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 Capacity Upgrades
Reserve Account, the Capacity Upgrades Reserve Required Balance.
"REQUIRED PREPAYMENT DATE" shall have the meaning ascribed thereto in
Section 2.9(j).
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and
44
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.
"RESERVE ACCOUNTS" shall mean the Debt Reserve Account, the Operating
Reserve Account and the Capacity Upgrade Reserve Account.
"RESIDUAL PROJECT COSTS" shall mean amounts requested by the Company
which are to be paid to the Contractor, NACS Contractor or any other
construction contractor after the Conversion Date pursuant to the Construction
Contract, the NACS Construction Contract, or such other construction contract,
respectively, which are certified by a Responsible Officer of the Company and
confirmed by the Independent Engineer to the Administrative Agent.
"RESPONSIBLE OFFICER" shall mean, with respect to any Person, the
Chairman, Chief Financial Officer, Chief Operating Officer, Treasurer, Deputy
Treasurer or Controller of such Person or any other authorized Person.
"RESTRICTED PAYMENT" shall mean (i) any dividend or distribution
(whether in cash, securities or other property) with respect to any shares of
any class of Capital Stock of the Company, (ii) 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 Company or any option,
warrant or other right to acquire any such shares of Capital Stock of the
Company and (iii) any payment by the Company to a Related Party of the Company
or the Sponsor under any Project Document to which such Related Party is also a
party.
"REVENUE ACCOUNT" shall mean the special account designated by that
name established by the Administrative Agent pursuant to Article VIII.
"RIGHTS-OF-WAY" shall mean all easements, rights-of-way and other
similar real property interests and all consents required or reasonably
necessary for access to the premises where the Project is located or any Project
Activity is to be performed, and to allow the Company's cable to cross other
telecommunications cables, pipelines, and the like, to rest or be buried in any
inland waters, territorial waters, continental shelf, contiguous zones,
Exclusive Economic Zones (as defined in the 1982 Convention on the Law of the
Sea) and permissions required to enable the Company's cable to cross any beach
or land and all other construction, installation, siting, environmental and
operating permits and licenses that are required for the performance of the
Project Activities.
"S&P" shall mean Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor thereto.
45
"SALES AND ISSUANCES PROCEEDS ACCOUNT" shall mean the special account
designated by that name established by the Administrative Agent pursuant to
Article VIII.
"SCHEDULE OF SOURCES AND USES " shall mean the Schedule of Sources and
Uses as set forth on SCHEDULE 1.1(vi), as amended from time to time.
"SECURED PARTIES" shall be the collective reference to the
Administrative Agent, the Deed 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 Company
Security Agreements and the Subsidiary Security Agreements.
"SECURITY DOCUMENTS" shall be the collective reference to the Security
Agreements, the Shareholder Pledge Agreement and any other document pursuant to
which a security interest is, or is purported to be, granted to secure the
Obligations.
"SEPARATELY OWNED PROPERTY" shall mean all property comprising the NACS
or FWACS portion of the FNAL System (as appropriate) which is separately owned
or leased by either of the Company or Xxxxx 0, as applicable, including, without
limitation, the property set forth on Part I of Schedule 2 to each Fiber Pair
Agreement.
"SHARED PROPERTY" shall mean all property comprising the NACS or FWACS
portion of the FNAL System (as appropriate), excluding Separately Owned
Property, including, without limitation, the property set forth on Part II of
Schedule 2 to each Fiber Pair Agreement.
"SHAREHOLDER" shall mean FLAG Asia Holdings.
"SHAREHOLDER PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated
as of the Closing Date, substantially in the form of EXHIBIT E, made by the
Shareholder and certain Affiliates of the Company in favor of the Administrative
Agent, for the benefit of the Secured Parties, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"SOFTWARE" shall have the meaning ascribed thereto in the Construction
Contract.
"SPECIAL PAYMENT ACCOUNT" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"SPECIAL PAYMENTS" shall mean the Company's share of (a) all payments
made by the Contractor under the Construction Contract and all other payments
made by the Contractor or Alcatel in respect of any breach or failure by the
Contractor to perform its obligations under the Construction Contract, whether
as a result of any proceeding, settlement or otherwise, (b) all payments made by
the NACS Contractor under the NACS Construction Contract and all other payments
made by the NACS Contractor in respect of any breach or failure by the NACS
46
Contractor to perform its obligations under the NACS Construction Contract,
whether as a result of any proceeding, settlement or otherwise, and (c) all
payments made under the Performance Bonds.
"SPECIFICATIONS" shall mean the specifications for the Project (or a
portion of it) set forth in the Construction Contract, those Backhaul Agreements
which call for the delivery, construction and/or installation of any portion of
the Backhaul Elements, and those Cable Station Agreements which call for the
delivery, construction and/or installation of any portion of the Cable
Buildings, as amended from time to time.
"SPECIFIED PARTICIPANT" shall be the collective reference to (i) the
Company, any of its Subsidiaries and at any time prior to the expiration of the
Warranty Period, Alcatel, (ii) at any time prior to the Hong Kong License
Achieval Date, FLAG Telecom Asia Limited and its direct parent, (iii) at any
time prior to the Japanese License Achieval Date, FLAG Telecom Japan Limited and
its direct parent and (iv) at any time prior to the later to occur of the Hong
Kong License Achieval Date and the Japanese License Achieval Date, FLAG Asia
Holdings Limited.
"SPONSOR" shall mean FLAG Telecom Holdings (or any successor thereto or
transferee thereof).
"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.
"STM-1" means a 155.520 Mbits per second both way digital line section
between two interfaces on the Project, together with such interfaces, in
accordance with the International Telecommunications Union Telecommunications
Standardization Sector (previously known as CCITT) recommendations and shall
mean the minimum unit in which Capacity is disposed of from time to time.
"SUBJECT COLLATERAL" shall mean all Collateral a security interest in
which can be perfected by the taking of action under the laws of Bermuda, Hong
Kong, Korea, Japan, Taiwan, England and Wales and the United States.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or its
Subsidiaries incurred under subsections 6.1(e) or (f).
47
"SUBSEA ELEMENT" shall mean NACS and FWACS.
"SUBSEA MAINTENANCE AGREEMENT" shall mean the Marine Maintenance
Service Agreement dated January 31, 2001 among the Company and Alcatel Submarine
Networks.
"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 GUARANTEE AGREEMENT" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of EXHIBIT D, made by each Subsidiary of
the Company in favor of the Administrative Agent for the benefit of the Secured
Parties.
"SUBSIDIARY SECURITY AGREEMENTS" shall be the collective reference to
all security agreements entered into by any Subsidiary of the Company pursuant
to Section 4.1(c) and Section 6.23(b), as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the terms hereof.
"SYNDICATION AGENT" as defined in the preamble hereto.
"TAIWAN BACKHAUL ELEMENT" shall mean (i) the point of presence in
Taipei, if any, as confirmed by the Independent Engineer on the Closing Date,
(ii) prior to Conversion, any additional points of presence in Taipei, provided
that they are within the Project Budget and in each case are otherwise permitted
hereby and (iii) all terrestrial fiber and other equipment connecting the Cable
Building in Taipei with the points of presence in Taipei.
"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.
"TERM LENDERS" shall mean, at any time of determination, Lenders having
outstanding Term Loans.
"TERM LOAN" shall have the meaning ascribed thereto in Section 2.1(b).
"TERM LOAN NOTES" shall have the meaning ascribed thereto in Section
2.7(e)(ii).
48
"TOTAL CONTRACT PRICE" shall mean the sum of (x) the amount ascribed to
the term "Contract Sum" in the Construction Contract and (y) the amount ascribed
to the term "Total Contract Price" in the NACS Construction Contract.
"TRANSACTION DOCUMENTS" shall be the collective reference to the
Financing Documents and the Project Documents.
"TRANSFER AGREEMENT" shall mean the agreement, in a form to be mutually
agreed between the FLAG and Level 3, whereby Level 3 will transfer to FLAG the
NACS (except as otherwise specified in the Development Agreement and in the
Level 3 Fiber Pair Agreement), including the assignment of the NACS Construction
Contract and, to the extent possible, the NACS permits.
"TRANSFER DATE" shall mean the date on which Level 3 transfers its
right, title and interest in the NACS to FLAG (except as specified in the
Development Agreement and the Level 3 Fiber Pair Agreement) in accordance with
the Transfer Agreement and the provisions of Section 2 of the Development
Agreement.
"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.
"UCC" or "UNIFORM COMMERCIAL CODE" shall mean the Uniform Commercial
Code or any comparable law as in effect in any applicable jurisdiction.
"U.S." shall mean the United States of America.
"U.S. BANKRUPTCY CODE" shall mean the Bankruptcy Reform Act of 1978, as
amended, as the same may be further amended, and any other Applicable Law with
respect to bankruptcy, insolvency or reorganization that is a successor thereto.
"VAT ACCOUNT" shall mean the special account designated by that name
established by the Administrative Agent pursuant to Article VIII.
"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 have the meaning ascribed thereto in the
Construction Contract or the NACS Construction Contract, as applicable.
"WESTLB" shall have the meaning ascribed thereto in the preamble
hereof.
"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 or the NACS Construction
Contract, including, but not limited to, all "Work" and
49
"Services" as such terms are defined in the Construction Contract and the NACS
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 hereof, Loans may be classified and referred to by Class
(E.G., a "Construction Loan") or by Type (e.g., a "Eurodollar Loan") or by Class
and Type (e.g., a "Eurodollar Construction Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Construction Loan Borrowing") or
by Type (e.g., a "Eurodollar Borrowing") or by Class and Type (e.g., a
"Eurodollar Construction Loan Borrowing").
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 unless specified otherwise 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.
ARTICLE II
COMMITMENTS AND LOANS
SECTION 2.1. COMMITMENTS; CONVERSION DATE.
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(a) COMMITMENTS. Subject to the terms and conditions set forth
herein, each Construction Loan Lender severally agrees to make construction
loans (collectively, the "CONSTRUCTION LOANS") to the Company from time to time
during the Construction Loan Commitment Period in an aggregate principal amount
at any one time outstanding not to exceed such Construction Loan Lender's
Construction Loan Commitment at such time. Subject to the terms and conditions
set forth herein, the Company may borrow, prepay but not reborrow any
Construction Loans.
(b) CONVERSION DATE. Subject to the terms and conditions set
forth herein, on the Conversion Date all Construction Loans then outstanding
shall convert into outstanding Term Loans (the "TERM LOANS"), without any action
required to be taken by the Company, the Administrative Agent, any Lender or any
other Person. On and after the Conversion Date, all references herein to a
Construction Loan shall be deemed to be a reference to a Term Loan, and each
Lender holding outstanding Construction Loans on the Conversion Date shall
thereafter be deemed to be holding Term Loans of the same principal amount. Each
Term Loan shall be subject to the terms and conditions hereof and of each other
Financing Document applicable to Term Loans.
SECTION 2.2. LOANS AND BORROWINGS
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 Applicable Percentage of such 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 Company 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
Company to repay such Loan in accordance with the terms hereof and shall not
increase the cost of such Loan to the Company.
(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, continued or converted, 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 Construction Loan Commitments,.
Borrowings of more than one Type and Class may be outstanding at the same time;
PROVIDED further that there shall not at any time be more than a total of ten
(10) Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision hereof, the Company shall
not be entitled to
51
request, or to elect to convert or continue, any Borrowing if the Interest
Period requested with respect thereto would end after the Final Maturity Date.
SECTION 2.3. REQUESTS FOR BORROWINGS
To request a Borrowing, the Company shall: (i) deliver a draft
Borrowing Notice to the Administrative Agent and the Independent Engineer not
later than 11:00 a.m., New York City time, fifteen (15) Business Days prior to a
proposed Borrowing Date and the Independent Engineer shall review and confirm to
the Administrative Agent and the Company, or, if there is a material defect
therein, revise and send back to the Company, such draft Borrowing Notice not
later than 11:00 a.m. New York City time, nine (9) Business Days prior to the
proposed Borrowing Date (and any failure to respond within such time shall be
deemed to be a confirmation of such draft Borrowing Notice), such review to be
based on the information provided under the Construction Progress Report
delivered to the Independent Engineer in connection with such proposed
Borrowing; and (ii) deliver a final Borrowing Notice to the Administrative Agent
(a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m., New York
City time, five (5) Business Days before the proposed Borrowing Date or (b) in
the case of an ABR Borrowing, not later than 11:00 a.m., New York City time, two
(2) Business Days before the proposed Borrowing Date. Each Borrowing Notice
delivered pursuant to paragraph (ii) hereof shall be irrevocable, and each such
Borrowing Notice shall specify the following information and shall comply with
Section 2.2:
(a) the aggregate amount of each requested Borrowing;
(b) the Borrowing Date of each requested Borrowing;
(c) whether each such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(d) in the case of any Eurodollar Borrowing, the initial Interest
Period to be applicable thereto.
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 Company shall be
deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a final Borrowing Notice 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
Each Lender shall make its Applicable Percentage of the Loans to be
made hereunder on the proposed Borrowing 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
52
designated by it for such purpose by notice to the Lenders. The Administrative
Agent will make such Loans available to the Company by promptly crediting the
amounts so received, in like funds, to the Debt Proceeds 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 Applicable
Percentage of such Borrowing, the Administrative Agent may assume that such
Lender has made such Applicable Percentage available on such date in accordance
with paragraph (a) of this Section 2.4 and may, in reliance upon such
assumption, make available to the Company 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 Company
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 Company 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 Company, the interest rate applicable to
ABR 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
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 Notice or as otherwise provided in Section 2.3. Thereafter, the
Company 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 Company 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 2.5, the Company
shall notify the Administrative Agent of such election by delivering a
Continuation/Conversion Notice to the Administrative Agent by the time that a
Borrowing Notice would be required under Section 2.3 if the Company were
requesting a Borrowing of the Type resulting from such election with the
Borrowing Date being the effective date of such election. Each such notice shall
be irrevocable.
(c) Each Continuation/Conversion Notice shall specify the
following information and shall comply 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
53
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 Continua tion/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.
If any such Continuation/Conversion Notice requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Company 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 2.5, if the Company 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 Company 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 Administra tive Agent so
elects) has occurred and is continuing and the Administrative Agent so notifies
the Company, then, so long as such Event of Default is continuing, if the
Company wishes to continue any 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 or two weeks or one, two, three or six months.
SECTION 2.6. TERMINATION AND REDUCTION OF COMMITMENTS
Unless previously terminated, the Construction Loan Commitments
shall terminate on the Construction Loan Commitment Termination Date.
(b) (i) The Company shall notify the Administrative Agent of
any election to terminate or reduce the Commitments under paragraph (c) of this
Section 2.6 at least three (3) Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof.
54
(ii) The Company shall pay Project Costs in the order set
forth in Section 8.9. The Company shall notify the Administrative Agent
of any election to pay Project Costs with any funds other than those
available under the Loans, from the Cash Equity Contribu tions, from
the Level 3 Proceeds or from the Advance Pre-Sales Equity. The
Construction Loan Commitments shall automatically be reduced by an
amount equal to the amount of Project Costs being paid with such other
funds.
(iii) Promptly following receipt of any notice under clause
(i) or (ii), the Administrative Agent shall advise each applicable
Lender of the contents thereof and the resulting Construction Loan
Commitment amount (which amounts shall be determined as of such date of
reduction in the manner specified in Section 2.2(a)). Each notice
delivered by the Company pursuant to this Section 2.6 shall be
irrevocable. Any termination or reduction of any Commitment shall be
permanent. Each reduction of any Commitment shall be made ratably among
the applicable Lenders in accordance with their respective Commitments.
(c) The Company may, prior to the Conversion Date, terminate or
reduce the Construction Loan Commitments, PROVIDED that the Administrative Agent
shall be satisfied that the Project Budget shall remain fully funded after
giving effect to such termination or reduction; PROVIDED that each reduction of
the Commitments shall be in an amount that is either (x) an integral multiple of
$1,000,000 or (y) equal to the entire unused balance of the applicable
Commitments.
SECTION 2.7. REPAYMENT OF LOANS; EVIDENCE OF DEBT
The Company 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 as set forth in SCHEDULE 1.1(iii) under the
heading "AMORTIZATION". To the extent not previously paid, the Term Loan shall
be due and payable on the Final 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.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company 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.
(c) The Administrative Agent shall maintain the Register pursuant
to Section 10.4(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
55
amount of any principal or interest due and payable or to become due and payable
from the Company 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.
(d) 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(b) or (c) or any error therein shall not in any manner
affect the obligation of the Company to repay the Loans in accordance with the
terms hereof.
(e) The Company agrees that, upon the request by the
Administrative Agent on behalf of any Lender, the Company will execute and
deliver to such Lender, as applicable:
(i) prior to the Conversion Date, a promissory note of the
Company payable to such Lender and its registered assigns evidencing
the Construction Loans of such Lender and substantially in the form of
EXHIBIT L-1 with appropriate insertions as to date and principal amount
(each, a "CONSTRUCTION LOAN NOTE"); and
(ii) on and after the Conversion Date, and in exchange for
the return to the Company of the corresponding Construction Loan
Note(s) (if any) marked "canceled" by each Lender who holds such note,
a promissory note of the Company payable to such Lender and its
registered assigns evidencing the Term Loans of such Lender and
substantially in the form of EXHIBIT L-2, as applicable, with
appropriate insertions as to date and principal amount (each, a "TERM
LOAN NOTE").
Thereafter, the Loans evidenced by any such Note and interest thereon shall at
all times (including after assignment pursuant to Section 10.4) be represented
by one or more Notes payable to 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 10.4 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 Company 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
The Company shall have the right on any date occurring on or after
the Conversion Date to prepay any Borrowing (whether a Construction Loan or a
Term Loan) in whole or in part,
56
without premium or penalty (out of funds not constituting Project Revenues or
that are available to the Company after the application of clauses "first"
through "sixth" of Section 8.11(b)) subject to prior notice in accordance with
paragraph (b) of this Section and subject to the provisions of Section 2.14.
(b) The Company shall notify the Administrative Agent in writing
of any optional prepayment hereunder, not later than 11:00 a.m., New York City
time, five (5) 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 Construction Loans, Term 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 $1,000,000 and integral multiples of $1,000,000 in excess thereof or,
if less, the Applicable Percentage 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 Construction
Loans or the Term Loans may not be reborrowed.
(c) Optional prepayments shall be applied to the remaining
installments of the Loans in direct order of maturity.
SECTION 2.9. MANDATORY PREPAYMENTS
The Company shall prepay the Construction Loans with funds available
in the Pre-Sale Proceeds Account in accordance with the terms of Section 8.8.
(b) The Company shall prepay the Loans on each Principal Payment
Date in accordance with the terms of Section 8.11(b).
(c) After the Conversion Date, the Company shall prepay the Loans
immediately (except as provided in Sections 2.9(a) and 2.9(b)) 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
Company, the Shareholder or any Subsidiary of the Company (excluding
any equity funding received from any Affiliates of the Company);
(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
Company or by any Subsidiary of the Company in accordance with Section
6.1(h);
57
(iii) by an amount equal to 100% of the Net Cash Proceeds of
any sale, transfer or other disposition of any asset of the Company or
any Subsidiary thereof; PROVIDED, HOWEVER, that the Company shall not
be required to make any such prepayment if such Net Cash Proceeds (A)
are, within three months of receipt, used to replace such assets
disposed of with similar assets of at least substantially the same
value, utility and useful life, (B) do not exceed $1,000,000 in any one
fiscal year of the Company or (C) result from sales, transfers or
dispositions of Capacity; PROVIDED FURTHER, that, after the Conversion
Date, the Company shall be required to make such prepayment only to the
extent that such Net Cash Proceeds result from sales, transfers or
dispositions of Capacity constituting the sale of fiber pairs of the
FNAL System (including, without limitation, the Net Cash Proceeds of
fiber pair sales made before the Conversion Date) described in clause
(a) of Section 6.4.
(d) If an Event of Loss shall occur, unless the affected portion
of the Project is being repaired, replaced or restored in accordance with
Section 5.20, the Company 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 such
insurance, condemnation and/or expropriation proceeds received (net of (i) any
costs of collection (including attorneys fees) and (ii) any portion of such
proceeds due to Level 3 under the Development Agreement or the Level 3 Fiber
Pair Agreement).
(e) The Company 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 (net of any costs of
collection (including attorneys' fees)) shall be used to prepay the Loans in
accordance with Section 8.17; PROVIDED, HOWEVER, that if and to the extent that
such payments are being utilized to repair, replace or restore any affected
portion of the Project in accordance with Section 5.20 (b), the Company shall
not be required to prepay the Loans with the proceeds of such Special Payments
being so utilized.
(g) The Company shall prepay the Construction/Term Loans
semi-annually in accordance with the terms of Section 8.8(a) "third" and
quarterly in accordance with the terms of Section 8.11(b)"sixth".
(h) The Company shall from time to time prepay Construction Loans
to the extent necessary so that the aggregate principal amount of outstanding
Construction Loans shall not at any time exceed an amount equal to the aggregate
amount of Construction Loan Commitment s then in effect.
(i) Mandatory prepayments shall be accompanied by accrued
interest.
(j) Mandatory prepayments of the Loans pursuant to paragraphs
(a), (b), (c), (d), (e), (f) and (g) above shall be applied pro rata to the
mandatory prepayment of the Construction Loans or
58
Term Loans, as the case may be. Mandatory prepayments of the Construction Loans
or Term Loans, as the case may be, shall be applied, 50% in direct order of
maturity and 50% in inverse order of maturity of such scheduled payments;
PROVIDED, HOWEVER, that in the event an Event of Default shall have occurred and
be continuing such mandatory prepayments shall be applied 100% in inverse order
of maturity of such scheduled payments.
(k) Upon being required to make a mandatory prepayment pursuant
to this Section 2.9, the Company shall have the right first, to prepay the ABR
Loans and any and all Eurodollar Loans having Interest Period(s) ending on the
date such prepayment is required.
SECTION 2.10. FEES
During the Construction Loan Commitment Period, the Company agrees
to pay to the Administrative Agent, for the account of the Construction Loan
Lenders, a commitment fee, calculated in accordance with Part II of SCHEDULE
1.1(vii).
(b) Accrued commitment fees shall be payable in arrears on the
last day of each of March, June, September and December (and, with respect to
the commitment fees payable in respect of any Commitment being terminated or
reduced, on the date of such termination or reduction) commencing on the Closing
Date (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
three hundred sixty (360) days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). Upon payment
by the Company of the foregoing fees, the Administrative Agent shall promptly
distribute to each Lender its Applicable Percentage thereof.
(c) The Company 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 Final Maturity Date, and on the Final Maturity Date, all as set forth in the
Fee Letter.
(d) All fees and commissions payable under clauses (a) through
(c) above, shall be paid on the dates due, in immediately available funds, to
the Administrative Agent, for distribution to the relevant Lenders.
SECTION 2.11. INTEREST
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.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any
59
fee or other amount payable by the Company 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 Final
Maturity Date.
(e) All interest hereunder shall be computed on the basis of a
year of three hundred sixty (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 three
hundred sixty five (365) days (or three hundred sixty six (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
Notwithstanding any other provision hereof 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;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company 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
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Borrowing Notice requests a Eurodollar Borrowing, such Borrowing shall be made
as an ABR Borrowing.
(b) Notwithstanding any other provision hereof to the contrary,
if on or after the date hereof any Change in Law 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 Company 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, (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 and (iii) the commitment of such Lender
hereunder to make ABR Loans shall continue (unless cancelled by the Company in
accordance with Section 2.17).
SECTION 2.13. INCREASED COSTS
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 Company 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 hereof 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 Company 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,
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such Lender shall promptly notify the Company (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 Company (with a copy to the
Administrative Agent). The Company shall pay such Lender the amount shown as due
within ten (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 Company 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 Company 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 a Eurodollar Interest Payment Date applicable thereto, (b)
the conversion of any Eurodollar Loan other than on a Eurodollar Interest
Payment Date 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 definitive Borrowing
Notice, Continuation/ Conversion Notice or prepayment notice delivered pursuant
hereto, then, in any such event, the Company 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 shall be
determined in good faith and reasonably documented (with descriptive
explanations) by such Lender and 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 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 Company (with a copy to the Administrative Agent) and shall be conclusive
absent manifest error. The Company shall pay such Lender the amount shown as due
within ten (10) days after receipt thereof.
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SECTION 2.15. TAXES
Any and all payments by or on account of any obligation of the
Company hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; PROVIDED that if the Company 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 Company shall make such deductions and (iii) the Company shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with Applicable Law.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law.
(c) The Company shall indemnify the Administrative Agent and each
Lender, within ten (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
Company 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 Company to a Governmental Authority, the
Company 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 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 Company (with a copy to the
Administrative Agent), at the time or times reasonably requested by the Company,
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; ETC.
The Company shall make each payment required to be made by it
hereunder (whether
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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 1211 Avenue of the Americas, Xxx Xxxx, Xxx Xxxx, 00000 except that payments
pursuant to Sections 2.13, 2.14 and 2.15 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 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 Company pursuant to and in
accordance with the express terms hereof 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 Company, Sponsor or any
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Company 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
Company rights of set-off and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Company in the amount of
such participation.
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(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Company
will not make such payment, the Administrative Agent may assume that the Company
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 Company 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
If any Lender notifies the Company of its intent to apply Section
2.12(b) and/or requests compensation under Section 2.13, or if the Company 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 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 Company 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 Company 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 Company 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 (i) the Company may require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 10.4), 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 Company
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
65
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 Company (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 Company, 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, the
Company may prepay such Lender's Loans in full out of funds made available to
the Company for its sole benefit after the application of clauses "first"
through "sixth" of Section 8.11(b) or out of funds available in the Distribution
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 Company to require such assignment and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Administrative Agent and the
Lenders on each Borrowing Date (other than the representation and warranty set
forth at Section 3.31 which shall be repeated on each Interest Payment Date)
that:
SECTION 3.1. FINANCIAL CONDITION
Except for material Contractual Obligations disclosed on SCHEDULE
3.19(b), the Company, as of the Closing Date, has no other material liabilities.
SECTION 3.2. NO MATERIAL ADVERSE EFFECT
Since April 10, 2000, 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
Each of the Company and its Subsidiaries is a company duly organized
and validly existing under the laws of the jurisdiction of its organization
(and, to the extent applicable in such jurisdiction, is in good standing under
the laws of such jurisdiction) 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.
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(b) No filing, recording, publishing or other act is necessary or
appropriate in connection with the establishment of the Company 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 Company has engaged in no
business other than the Project Activities and activities incidental thereto,
and the Company has no material obligations or liabilities (contingent or
otherwise) other than those directly related to the conduct of such business and
relating to agreements that are disclosed on SCHEDULE 3.19(b).
SECTION 3.4. COMPLIANCE WITH LAW
Each of the Company 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
Each of the Company 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 each of 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 provided for in the Security Documents to which it is a
party.
(b) Each of the Company and its Subsidiaries has taken all
necessary corporate and legal action to authorize the borrowings by the Company
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 hereof and of 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 Company is a party has been duly executed and delivered by the Company
and constitutes, and each of the other Financing Documents to which the Company
or any of its Subsidiaries is to become a party will, upon execution and
delivery thereof by the Company or such Subsidiary, as the case may be, and the
other parties thereto (if any), constitute, a legal, valid and binding
obligation of the Company or such Subsidiary enforceable against the Company or
such Subsidiary, as applicable, in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
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.
67
(d) Each of the Project Documents to which the Company is a party
has been duly executed and delivered by the Company and the Company 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 to
which the Company is a party constitutes a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its terms and
the Company 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. CAPITAL AND CORPORATE STRUCTURE
Immediately prior to giving effect to the transactions contemplated
hereby, the capital structure of the Company is as set forth in SCHEDULE 3.6.
Except as set forth in SCHEDULE 3.6, as of the Closing Date, the Company does
not have any Subsidiaries and does not hold beneficially or otherwise any
ownership interest in any other Person.
SECTION 3.7. GOVERNMENTAL ACTIONS, PERMITS, ETC.
Except as otherwise set forth in SCHEDULE 3.7(b), no Governmental
Actions, Rights-of-Way or other consents or approvals are required by the
Company, its Subsidiaries or, to the best knowledge of the Company, the
Contractor or Level 3 under Applicable Law, in connection with (i) the
participation by the Company and its Subsidiaries in the transactions
contemplated by this Agreement and the other Transaction Documents, (ii) the
ownership and operation of the Project by the Company and its Subsidiaries, the
performance by the Company and its Subsidiaries of any Project Activity or the
use by the Company and its Subsidiaries of the Project (including, without
limitation, the sale, lease or other disposition of Capacity) in accordance with
the applicable provisions of the Transaction Documents and in compliance with
all Applicable Laws, (iii) the validity and enforceability of the Transaction
Documents against the Company and its Subsidiaries and Level 3 and (iv) the
execution, delivery and performance of the Financing Documents by the Company
and its Subsidiaries, the borrowings by the Company hereunder and the grant by
the Company and its Subsidiaries of the Liens created pursuant to the Security
Documents to which the Company or any of its Subsidiaries is a party and the
validity and enforceability thereof and the perfection of and the exercise by
the Administrative Agent of its rights and remedies thereunder, except in each
case for those Governmental Actions, Rights-of-Way and consents or approvals (x)
which have been duly obtained or made, are in full force and effect and are
final, (y) 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 or (z)
where the failure 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 Company's knowledge as of the Closing
Date, SCHEDULE 3.7(b)
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sets forth all the material Governmental Actions and material Rights-of-Way that
are required to be obtained pursuant to any Project Document or Applicable Law
in connection with the construction and operation of the Project (including,
without limitation, the sale, lease or other disposition of Capacity).
SECTION 3.8. NO LEGAL BAR
The execution, delivery and performance by the Company and its
Subsidiaries hereof and the other Financing Documents to which it is a party,
the borrowings by the Company hereunder and the use of the proceeds thereof, the
granting of the Liens by the Company and its Subsidiaries under the Security
Documents and the consummation of 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 Contractual Obligation of the
Company or any Subsidiary thereof (which violation or default could reasonably
be expected to have a Material Adverse Effect) and (iii) will not result in, or
require, the creation or imposition of any Lien on any of the properties or
revenues of the Company, its Subsidiaries or the Project, except for Permitted
Liens.
(b) The execution, delivery and performance by the Company 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 Company 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 Company, 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 Company's knowledge,
threatened against or affecting the Company or any of its Subsidiaries or
against or affecting any of the properties, rights, revenues or assets of the
Company 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 (as of any date after the Closing Date on which representations and
warranties are made or deemed made under this Agreement and as to which the
Company and its Subsidiaries 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
No Default or Event of Default has occurred and is continuing. No
Event of Loss has occurred and 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
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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 Company to the Administrative Agent pursuant to Section 5.20(a)).
(b) Neither the Company nor any of its Subsidiaries is and, to
the best of the Company'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 so long as such default could not reasonably be expected to have
a Material Adverse Effect) 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 Company 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
As of the Closing Date (and on each date on which representations
and warranties are made or deemed made under this Agreement), the Company and
its Subsidiaries have good and valid title to (or, if applicable, valid
leasehold interests or rights of use in) the Collateral (owned or leased as of
such date), 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 Company are free and clear of
all Liens other than Permitted Liens. As of the Closing Date, SCHEDULE 3.11(a)
contains a true, accurate and complete list of (i) all Real Estate Assets and
(ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Estate Asset of the Company or any Subsidiary thereof,
regardless of whether the Company or such Subsidiary is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such lease,
sublease or assignment. As of the Closing Date except as specified in SCHEDULE
3.11(a), each agreement listed in clause (ii) of the immediately preceding
sentence is in full force and effect and the Company does not have knowledge of
any default that has occurred and is continuing thereunder that could reasonably
be expected to have a Material Adverse Effect, and each such agreement
constitutes the legal, valid and binding obligation of the Company or such
Subsidiary, as applicable, enforceable against such party 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 equitable principles
(whether considered in a proceeding in equity or law) and an implied covenant of
good faith and fair dealing.
(b) All filings, recordings and other actions, including, without
limitation, the recordings, filings and other actions shown on SCHEDULE 3.11(b),
that are necessary or, in the judgment of the Administrative Agent, desirable in
order to establish, protect and perfect the Administrative Agent's lien on and
perfected security interest in, and the First Priority status thereof, all
right, title, estate and interest of the Company and its Subsidiaries, any
License Affiliate, or the Shareholder, as the case may be, in and to the
Collateral, have been duly made or
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taken (or shall be taken immediately following the Closing Date) and all fees,
taxes and other charges relating to such filings and recordings and other
actions have been paid in full (or shall be paid in full immediately following
the Closing Date). The provisions of the Security Documents (together with such
recordings, filings and actions) are effective to create, in favor of the
Administrative Agent 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 Administrative Agent has a legal, valid and
enforceable First Priority lien on and prior perfected security interest in all
of the Subject Collateral, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
rights of creditors generally, general equitable principles (whether considered
in a proceeding in equity or law) and an implied covenant of good faith and fair
dealing.
(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 Company to repurchase, redeem or otherwise acquire any
Capital Stock (or any security convertible into or exchangeable for the same) of
the Company from the Sponsor.
SECTION 3.12. TAXES
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 Company 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.
(b) Each of the Company 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.
SECTION 3.13. FEDERAL REGULATIONS
Neither the Company 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 T, 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
Neither the Company, its Subsidiaries, nor any trade or business
(whether or not
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incorporated that together with the Company or any of its Subsidiaries would be
deemed a single employer with the meaning of Section 4001(b)(1) of ERISA) has
established, sponsored or contributed to, or is otherwise obligated to
establish, sponsor or contribute to any employee pension benefit plan (as
defined in 3(2) of ERISA) that is subject to Title IV of ERISA.
(b) Except as set forth on Schedule 3.14(b), neither the Company,
any Subsidiary of the Company, nor any Affiliate of the Company is a Party in
Interest (as defined in Section 3(3) of ERISA) or a Disqualified Person (as
defined in Section 4975 of the Code) with respect to any employee benefit plan
(as defined in Section 3(3) of ERISA) that is subject to Title I of ERISA
SECTION 3.15. INVESTMENT COMPANY ACT
Neither the Company nor any of its 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 Administrative Agent or any Lender directly or indirectly by the Company 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 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
Company's expectation as to the matter covered thereby as of their date.
SECTION 3.17. REGISTERED OFFICE; PRINCIPAL PLACE OF BUSINESS, ETC.
As of the Closing Date, (i) the registered office of the Company is
located at Xxxxx Xxxxx, 00 Xxxxx Xxxxxx, Xxxxxxxx XX 00, Xxxxxxx and (ii) the
principal place of business and chief executive office of the Company is located
at Xxxxx 000 Xxx-xx-xxxxx Xxxx, Xxxxxxxx XX 00, Xxxxxxx, and neither such
registered office nor such principal place of business shall be changed without
the prior written consent of the Administrative Agent.
SECTION 3.18. INTELLECTUAL PROPERTY
Each of the Company and its Subsidiaries owns, or has valid licenses
to use, all Intellectual Property necessary for the conduct of its business as
currently conducted that are material to the condition (financial or other),
business, or operations of the Company, its Subsidiaries or the Project.
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(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 Company or any of its
Subsidiaries, or, to the Company's best knowledge, challenging or questioning
the validity or enforceability 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 Company or such Subsidiary,
as applicable, reasonably be expected to have a Material Adverse Effect) and
neither the Company nor any of its Subsidiaries knows of any valid basis for any
such claim.
(c) As of the Closing Date, and to the Company's best knowledge,
as of any date after the Closing Date on which representations and warranties
are made or deemed made under this Agreement, the use or contemplated use of any
such Intellectual Property by the Company and any of its Subsidiaries does not
infringe the rights of any Person except for any infringement which
individually, or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
SECTION 3.19. SUFFICIENCY OF PROJECT DOCUMENTS
Other than such services, materials, property interests, license
agreements and other rights that the Company 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 Company 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 Company 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 Company and its Subsidiaries or, to the
best of the Company's knowledge, any other Person (in either case, as of the
Closing Date) which could have a Material Adverse Effect on the validity,
perfection, priority, or enforceability of the Collateral owned as of the
Closing Date or on the availability of the remedies of 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 Company, its Subsidiaries, any property owned or operated by
the Company 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
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All commercial insurance policies required to be maintained pursuant
to Section 5.10 are in full force and effect and all premiums with respect
thereto have been paid in full.
SECTION 3.22. IMMUNITY
Neither the Company 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
Company or any of its Subsidiaries is a party.
SECTION 3.23. FOREIGN CORRUPT PRACTICES ACT
Neither the Company 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 Company, 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 paid (or will, as and when
required, have been 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 hereof or of any of the other
Transaction Documents.
SECTION 3.25. ENFORCEMENT; PERFORMANCE
It is not necessary solely (a) in order to execute or enforce any
rights in Bermuda under this Agreement or under any other Financing Document to
which the Company is a party or (b) by reason of the entry into or performance
hereof or of any other Financing Document to which the Company is a party, that
the Administrative Agent or any Lender be licensed, qualified or entitled to do
business in Bermuda.
SECTION 3.26. DISPUTES
As of the Closing Date, (a) there are no material disputes between
the Company and the Contractor with respect to amounts owing under the
Construction Contract, (b) there are no disputes between the Company and the
Contractor with respect to the performance of any obligations under the
Construction Contract or otherwise, except those that have been disclosed to the
Independent Engineer, (c) to the best of the Company's knowledge, there are no
material disputes between Level 3 and the NACS Contractor with respect to
amounts owing under the NACS Construction Contract, and (d) to the best of the
Company's knowledge, there are no disputes between Level 3 and the NACS
Contractor with respect to the performance of any obligations under the NACS
Construction Contract or otherwise, except those that have been disclosed to the
Independent Engineer.
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SECTION 3.27. INDEBTEDNESS
Except pursuant to the Financing Documents, the Company has not
incurred any Indebtedness other than Indebtedness permitted pursuant to Section
6.1.
SECTION 3.28. OTHER ACTS
All acts, conditions and things required to be done, fulfilled and
performed by the Company as of the Closing Date and as of each date this
representation and warranty is made or deemed made in order to (a) enable the
Company to lawfully enter into or exercise its rights and perform its
obligations under the Financing Documents and Project Documents, (b) ensure that
the Company's obligations under the Financing Documents and the Project
Documents are legal, valid and binding and (c) make the Financing Documents and
the Project Documents enforceable, have been done, fulfilled and performed.
SECTION 3.29. PROJECT COSTS
The Project Costs (and other costs) set forth in the Project Budget
reflect the Company's best estimates of all Project Costs and other costs
necessary for the design, development, engineering, acquisition, installation,
landing, construction, completion, start-up, testing, ownership, possession and
financing of the Project.
SECTION 3.30. SUBMISSION TO JURISDICTION
The Company has validly submitted to the jurisdiction of the Courts
of the State of New York and the Federal Courts for the Southern District of New
York.
SECTION 3.31. TAXATION
Since the Closing Date there has been no (a) announced change in tax
law or tax treatment applicable to the Company, any of its Subsidiaries or the
License Affiliates or (b) tax liability or tax obligation of any kind imposed or
to be imposed on the Company, any of its Subsidiaries or the License Affiliates
that in either case could reasonably be expected to have a Material Adverse
Effect; provided, however, that any threshold percentage set forth in
subsections 5.8(b) and 6.23(e) shall be neither determinative nor construed as a
benchmark with respect to any such determination.
SECTION 3.32. REPRESENTATIONS AND WARRANTIES
All representations and warranties of the Company and its
Subsidiaries and, to the Company's knowledge, the Sponsor, contained in the
Project Documents are true and correct in all material respects. All
representations and warranties of the Company and its Subsidiaries and to the
Company's knowledge, the Sponsor, contained in the Security Documents are true
and correct in all material respects.
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ARTICLE IV
CONDITIONS
SECTION 4.1. CLOSING DATE
The occurrence of the Closing Date shall be subject to the
fulfillment of, or waiver in its sole discretion by, each Lender, of each of the
following conditions precedent:
(a) NOTES. The Company shall have duly issued, executed and
delivered, upon written request, to each Construction Loan Lender, a
Construction Loan Note, dated the Closing Date, with appropriate insertions and
in a principal amount equal to such Lender's Construction Loan Commitment.
(b) AVAILABLE FUNDS. The Administrative Agent shall have received
evidence reasonably satisfactory to it that the Company has transferred all
available funds of the Company as of the Closing Date to the Construction
Account.
(c) FINANCING DOCUMENTS. The Administrative Agent shall have
received each of the following documents, each duly executed and delivered by
each of the parties thereto:
(i) this Agreement;
(ii) each Security Document, together with (A) the stock
certificates representing all of the Capital Stock of the Subsidiaries
of the Company, (B) undated stock powers for each stock certificate
representing such Capital Stock, executed in blank and delivered by a
duly authorized officer of the Company and (C) undated transfer
certificates for each stock certificate representing such Capital
Stock, executed in blank and delivered by a duly authorized officer of
the Company;
(iii) the Shareholder Pledge Agreement, together with (A)
the stock certificates representing all of the Capital Stock of the
Company owned by the Shareholder and FLAG Telecom Japan Limited owned
by FLAG Telecom Ireland Limited, (B) undated stock powers for each
stock certificate representing such Capital Stock, executed in blank
and delivered by a duly authorized officer of Shareholder and FLAG
Telecom Ireland Limited (as applicable) and (C) undated transfer
certificates for each stock certificate representing such Capital
Stock, executed in blank and delivered by a duly authorized officer of
Shareholder and FLAG Telecom Ireland Limited (as applicable);
(iv) the Subsidiary Guarantee Agreements;
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(v) the Letter Agreement; and
(vi) the Consents, PROVIDED that the acknowledgment of the
Contractor Consent by Alcatel shall be executed no later than five (5)
days after the Closing Date.
(d) PROJECT DOCUMENTS. The Administrative Agent shall have
received a true and complete copy of each of the following documents, duly
certified by a Responsible Officer of the Company as such on the Closing Date,
and each in form and substance reasonably satisfactory to the Administrative
Agent:
(i) the Construction Contract, together with each
amendment and Contract Variation thereto;
(ii) the NACS Construction Contract, together with each
amendment thereto;
(iii) the Development Agreement;
(iv) the Fiber Pair Agreements;
(v) the Level 3 Guarantee;
(vi) the Cable Station Agreements which have been executed
prior to the Closing Date;
(vii) the Performance Bonds;
(viii) the Backhaul Agreements which have been executed prior
to the Closing Date; and
(ix) each Capacity Sales Agreement executed by the Company
as of the Closing Date, together with each original Capacity Sales
Agreement Letter of Credit, if applicable.
(e) LEGAL OPINIONS. The Administrative Agent shall have received
the following opinions of counsel, dated the Closing Date, each in form and
substance satisfactory to the Administrative Agent and addressed to each of the
Secured Parties:
(i) the legal opinions of Bermuda counsel to the Company
and the Sponsor, substantially in the forms of EXHIBIT M-1;
(ii) the legal opinion of New York counsel to the Company
and the Sponsor, substantially in the form of EXHIBIT M-2;
(iii) the legal opinion of English counsel to the Company
with respect to the Construction Contract and certain other documents,
substantially in the form of EXHIBIT M-3;
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(iv) the legal opinion of New York counsel to the
Administrative Agent and the Lenders, substantially in the form of
EXHIBIT M-4;
(v) the legal opinion of Hong Kong counsel to the Company
and the Sponsor, substantially in the form of EXHIBIT M-5;
(vi) the legal opinion of Japanese counsel to the to the
Company and the Sponsor, substantially in the form of EXHIBIT M-6;
(vii) the legal opinion of Korean counsel to the Company
and the Sponsor, substantially in the form of EXHIBIT M-7;
(viii) the legal opinion of English counsel to the Company
and the Sponsor, substantially in the form of EXHIBIT M-8; and
(ix) the legal opinion of Irish counsel to the Company and
the Sponsor, substantially in the form of EXHIBIT M-9.
(f) INDEPENDENT ENGINEER'S REPORT. The Administrative Agent shall
have received a report of the Independent Engineer, in form and substance
satisfactory to the Administrative Agent.
(g) MARKET CONSULTANT'S REPORT. The Administrative Agent shall
have received a report of the Market Consultant (setting forth, without
limitation, projection of revenues of the Project), in form and substance
satisfactory to the Administrative Agent.
(h) INSURANCE ADVISOR'S REPORT. The Administrative Agent shall
have received (i) a report of the Insurance Advisor, dated as of the Closing
Date, in form and substance satisfactory to the Administrative Agent and (ii) a
certificate of the Insurance Advisor, setting forth the types and amounts of
insurance obtained by the Contractor and the risks covered thereby.
(i) PROJECT TIMETABLE; PLAN OF WORK. The Administrative Agent
shall have received from the Company (i) a true and complete copy of the Project
Timetable, in form and substance satisfactory to the Administrative Agent (after
consultation with the Independent Engineer), and (ii) a true and complete copy
of the Plan of Work, each duly certified by a Responsible Officer of the Company
as such as of the Closing Date.
(j) PROJECT BUDGET. The Administrative Agent shall have received
from the Company the Project Budget, in form and substance satisfactory to each
Lender, which sets forth all anticipated costs to be incurred in connection with
the construction and start-up of the Project, including, without limitation, all
construction and non-construction costs, and all interest, taxes and other
carrying costs, and such other information as the Administrative Agent may
reasonably request but excluding, for the avoidance of doubt, similar costs in
connection with Customer
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Upgrades. The Project Budget will contain an appropriate number of Budget
Categories and will detail (i) the Budget Category Amount for each Budget
Category, and (ii) the expenditures to date in each Budget Category, and such
other information as the Administrative Agent may reasonably require, together
with a balanced statement of uses and sources of proceeds, broken down as to
separate con struction phases and components.
(k) SUFFICIENCY OF FUNDING. The Administrative Agent shall be
satisfied that the amounts available under the Construction Funding Facilities,
shall be sufficient to pay all remaining Project Costs set forth in the Project
Budget.
(l) DUE AUTHORIZATION; EXECUTION AND DELIVERY. Each of the
Transaction Documents contemplated to be executed on or prior to the Closing
Date shall have been duly authorized, executed and delivered by the respective
parties thereto and shall be in full force and effect on the Closing Date and
all conditions precedent to the effectiveness thereof set forth therein shall
have been duly satisfied and no event or condition shall have occurred or be
continuing that constitutes or, with the giving of notice or lapse of time or
both, would constitute a default thereunder or a breach thereof or would give
any party thereto the right to terminate any thereof, and the Administrative
Agent shall have received evidence as to such authorization, execution and
delivery.
(m) RECORDATION AND FILING. Each of the documents and instruments
identified on SCHEDULE 3.11(b) shall have been recorded or filed in the
respective places or offices set forth in SCHEDULE 3.11(b), all recording and
filing fees with respect thereto shall have been paid and all other actions
necessary for the making of the representation in Section 3.11(b) shall have
been taken (including, but not limited to, the delivery of a control account
agreement with respect to the Company's deposit accounts held with the
Administrative Agent).
(n) TAXES. All Taxes, if any, payable or indemnifiable by the
Company on or prior to the Closing Date in connection with the execution,
delivery, performance, recording and filing of the Transaction Documents and the
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. The Administrative Agent
shall be satisfied (based on discussions with the Independent Engineer) that
adequate provision has been made in the Project Budget and the Operating Budget
for the payment of all Taxes payable or indemnifiable by the Company arising out
of the importation, ownership, use or operation of the Project or any portion
thereof within the jurisdictional limits of each Subsidiary.
(o) REPRESENTATIONS AND WARRANTIES. All representations and
warranties made by the Company, the Sponsor and the Contractor (i) in this
Agreement, in any other Financing Document and in the Construction Contract
shall be true and correct in all respects on and as of the Closing Date as if
made on and as of the Closing Date and (ii) in any other Project Document shall
be true and correct in all material respects on and as of the Closing Date as if
made on and as of the Closing Date.
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(p) 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 any of the transactions contemplated hereby or by
the other Transaction Documents.
(q) ORGANIZATIONAL DOCUMENTS; RESOLUTIONS; INCUMBENCY. The
Administrative Agent shall have received from each of the following Persons
certified copies of such Person's Organizational Documents and a Certificate of
Resolutions and Incumbency:
(i) the Company;
(ii) the Shareholder;
(iii) each Subsidiary of the Company; and
(iv) each Affiliate of the Company party to a Financing
Document.
(r) OFFICERS' CERTIFICATES. The Administrative Agent shall have
received an Officers' Certificate with respect to the Company and each
Subsidiary, each License Affiliate and the Shareholder.
(s) PROJECTIONS. The Administrative Agent shall have received
from the Company operating projections and analysis for the Project certified by
a Responsible Officer of the Company as being prepared in good faith in full
consideration of all information known to such officer, after due inquiry, as of
the Closing Date, a copy of which is annexed as EXHIBIT I or shall be
satisfactory in form and substance to the Administrative Agent (the "OPERATING
PROJECTIONS"), and sets forth projections of revenues, operating and other
expenses and cash flows of the Project and the Cumulative Capacity Sales
Revenue, Interest Coverage Ratio and the Present Value Coverage Ratio for each
fiscal quarter prior to the Final Maturity Date, in form and substance
reasonably satisfactory to the Administrative Agent, of the projected Operating
Expenses associated with the Project with respect to each Operating Year prior
to the Final Maturity Date, together with the Operating Payments to be received
by the Company from the Capacity Purchasers in respect of operation and
maintenance payments in such detail and based upon such assumptions as shall be
satisfactory to the Administra tive Agent (after consultation with the
Independent Engineer).
(t) NO VIOLATION OF APPLICABLE LAW. The consummation of the
transactions contemplated hereby and by the other Transaction Documents shall
not violate any Applicable Law.
(u) MATERIAL ADVERSE CHANGE. (i) No material adverse change in
the financial condition, business or operations of the Company, Xxxxx 0, the
Contractor, (ii) the NACS Contractor or any of their respective Subsidiaries or
the Project shall have occurred, and no other
80
event shall have occurred which, in either case, could reasonably be expected to
have a Material Adverse Effect.
(v) FINANCIAL STATEMENTS. The Administrative Agent shall have
received:
(i) the audited balance sheet of FLAG Telecom Holdings
Limited as of December 31, 2000;
(ii) the most recent annual audited balance sheet and
related financial statements of the Contractor and Alcatel; and
(iii) the balance sheet of the Company as of June 30, 2001.
In addition, there shall have been no material adverse change in the financial
condition of each such Person since the date of such financial statements.
(w) AGENT FOR SERVICE OF PROCESS. The Administrative Agent shall
have received evidence that the Company has irrevocably appointed an agent for
service of process in accordance with Sections 5.18 and 10.9, and that such
agent has accepted the appointment and has agreed to forward forthwith to the
Company all legal process addressed to such party received by such agent.
(x) FEES. The Lead Arranger and the Administrative Agent shall
have each received all amounts due on the Closing Date under or in connection
with any engagement letter and fee letters entered into by the Company with the
Lead Arranger and Administrative Agent with respect to the Project.
(y) PARTICIPATION AGREEMENTS. (i) WestLB shall have received the
Participation Agreement, the Participation Voting Agreement and the Collateral
Account Security Agreement, each duly executed and delivered by each of the
parties thereto and (ii) the collateral account established in connection with
the Participation Agreement and the Collateral Account Security Agreement shall
be fully funded.
(z) OTHER MATTERS. The Administrative Agent and the Lenders shall
have each received such information, opinions, documents, evidence and copies of
such other documents as any of them or their respective counsel may reasonably
request, which information, opinions and documents shall be reasonably
satisfactory in form and substance to such requesting party.
SECTION 4.2. LOANS
The obligation of each Lender to make available Loans on any
Borrowing Date shall be subject to the Closing Date having occurred and the
fulfillment of, or waiver, in the discretion of the Majority Lenders, of each of
the following conditions precedent:
(a) BORROWING NOTICE. The Administrative Agent shall have
received a Borrowing Notice from the Company in accordance with Section 2.3.
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(b) EVIDENCE OF PROJECT COSTS. (i) In relation to Construction
Loans only, at least fifteen (15) Business Days prior to the Borrowing Date for
such Construction Loan, the Administra tive Agent and the Independent Engineer
shall have received a Construction Progress Report, together with a statement of
the payments to be made in respect of Project Costs with the proceeds of such
Construction Loans, together with the draft Borrowing Notice and other
documentation reasonably requested by and satisfactory to the Administrative
Agent and with respect to all other items of Project Costs to be paid or
advanced with the proceeds of such Construction Loans.
(ii) Each Construction Progress Report delivered pursuant
to this Section 4.2(b) may provide for an additional amount for
payments required to be made prior to the next Construction Loan
Borrowing Date but which are not specified in such Construction
Progress Report in an amount not to exceed (A) $5,000,000 per calendar
month, plus any payments of value added taxes which are expected to
become payable prior to the next Borrowing Date and (B) $15,000,000 in
the aggregate, plus any payments of value added taxes which are
expected to become payable prior to the next Construction Loan
Borrowing Date at any time (the "ADDITIONAL BORROWING AMOUNT") which
amounts shall be placed into the Current Account; PROVIDED, HOWEVER,
that the immediately succeeding Construction Progress Report shall
specify in reasonable detail to what payments the Additional Borrowing
Amount has been applied.
(c) SUFFICIENCY OF FUNDING. The Administrative Agent shall be
satisfied that the amounts available under the Construction Funding Facilities
shall be sufficient to pay all remaining Project Costs set forth in the Project
Budget.
(d) OPEX EQUITY. The OpEx Equity, less any amounts distributed to
the Company to repay the Sponsor pursuant to Section 8.8(a), shall have been
provided for in full by the Sponsor and deposited into the Pre-Sale Proceeds
Account.
(e) CASH EQUITY CONTRIBUTIONS. The Cash Equity Contributions to
the Company shall have been fully applied to the payment of Project Costs.
(f) ADVANCE PRE-SALES EQUITY. The Advance Pre-Sales Equity shall
have been fully applied to the payment of Project Costs.
(g) CUMULATIVE CAPACITY SALES REVENUE. The Company shall have
received Cumulative Capacity Sales Revenue in an aggregate amount of not less
than $20,000,000.
(h) INDEPENDENT ENGINEER'S REPORT; CERTIFICATE. In relation to
Construction Loans only, the Administrative Agent shall have received a report
of the Independent Engineer within six (6) Business Days of the Independent
Engineer's receipt of a Construction Progress Report, reasonably satisfactory in
form and substance to the Administrative Agent, to the effect that the
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development of the Project is proceeding satisfactorily in accordance with the
scope of the Construction Contract, the NACS Construction Contract, the Backhaul
Agreements and the Cable Station Construction Agreements and within the overall
Project Budget, and each of the Critical Timetable Events set forth in the
Project Timetable to be completed by such date has been completed. The
Independent Engineer's report shall also disclose any events or changes that
have occurred since the date of the last report delivered to the Lenders that
have had or could reasonably be expected to have a Material Adverse Effect. No
later than five (5) Business Days prior to such proposed Borrowing Date for such
Construction Loan, the Administrative Agent shall have received, with a copy for
each Lender if the Administrative Agent so requests, a certificate from the
Independent Engineer, dated five (5) Business Days prior to such proposed
Borrowing Date and stating that in its reasonable judgment (based upon
Contractor and NACS Contractor performance to date in achieving scheduled
milestones and upon industry-wide performance and taking into account any
changes in resource allocation and in the overall construction program), the
Contractor and NACS Contractor will achieve the next Critical Timetable Event on
or before the time required in the Project Timetable and the next Acceptance can
be expected to occur prior to the Required Applicable Acceptance Date, and the
Independent Engineer has received the Construction Progress Report(s) delivered
since the preceding Borrowing Date, which shall be true and correct in all
material respects, and, in the reasonable judgment of the Independent Engineer,
payments made pursuant to the Backhaul Agreements and the Cable Station
Agreements have been made in accordance with the provisions of such agreements,
payments made to the Contractor have been made in accordance with the provisions
of the Construction Contract and payments made to the NACS Contractor have been
made in accordance with the provisions of the NACS Construction Contract.
(i) PERFORMANCE BONDs. (i) The Performance Bonds shall be in full
force and effect and in the stated amounts and (ii) the Company Performance Bond
shall have been amended or revised to the reasonable satisfaction of the
Administrative Agent to provide that drawings thereunder shall be paid to the
Company to the Special Payment Account and a notice of assignment shall have
been provided in accordance with subsection 2.D) thereof.
(j) REPRESENTATIONS AND WARRANTIES. All representations and
warranties made or deemed made by the Company on the applicable Borrowing Date
in this Agreement shall be true and correct in all material respects on and as
of such date (unless any such representation or warranty relates solely to an
earlier date, in which case it shall have been true and correct in all material
respects as of such earlier date).
(k) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date, or shall occur as a
result of giving effect to the extension of credit to be made on such date.
(l) 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 render void, voidable or invalid or require or cause the
cancellation, suspension or termination of any of the Financing Documents
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or any of the Project Documents, and which would in the Administrative Agent's
reasonable discretion be likely to have a Material Adverse Effect or (ii) which
would cause any of the transactions contemplated hereby to violate any
Applicable Law and which would in the Administrative Agent's reasonable
discretion be likely to have a Material Adverse Effect.
(m) PERFECTION OF LIENS AND SECURITY INTEREST. All filings,
recordings and other actions that are necessary or, in the judgment of the
Administrative Agent, desirable in order to establish, protect and perfect the
Administrative Agent's lien on and perfected security interest in (and the First
Priority status thereof) all right, title, estate and interest of the Company,
its Subsidiaries, each License Affiliate or the Shareholder, as the case may be,
in and to the Subject Collateral, 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 authenticated copies, with a copy for each Secured Party, or other
evidence of all filings, recordings and other actions obtained or made in order
to create and perfect such perfected First Priority lien on and perfected
security interest in the Subject Collateral.
(n) GOVERNMENTAL ACTIONS: RIGHTS-OF-WAY, PERMITS. All
Governmental Actions and Rights-of-Way, including the assignment of Governmental
Actions and Rights-of-Way to the Company from Level 3 with respect to the NACS
(insofar as the same are to be assigned pursuant to the Development Agreement
and the Transfer Agreement), set forth in SCHEDULE 3.7(b) and any additional
Governmental Actions and Rights-of-Way which are required in accordance with
such Schedule or pursuant to Applicable Law to be obtained on or prior to the
date of such Construction Loan, shall have been duly obtained or made, shall be
in full force and effect and shall be Final. At least ten (10) Business Days
prior to the proposed Borrowing Date, the Administrative Agent shall have
received (i) copies of such Governmental Actions and Rights-of-Way to the extent
such Governmental Actions or Rights-of-Way are in writing or are required to be
in writing and (ii) a list of all Governmental Actions or Rights-of-Way which
have been obtained and which are not in writing, together with a certificate of
a Responsible Officer of the Company setting forth the procedure employed to
obtain such Governmental Actions and Rights-of-Way and confirming that such
items were not obtainable in writing from the issuer thereof. The Administrative
Agent (based on the advice of the Independent Engineer) shall have no reason to
believe that any of the Governmental Actions and Rights-of-Way listed in
SCHEDULE 3.7(b) which have not been obtained as of such date will not be
obtained prior to the date required in SCHEDULE 3.7(b).
(o) NO FORCE MAJEURE, ETC. No event of FORCE MAJEURE, or similar
event or condition shall exist 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
cancellation, suspension, termination or non-performance could not reasonably be
expected to have a Material Adverse Affect.
(p) MATERIAL ADVERSE CHANGE. (i) No material adverse change in
the financial condition, business or operations of the Company or the Project
shall have occurred since the
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Closing Date, (ii) no other event shall have occurred since the Closing Date and
(iii) no material adverse change in the financial condition, business or
operations of the Contractor or the NACS Contractor shall have occurred since
the Closing Date, which, in the case of either clauses (i), (ii) or (iii), could
reasonably be expected to have a Material Adverse Effect.
(q) PROJECT DOCUMENTS. Each of the Project Documents (other than
the Capacity Sales Agreements and other Project Documents not entered into as of
the relevant date of determination) shall be in full force and effect, no party
thereto shall be in material default thereunder and no condition shall then
exist which would permit any party to terminate any such Project Document,
unless (i) the party entitled to terminate any such Project Document is the
Company and the event or default giving rise to such termination right could not
be expected to have a Material Adverse Effect or (ii) the Company is in
compliance with Section 6.10 and such Project Document has either been replaced
in accordance with Section 6.11, the effect of such termination could not be
expected to have a Material Adverse Effect or the Administrative Agent has
determined that such Project Document, if terminated, would not need to be
replaced. No party to any such Project Document shall have asserted that such
Project Document has ceased to be valid and binding and in full force and effect
or that such party is no longer obligated to perform under such Project Document
unless such assertion, in the reasonable opinion of the Company and the
Administrative Agent, has no merit or the effect of such assertion could
otherwise not be expected to have a Material Adverse Effect.
(r) OTHER MATTERS. The Administrative Agent and the Lenders shall
have received such information, opinions, documents and copies of such other
materials as any of them may reasonably request, which information, opinions,
documents and materials shall be in form and substance reasonably satisfactory
to such requesting party.
SECTION 4.3. CONVERSION DATE
The obligations of the Construction Loan Lenders to convert their
respective Construction Loans to Term Loans hereunder shall be subject to the
fulfillment, or waiver by the Majority Lenders in their sole discretion, of each
of the following conditions precedent, together with each of the conditions set
forth in Section 4.2(j) through (m) and (o) through (r).
(a) TERM LOAN NOTES AND RELATED CERTIFICATE. Upon written
request, each Construction Loan Lender may receive a Term Loan Note in the
principal amount of such Lender's Term Loans as determined as of the
Conversion Date, each such Note dated the Conversion Date and duly executed
and delivered by the Company, in exchange for the return to the Company of the
outstanding Construction Loan Notes held by each Lender who requested such
Term Loan Notes, each marked "Canceled". In addition, the Administrative Agent
shall have received from the Company a certificate of a Responsible Officer
setting forth the amount of the Term Loans created on the Conversion Date,
together with such additional information for the Administrative Agent to
verify the conclusions set forth therein.
(b) PAYMENT OF PROJECT COSTS. All Project Costs and other costs
set forth in the
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Project Budget, scheduled to have been paid from the proceeds of amounts to be
funded under this Agreement and from the Cash Equity Contributions, the Level 3
Proceeds or the Advance Pre-Sales Equity shall have been paid in full, including
Residual Project Costs funded from the Construction Account in accordance with
Sections 8.9(b), or other support arrangements which are satisfactory to the
Administrative Agent shall have been made for the payment thereof.
(c) CUMULATIVE CAPACITY SALES REVENUE. The Company shall have
received Cumulative Capacity Sales Revenue PLUS Operating Payments and/or
Capacity Commitments, provided such Capacity Commitments shall be due and
payable no later than six (6) months after the Conversion Date, in an
aggregate amount of not less than $70,000,000.
(d) BACKHAUL COMPLETION AND CABLE BUILDINGS. The Backhaul
Elements and the Cable Buildings shall be ready for service as certified by
the Independent Engineer.
(e) GOVERNMENTAL ACTIONS; RIGHTS-OF-WAY. All Governmental Actions
and Rights-of-Way set forth in SCHEDULE 3.7(b) and any additional Governmental
Actions and Rights-of-Way which are required in accordance with such Schedule or
pursuant to Applicable Law to be obtained on or prior to the Conversion Date
shall have been duly obtained or made, shall be in full force and effect and
shall be Final, and a copy of each such Governmental Action and Right-of-Way (to
the extent such Governmental Action is in writing or is required to be in
writing pursuant to SCHEDULE 3.7(b)) shall have been delivered to the
Administrative Agent, together with a certificate of all Governmental Actions
which were obtained by the Company by a means other than in writing. The
Administrative Agent (based on the advice of the Independent Engineer) shall
have no reason to believe that any of the Governmental Actions and Rights-of-Way
listed in SCHEDULE 3.7(b) which have not been obtained as of such date will not
be obtained prior to the date required in SCHEDULE 3.7(b).
(f) OPERATING BUDGET; REVISED OPERATING PROJECTIONS. The
Administrative Agent shall have received (i) an Operating Budget covering the
first Operating Year of the Project, which shall be in form and substance
reasonably satisfactory to the Administrative Agent (upon consultation with the
Independent Engineer) and (ii) revised Operating Projections, prepared in a
manner consistent with the Operating Projections delivered pursuant to Section
4.1(s), in each case certified by a Responsible Officer of the Company as being
prepared in good faith in full consideration of all information known to such
officer, after due inquiry, as of the Conversion Date.
(g) PERFORMANCE BONDS. The Performance Bonds shall be in full
force and effect and in the stated amounts.
(h) DUE AUTHORIZATION; EXECUTION AND DELIVERY. Each of the
Transaction Documents (other than the Capacity Sales Agreements and other
Project Documents not entered into as of the relevant date of determination)
shall be in full force and effect without any event or condition having occurred
or existing that constitutes or, with the giving of notice or lapse of time or
both, would constitute a default thereunder or a breach thereof or would give
any party thereto the right
86
to terminate any thereof, unless, with respect to Project Documents only (i) the
party entitled to terminate any such Project Document is the Company and the
event or default giving rise to such termination right could not be expected to
have a Material Adverse Effect or (ii) the Company is in compliance with Section
6.10 and such Project Document has either been replaced in accordance with
Section 6.11, the effect of such termination could not be expected to have a
Material Adverse Effect or the Administrative Agent has determined that such
Project Document, if terminated, would not need to be replaced. No party to any
such Project Document shall have asserted that such Project Document has ceased
to be valid and binding and in full force and effect or that such party is no
longer obligated to perform under such Project Document unless such assertion,
in the reasonable opinion of the Company and the Administrative Agent, has no
merit or the effect of such assertion could otherwise not be expected to have a
Material Adverse Effect..
(i) INSURANCE ADVISOR'S REPORT. The Administrative Agent shall
have received a certificate from a Responsible Officer of the Company, dated as
of the Conversion Date, stating (i) the types and amounts of insurance obtained
by the Company, or an Affiliate of the Company for the benefit of the Company,
as per the original Insurance Advisor's report delivered pursuant to Section
4.1(h) and (ii) that such insurance is in full force and effect.
(j) ACCEPTANCE (FINAL PHASE). Acceptance (Final Phase) shall have
occurred by the Required Applicable Acceptance Date and the Administrative Agent
shall have received by such date a duly executed Certificate of Provisional
Acceptance (Final Phase 2) or Certificate of Commercial Acceptance (Final
Phase).
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 Company covenants and agrees with the
Administrative Agent and the Lenders that (except as permitted by the
applicable Lenders in accordance with Section 10.2):
SECTION 5.1. COMPLETION OF THE PROJECT
The Company shall cause the Project to be duly constructed and
completed in accordance with all applicable international, national, state and
local engineering, construction and safety codes and standards and in accordance
with the Specifications. The Company shall provide (I) to the Independent
Engineer a copy of each report furnished by (a) the Contractor to the Company
pursuant to the Construction Contract and the NACS Contractor pursuant to the
NACS Construction Contract, (b) any contractor or other counterparty pursuant to
the Backhaul
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Agreements, and (c) any contractor or other counterparty pursuant to the Cable
Station Construction Agreements and (II) to the Administrative Agent the
Company's monthly Project report and shall respond, and shall cause the
Contractor and any contractor or other counterparty to a Backhaul Agreement or
the Cable Station Construction Agreements (including the Sponsor or any
Affiliate thereof) to respond, to the Independent Engineer's reasonable
inquiries regarding such Person's performance of its work under the Construction
Contract, any Backhaul Agreement and any Cable Station Construction Agreements.
SECTION 5.2. FINANCIAL STATEMENTS AND OTHER INFORMATION
The Company shall deliver to the Administrative Agent the following:
(a) within ninety (90) days after the end of each fiscal year of
the Company, 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 Company and its
consolidated Subsidiaries in accordance with GAAP consistently applied;
(b) within forty five (45) days after the end of each of the
first three fiscal quarters of each fiscal year of the Company (commencing with
the fiscal quarter ending on the last day of the fiscal quarter in which the
Closing Date occurs), a consolidated balance sheet of the Company 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 Company as presenting fairly in all material
respects the financial condition and results of operations of the Company and
its consolidated Subsidiaries in accordance with GAAP consistently applied,
subject to normal 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 Company 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);
88
(e) following the Conversion Date, simultaneously with the
delivery of any Expense Certificate in accordance with Section 8.11(a), to the
Administrative Agent only, a certificate of a Responsible Officer of the Company
setting forth all Operating Expenses, capital expenditures and income taxes paid
out of the Current Account since the date of the last Expense Certificate;
(f) promptly after its receipt, copies, to the extent in writing
(or, to the extent not in writing, a certificate of a Responsible Officer of the
Company setting forth each Governmental Action or Right-of-Way obtained which is
not in writing and the procedure employed for obtaining such Governmental Action
or Right-of-Way) of each Governmental Action or Right-of-Way obtained or made by
the Company, or obtained or made by the Contractor and delivered to the Company
pursuant to the Construction Contract or obtained or made by the NACS Contractor
or Level 3 and delivered to the Company pursuant to the NACS Construction
Contract or the Development Agreement, as applicable;
(g) promptly after the Company's delivery thereof or receipt
thereof, as the case may be, a copy of each material notice, document, report,
demand or other communication (not to include routine correspondence) delivered
pursuant to any Project Document or otherwise, and a copy of each financial
statement of any party to a Project Document (other than the Company) received
by the Company pursuant to any Project Document; and
(h) such other information respecting the conditions or
operations, financial or otherwise, of the Company or any Subsidiary thereof as
the Administrative Agent may from time to time reasonably request.
SECTION 5.3. REPORTS; OTHER INFORMATION
The Company shall deliver to the Administrative Agent (and the
Administrative Agent shall provide copies to each Lender) within thirty (30)
days after the end of each fiscal quarter (commencing with the first fiscal
quarter ending after the Closing Date) 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 fiscal quarter, (ii) the aggregate
amount of Capacity Commitments due, but not yet paid, as at the end of such
fiscal quarter and the date such Capacity Commitments became due, (iii) a list
of the Capacity Purchasers who have purchased or leased Capacity and the
aggregate dollar value of Capacity acquired by each such Capacity Purchaser
during such fiscal quarter, (iv) the aggregate STM-1s disposed of during such
fiscal quarter, (v) any termination of commitments for the sale, lease or other
disposition of Capacity during such fiscal quarter, (vi) the aggregate amount of
Capacity disposed of for non-cash consideration during such fiscal quarter, and
(vii) any and all rebates or other returns of cash to Capacity Purchasers during
such fiscal quarter.
(b) The Company shall deliver to the Administrative Agent (and
the Administra tive Agent shall provide copies to each Lender) within twenty
(20) days after the end of each fiscal quarter falling after the fiscal quarter
in which the Conversion Date occurs, a certificate of a Responsible Officer of
the Company setting forth reasonably detailed calculations of the
89
Cumulative Capacity Sales Revenue, Interest Coverage Ratio and Present Value
Coverage Ratio, in each case calculated as of the end of such fiscal quarter in
accordance with Sections 6.28, 6.29 and 6.30, and if such calculations
demonstrate that a Designated Event shall have occurred and be continuing, a
certification thereof.
(c) Within three Business Days prior to each Principal Payment
Date, the Company shall deliver to the Administrative Agent (and the
Administrative Agent shall provide copies to each Lender) a certificate setting
forth the Required Balance with respect to the Debt Reserve Account and the
Capacity Upgrades Reserve Account, as of such Principal Payment Date.
(d) The Company shall deliver to the Administrative Agent each
new Pricing Schedule effective upon its adoption.
(e) The Company shall deliver to the Administrative Agent (and
the Administra tive Agent shall provide copies to each Lender) each Certificate
of Provisional Acceptance or Certificate of Commercial Acceptance each of which
shall be duly endorsed by the Company and the Independent Engineer within five
(5) Business Days of the date of the applicable Acceptance Date.
(f) The Company shall notify the Administrative Agent of its
intent to enter into the Transfer Agreement no later than ten (10) days prior to
the proposed date for entering into such document.
SECTION 5.4. PAYMENT OF OBLIGATIONS
The Company 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 5.5. EXISTENCE
The Company 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 5.6. COMPLIANCE WITH LAWS
The Company 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
90
Governmental Actions) applicable to it or its property, except where the failure
to do so, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
SECTION 5.7. PERFORMANCE AND ENFORCEMENT OF AGREEMENTS
The Company shall, and shall cause each of its Subsidiaries to,
observe in all material respects the covenants and agreements of the Company or
such Subsidiary, as the case may be, contained in each Transaction Document and
all of its other material obligations contained in each other document to which
the Company or such Subsidiary is a party. The Company shall, and shall cause
each of its Subsidiaries to, enforce in a diligent and commercially reasonable
manner all of its rights under the Transaction Documents, unless forbearance is
commercially reasonable.
SECTION 5.8. TAXES AND CLAIMS
The Company 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 Company shall use its best efforts to, and shall cause
each of its Subsidiaries to use its best efforts to, maintain and keep in full
force and effect all clearance rulings, decrees or similar items necessary to
continue the exemption of the Company or such Subsidiary from the impositions of
any Tax or similar charge on which the Company or such Subsidiary is relying
(other than, with respect to any Operating Year, (i) value added taxes payable
in connection with sales of Capacity and (ii) any other Taxes and other charges
in an aggregate amount equivalent to a rate not exceeding 150% of the tax rate
assumed in the Project Budget or Operating Budget (as applicable) for Taxes with
respect to such Operating Year).
SECTION 5.9. NOTICES
The Company shall, promptly after a Responsible Officer of the
Company has knowledge thereof, give written notice to the Administrative Agent
(and the Administrative Agent shall provide copies to each Lender) 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 Company or has been outstanding for
greater than 60 days;
(c) any litigation or similar proceeding affecting the Company,
any of its Subsidiaries or the Project (or any portion thereof) or concerning
any Governmental Action relating to the
91
Project (including any Governmental Action between any Capacity Purchaser and
any Governmental Authority), which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(d) any proceeding by or before any tax regulatory authority
contesting the tax position of the Company or any of its Subsidiaries if the
resolution of such proceeding could result in an increased liability in excess
of $1,000,000;
(e) any event constituting FORCE MAJEURE under any Principal
Project Document which may have a material adverse impact on the Project;
(f) the cancellation or revocation of any material Governmental
Actions, Rights-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, Rights-of-Way or other consents or approvals;
(g) any Lien (other than Permitted Liens) against any Collateral
or any portion of the Project;
(h) the initiation of any condemnation or expropriation or
similar proceedings against any of the Collateral or the Project or any portion
thereof;
(i) any proposed change or supplement to the configuration of the
Project approved by the Company's Board of Directors or of any event which could
lead to a change, supplement or breakage in the system configuration (as
described in the Construction Contract, the NACS Construction Contract, the
Cable Station Construction Agreements and the Cable Station Agreements (if
applicable)), including, without limitation, a change in any landing point (not
covered by a disclosed contingency plan) and the addition or removal of a city
therefrom;
(j) any issuance or proposed issuance of any class of Capital
Stock of the Company, or of any sale or proposed sale of any Capital Stock of
the Company;
(k) its intent to enter into any material amendment to any
Principal Project Document (excluding Capacity Sales Agreements to the extent
such amendment is on commercially reasonable terms) or the FLAG Guarantee,
together with a draft thereof prior to its execution as well as an executed
counterpart upon execution;
(l) any interruption in the operation of the Project (or any
portion thereof) of which the Company generally notifies its customers; and
(m) any other event, fact or development that has resulted in, or
could reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.10. INSURANCE
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The Company shall purchase, or shall cause to be purchased, no later
than thirty (30) days after the Closing Date, insurance complying with the
provisions of subsection 5.10(b) and shall promptly deliver to the
Administrative Agent (i) certificates of insurance signed in each case by the
insurer or an agent authorized to bind the insurer (or other evidence of
insurance reasonably satisfactory to the Administrative Agent) and (ii) a
certificate of the Insurance Advisor, setting forth the types and amounts of
insurance obtained by the Company, or obtained by an Affiliate of the Company
for the benefit of the Company, and the risks covered thereby, and stating that
such insurance is in full force and effect, complies with the requirements of
subsection 5.10(b) and that all currently due premiums therefor have been paid
in full.
(b) The Company shall, and shall cause each of its Subsidiaries
and the License Affiliates to, at all times carry and maintain or cause to be
carried and maintained the insurance set forth in SCHEDULE 5.10. All such
insurance shall comply with the other provisions set forth in SCHEDULE 5.10. The
Company shall promptly deliver one true and com plete copy of each insurance
policy requested by the Administrative Agent, duly certified by a Responsible
Officer of the Company.
SECTION 5.11. FISCAL YEAR
The fiscal year of the Company and its Subsidiaries shall be the
twelve-month period ending on December 31 of each year.
SECTION 5.12. USE OF PROCEEDS
The proceeds of the Construction/Term Loans shall be used to finance
the Project Costs in accordance with the Schedule of Sources and Uses.
SECTION 5.13. INTEREST RATE PROTECTION
The Company shall, (i) within three (3) months after the Closing
Date, enter into one or more Interest Hedging Agreements to hedge the Company's
interest rate exposure on at least 50% of the projected outstanding Loans until
three (3) months after the projected Conversion Date and (ii) within three (3)
months after the Conversion Date, enter into one or more Interest Hedging
Agreements to hedge the Company's interest rate exposure on at least 50% of the
outstanding Term Loans from time to time for a period of at least three (3)
years from the Conversion Date, all on terms reasonably satisfactory to the
Administrative Agent.
SECTION 5.14. CAPACITY SALES AGREEMENT LETTERS OF CREDIT
The Company shall cause any and all reimbursement obligations
related to each letter of credit that is issued in support of a Capacity
Purchaser's payment obligations under a Capacity
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Sales Agreement to be on a non-recourse basis with respect to the Company, its
revenues, property and other assets (including, without limitation, the Project
and any portion thereof), other than in respect of limited recourse obligations
in favor of certain providers of Capacity Sales Agreement Letters of Credit, but
only to the extent such recourse is limited to a Permitted Lien on the Company's
rights under the corresponding Capacity Sales Agreement.
SECTION 5.15. GOVERNMENTAL ACTIONS AND RIGHTS-OF-WAY
The Company 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 Company and its Subsidiaries, (a) to operate and
maintain the Project in accordance with the Operating Budget, (b) to transfer
Capacity 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 5.16. COOPERATION WITH INDEPENDENT ENGINEER
The Company 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 Acceptance Date (Final Phase), all material matters relating to the
Project, and shall meet (and use its best efforts to cause the Contractor and
NACS Contractor to meet) the Independent Engineer at reasonable times and upon
reasonable notice to discuss any of the foregoing. The Independent Engineer
shall be provided full access to the Project, on the provision of reasonable
notice, for the purpose of satisfying the provisions of this Agreement.
SECTION 5.17. REVENUE ACCOUNT
Subject to Section 8.2, the Company shall deposit, and shall direct
others (including all of its Subsidiaries) to pay or deposit, all Project
Revenues after the Conversion Date directly into the Revenue Account as required
by Article VIII.
SECTION 5.18. MAINTENANCE OF PROCESS AGENT
The Company 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 pursuant to Section 10.9(e).
SECTION 5.19. SYSTEM OPERATION AND MAINTENANCE
The Company shall cause the Project to be operated and maintained in
an efficient and business-like manner and (consistent with Section 5.7) in
accordance with the terms of the Project Documents.
SECTION 5.20. EVENT OF LOSS
The Company shall immediately notify the Administra tive Agent in
writing (and the
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Administrative Agent shall provide copies to each Lender) of the occurrence of
an Event of Loss and, unless the affected portion of the Project is being
repaired, replaced or restored in accordance with Section 5.20(b), the Company
shall deliver to the Administrative Agent within thirty (30) days of the
occurrence of such Event of Loss, a certificate of a Responsible Officer of the
Company (the "EOL COMPLIANCE CERTIFICATE") certifying as to the Present Value
Coverage Ratio 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 or a Special Payment shall be
made and no Event of Default shall have occurred 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 (6)
months, (ii) in the Administrative Agent's reasonable opinion (after
consultation with the Consultants) there are or will be sufficient funds
available to the Company (from Permitted Sources, Special Payments, 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 substantially 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 Loans and all
other obligations owing to the Lenders), (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 Capacity Purchaser 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 any Project Document shall have
the right to terminate such 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 such 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
Company (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 Company, at its sole cost and expense, shall restore,
rebuild or replace the affected portion of the Project.
SECTION 5.21. BOOKS AND RECORDS; INSPECTION RIGHTS
The Company 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 Company shall, and shall cause each of its Subsidiaries to,
permit any representative of the Lenders designated by the Administrative Agent,
(as applicable) 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 Company agrees that the Administrative Agent, the Independent Engineer and
each other advisor to the Lenders (at the Company's expense), may visit the
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Company's executive offices, any other portion of the Project, each site where
Work is being performed (in each case, only to the extent of the Company's
rights of access thereto) and other properties owned by the Company or any of
its Subsidiaries at any and all reasonable times during normal business hours,
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 Company or any of its Subsidiaries or to the extent
the Company 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, including
invoices issued in connection with the NACS Construction Contract, 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 Contractor
in verifying construction progress to the extent the Company 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 reasonably requested by the Administrative Agent or the Independent
Engineer.
SECTION 5.22. FOREIGN CORRUPT PRACTICES ACT
The Company 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 5.23. INTELLECTUAL PROPERTY.
The Company shall own, or shall have valid licenses to use, and shall
cause each of its Subsidiaries to own or have valid licenses to use, all
Intellectual Property as and when 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 Company and its
Subsidiaries, taken as a whole, or the Project.
(b) The Company 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
Company 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 Company 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 5.24. OPERATING BUDGETS AND OPERATING REPORTS
Prior to the Conversion Date, and after prior review by and
discussion with the Administrative Agent (after consultation with the
Independent Engineer), the Company will adopt an operating budget (the
"OPERATING BUDGET") for the initial Operating Year. The Operating Budget will
contain such line items as are satisfactory to the Company, the Administrative
Agent and the Independent Engineer, including a line item estimate of project
revenues and cash operating costs for the forthcoming Operating Year and
accompanying textual guidance to the budget items. No fewer than thirty (30)
days prior to the beginning of each Operating Year of the Company thereafter,
and after prior review by and discussion with the Administrative Agent (after
consultation with the Independent Engineer), the Company will similarly adopt an
Operating Budget for the ensuing Operating Year of the Company PROVIDED in no
event shall any Operating Budget provide for capital expenditures (other than in
respect of Capacity Upgrades) in excess of $6,000,000 for such Operating Year.
Copies of the Operating Budget for each such Operating Year shall be delivered
promptly to the Administrative Agent and the Lenders together with an update of
the Operating Projections.
SECTION 5.25. SPARE PARTS
The Company shall maintain, on and after each applicable Acceptance,
at each maintenance depot such spare parts, test and maintenance equipment,
tools and consumables with respect to the applicable Phase as are customary in
accordance with the practices, standards and procedures for operators of
fiberoptic cables.
SECTION 5.26. MATERIAL REAL ESTATE ASSETS
In the event that the Company or any Subsidiary thereof acquires an
interest in, or a Real Estate Asset becomes, a Material Real Estate Asset and
such interest has not otherwise been made subject to the Lien of the Security
Documents in favor of Administrative Agent for the benefit of the Secured
Parties, then the Company or such Subsidiary, contemporaneously with acquiring
the interest in such Material Real Estate Asset, shall take all such actions and
execute and deliver, or cause to be executed and delivered, all such mortgages,
documents, instruments, agreements, opinions and certificates, or any other
documents as the Administrative Agent shall reasonably request, to create in
favor of Administrative Agent for the benefit of Secured Parties, a valid and,
subject to any filing and/or recording referred to herein, perfected First
Priority security interest in such Real Estate Assets, (subject to such
exclusions to title insurance coverage as may be provided under Applicable Law).
SECTION 5.27. NOTICES OF ASSIGNMENT
The Company shall notify all account debtors under all accounts and
general intangibles for money due of the First Priority security interest of the
Administrative Agent pursuant to the Company Security Agreements. Such notice
shall either be incorporated into the relevant agreements giving rise to such
accounts or general intangibles or the Company shall send a
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separate notice to the account debtor. Any such notice (whether included in the
relevant agreement or a separate notice) shall be in the form applicable to the
relevant Company Security Agreement.
SECTION 5.28. NACS TRANSFER
Concurrently with the occurrence of the Transfer Date, or as soon as
practicable thereafter, if and to the extent the Transfer Date occurs, the
Company shall:
(a) deliver to the Administrative Agent a true and complete copy
of the Transfer Agreement, duly certified by a Responsible Officer of the
Company substantially in accordance with the transfer principles contained in
the Development Agreement;
(b) in accordance with the Security Documents, pledge and assign
all assets (including the NACS Construction Contract and, to the extent
possible, all related material permits) in favor of the Administrative Agent as
Collateral for the benefit of the Secured Parties;
(c) deliver to the Administrative Agent a certificate from a
Responsible Officer of the Company confirming that in accordance with the
Development Agreement, the Company has effectively assumed from Level 3 (i) all
the material rights and obligations of Level 3 under the NACS Construction
Contract, (ii) to the extent possible, all material permits issued in connection
with the NACS Construction Contract, and (iii) all other agreements necessary to
effect the transfer of NACS to the Company;
(d) have been appointed the System Manager under the NACS
Construction Contract in accordance with Article 6 of the NACS Construction
Contract;
(e) have delivered to the Administrative Agent a consent to
assignment of the NACS Construction Contract, duly executed by each of the NACS
Contractor and the Company, substantially in the form of EXHIBIT H attached
hereto; and
(f) have filed all reports and/or received all approvals
necessary with any Governmental Authorities which are necessary to operate the
FNAL System after the Transfer Date.
SECTION 5.29. FOREIGN LICENSES - JAPAN
The Company shall (i) by the relevant Critical Timetable Event cause
a wholly-owned Subsidiary or an Affiliate of the Company to submit an
application to both the Ministry of Public Management, Home Affairs, Posts and
Telecommunica tions and the Minister thereof, with a copy to the Administrative
Agent, for a telecommunications license in Japan, (ii) thereafter, send copies
to the Administrative Agent of all correspondence sent to, and received from,
both the Ministry of Public Management, Home Affairs, Posts and
Telecommunications and the Minister thereof, with respect to such application
and (iii) use its best efforts to ensure that a Subsidiary or Affiliate is
granted such telecommunications license.
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(b) If a wholly-owned Subsidiary of the Company has not received
the license referred to in clause (a) above and such license shall not be in
full force and effect by the end of September 2002, then either (i) 100% of the
shares of FLAG Telecom Japan Limited shall be transferred to the Company so that
FLAG Telecom Japan Limited will be a wholly-owned Subsidiary of the Company, and
the Company and FLAG Telecom Japan Limited shall comply with the provisions of
Section 6.23 or (ii) the telecommunications license and all assets with respect
to the FNAL System (including, without limitation, real estate) owned by FLAG
Telecom Japan Limited shall be transferred to the Company or a newly created
wholly-owned Subsidiary of the Company, and the Company and such Subsidiary
shall comply with the provisions of Section 6.23.
(c) If the Company fails to comply with Section 5.29(b) above,
then it shall not be an Event of Default, but the percentage cash sweep in
Section 8.11(b)"sixth" shall be increased to 100% of the remaining cash
available in the Revenue Account for so long as it so fails to comply.
SECTION 5.30. FOREIGN LICENSES - HONG KONG
The Company shall (i) by the relevant Critical Timetable event cause
a wholly-owned Subsidiary or an Affiliate of the Company to submit an
application to the Office of the Telecommunications Authority of Hong Kong
("OFTA"), with a copy to the Administrative Agent, for a telecommunications
license in Hong Kong, (ii) thereafter, send copies to the Administrative Agent
of all correspondence sent to, and received from OFTA, with respect to such
application and (iii) use its best efforts to ensure that a Subsidiary or
Affiliate is granted such telecommunications license.
(b) If a wholly-owned Subsidiary of the Company has not received
the license referred to in clause (a) above and such license shall not be in
full force and effect by the end of July 2002, then either (i) 100% of the
shares of FLAG Telecom Asia Limited shall be transferred to the Company so that
FLAG Telecom Asia Limited will be a wholly-owned Subsidiary of the Company, and
the Company and FLAG Telecom Asia Limited shall comply with the provisions of
Section 6.23 or (ii) the telecommunications license and all assets with respect
to the FNAL System (including, without limitation, real estate) owned by FLAG
Telecom Asia Limited shall be transferred to the Company or a newly created
wholly-owned Subsidiary of the Company, and the Company and such Subsidiary
shall comply with the provisions of Section 6.23.
(c) If the Company fails to comply with Section 5.30(b) above,
then it shall not be an Event of Default, but the percentage cash sweep in
Section 8.11(b)"sixth" shall be increased to 100% of the remaining cash
available in the Revenue Account for so long as it so fails to comply.
SECTION 5.31. FOREIGN SECURITY
Notwithstanding anything to the contrary set forth in Section 6.23,
the Company shall
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take all steps necessary, and as may be required by the Administra tive Agent,
to ensure that the Administrative Agent has a First Priority security interest
in all Collateral, including (i) entering, or causing a Subsidiary or Affiliate
incorporated in Taiwan and related to the FNAL System to enter into, a security
agreement in the form of the Company Security Agreement (Taiwan), upon the
Company or such Subsidiary or Affiliate acquiring assets or entering into
contracts in Taiwan, (ii) causing a Subsidiary incorporated in Japan and related
to the FNAL System to enter into a security agreement in the form of the Company
Security Agreement (Japan) upon the Company or such Subsidiary acquiring assets
or entering into contracts in Japan pursuant to the requirements of Section
5.29, (iii) causing a Subsidiary incorporated in Hong Kong and related to the
FNAL System to enter into a security agreement in the form of the Company
Security Agreement (Hong Kong) upon the Company or such Subsidiary acquiring
assets or entering into contracts in Hong Kong pursuant to the requirements of
Section 5.30, (iv) complying with, or causing any such Subsidiaries referred to
in this Section 5.31 to comply with, Sections 6.23(b)(i), (c), (d) and (f),
whether or not wholly-owned and (v) using, or causing its Subsidiary FLAG
Telecom Korea Limited to use, its commercially reasonable efforts to obtain
consent from the Bank of Korea with respect to such Subsidiary entering into the
Subsidiary Guarantee Agreement and any other Company Security Agreements (Korea)
as applicable and, upon such consent being given, causing such Subsidiary to
enter into such Security Documents.
SECTION 5.32. FURTHER ASSURANCES
The Company shall cause to be promptly and duly taken, executed,
acknowledged and delivered all such further acts, documents and assurances as
the Administrative Agent from time to time may reasonably request in order to
carry out more effectively the intent and purposes hereof and of the other
Financing Documents, including with respect to the maintenance of perfection of
all Subject Collateral.
ARTICLE VI
NEGATIVE COVENANTS
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 other Financing Documents have been paid in full, the
Company covenants and agrees with the Administrative Agent and the Lenders that
(except as otherwise permitted by the applicable Lenders in accordance with
Section 10.2):
SECTION 6.1. INDEBTEDNESS
The Company shall not, and shall not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Indebtedness, except:
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(a) Indebtedness of the Company incurred under the Financing
Documents and in respect of the Obligations and the Guaranty of such
Indebtedness by any Subsidiary of the Company;
(b) Capital Lease Obligations of the Company or any Subsidiary
permitted by Section 6.15;
(c) Indebtedness of the Company under, or constituting net
exposure under, Interest Hedging Agreements entered into in accordance with
Section 5.13 or otherwise permitted by the Administrative Agent;
(d) Indebtedness of the Company or any Subsidiary under any
Permitted Sale Leaseback;
(e) unsecured Indebtedness of the Company or any Subsidiary owing
to the Shareholder, the Sponsor or to any Affiliate, the principal of which is
payable only after the repayment of the Obligations, which is expressly
subordinated to the Obligations and which contains 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 Company, 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 Company in accordance with clause "sixth" of Section 8.11(b)
and only if no Default, Event of Default or Designated Event shall have occurred
and be continuing);
(f) any other unsecured Indebtedness of the Company or any
Subsidiary owing to any other Person which is expressly subordinated to the
Obligations and which contains terms (including with respect to subordination)
that are satisfactory to the Administrative Agent; PROVIDED, HOWEVER, and only
to the extent, that the proceeds of such Indebtedness are utilized to pay
Project Costs in excess of those provided for in the Project Budget or Operating
Expenses in excess of those provided in the Operating Budget;
(g) Indebtedness of any Subsidiary of the Company to the Company
or another Subsidiary of the Company, PROVIDED that the Company shall use its
reasonable efforts to minimize the incurrence of withholding taxes by the
Project;
(h) Indebtedness of the Company under a letter of credit facility
entered into with a Lender or Affiliate thereof in the maximum aggregate amount
of $10,000,000;
(i) other Indebtedness of the Company and any Subsidiary in an
aggregate principal amount not to exceed $1,000,000 at any one time; and
(j) any limited-recourse Indebtedness in connection with the
procurement of Capacity
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Sales Agreement Letter of Credit, PROVIDED that recourse is limited to an
assignment of the Company's right to demand and receive payment from the
applicable Capacity Purchaser whose payment obligations are supported by such
Capacity Sales Agreement Letter of Credit.
SECTION 6.2. LIENS
The Company 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 Company 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.
SECTION 6.4. SALE OF ASSETS
The Company 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 hereof) in
accordance with Section 6.13;
(b) Transfers of assets in the ordinary course of business not
required for the efficient operation of the Project for fair value with a book
value not exceeding $10,000,000 in the aggregate for all fiscal years cumulative
for the life of the Project for all such Transfers under this clause (b);
(c) Transfers by the Company 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 assets by a Subsidiary of the Company to the
Company and by the Company to its Subsidiaries;
(f) Transfers of the Company's rights under Capacity Sales
Agreements made in favor of certain providers of Capacity Sales Agreement
Letters of Credit pursuant to conditional assignments in accordance with the
provisions of Section 5.14 of this Agreement; and
(g) Transfers of assets in accordance with the provisions of
Section 5.29 or 5.30 of this Agreement.
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PROVIDED that (i) the Net Cash Proceeds of a Transfer under clauses (b), (c)
and (d) shall be deposited in the Sales and Issuances Proceeds Account and
shall be applied in accordance with Section 2.9 and (ii) other proceeds
received in respect of Transfers permitted under this Section (including under
clause (a) but excluding Customer Upgrade Amounts) shall be, subject to
Section 8.2, deposited into the Revenue Account for application in accordance
with Article VIII.
SECTION 6.5. INVESTMENTS, ACQUISITIONS, ETC
The Company shall not, and shall not permit any of its Subsidiaries
to 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, Guaranty
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 Company or any of its Subsidiaries are, or might be, shared with
any Person, except:
(i) Permitted Investments;
(ii) the Company may own Capital Stock of wholly-owned
Subsidiaries created in accordance with Section 6.23;
(iii) the Company may make equity contributions in any
Subsidiary;
(iv) notwithstanding anything to the contrary set forth in
Section 6.23, the Company and its Subsidiaries may own Capital Stock of
entities in Korea and/or Taiwan established to hold licenses in
accordance with Applicable Law governing the ownership by foreign
persons of entities holding such licenses;
(v) Guaranties permitted by Section 6.1 and Guaranties
by the Company of obligations of its Subsidiaries to the extent such
obligations are set forth in the then current Project Budget and
Operating Budget;
(vi) the Company may enter into reasonable joint marketing
agreements or arrangements;
(vii) the Company may enter into the transactions
contemplated by the Project Documents;
(viii) the Company 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
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distributions on its Capital Stock, (y) parties to the transaction with
such Subsidiary shall have no recourse against the Company in respect
of such transaction and (z) such Subsidiary shall (to the extent
permitted by Applicable Laws) pledge it interest in the joint venture
in accordance with Section 6.7; and
(ix) the Company may acquire capacity on other
telecommunications systems on reasonable, arm's-length terms, PROVIDED
that any costs related thereto are (x) included within the Project
Budget or the relevant Operating Budget, (y) are supported by Capacity
Commitments by customers seeking capacity prior to completion of the
Project or (z) are acquired as non-cash consideration in connection
with a Capacity Sales Agreement permitted in accordance with Section
6.20(c); PROVIDED, HOWEVER, that any acquisition of such capacity shall
be funded directly with proceeds received under related Capacity Sales
Agreements.
(b) The Company shall not, and shall not permit any of its
Subsidiaries to enter into any management contract (other than Intra-Group
Agreements consistent with the terms of Section 6.18 and any other agreement
made by the Company and/or a Subsidiary thereof which is approved by the
Administrative Agent) or similar arrangement whereby its business or operations
are managed by any other Person; PROVIDED, HOWEVER that any sales of Capacity
may accrue commissions at not more than, on average, 2.5% per annum of the cash
proceeds of sales of such Capacity.
SECTION 6.6. RESTRICTED PAYMENTS
The Company shall not declare or make any Restricted Payment except:
(a) distributions by the Company in respect of its Capital Stock
which are payable solely in additional Capital Stock of the Company, 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 Administrative Agent, then only if such additional Capital Stock
(x) is subject to a First Priority perfected Lien in favor of the Administrative
Agent pursuant to the Shareholder Pledge Agreement or such other documentation
as shall be reasonably acceptable to the Administrative Agent and (y) is
delivered to the Administrative Agent, together with undated stock powers for
each stock certificate representing such additional Capital Stock, executed in
blank;
(b) distributions by the Company in respect of its Capital Stock
from funds available to the Company after the application of clauses "first"
through "sixth" of Section 8.11(b) (so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom) or with funds
available in the Distribution Account;
(c) so long as no Default or Event of Default shall have occurred
and be continuing or would result therefrom, the Company may purchase or redeem
shares of Capital Stock (or options or warrants in respect of such shares) of
the Company held by present or former officers
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or employees of the Company 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 amount of such purchases or redemptions shall not exceed $5,000,000 in the
aggregate; and
(d) payments by the Company under the Intra-Group Agreements, the
Backhaul Agreements, the Cable Station Agreements, or any other Project Document
to which a Related Party is a party, to the extent that such payments have been
budgeted in the then-applicable Project Budget or the then-applicable Operating
Budget.
SECTION 6.7. LIMITATIONS ON ISSUANCE OF INTERESTS
The Company shall not issue any additional Capital Stock of the
Company or any other interest in the Company, to any Person, except for
additional Capital Stock which is common stock and which is subject to the
perfected Lien of the Administrative Agent pursuant to the Shareholder Pledge
Agreement or such other documentation as shall be reasonably acceptable to the
Administrative Agent and which is delivered to the Administrative Agent,
together with undated stock powers for each stock certificate representing such
additional Capital Stock, executed in blank.
(b) The Company 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 Company and only if such additional Capital Stock is (i)
subject to the perfected Lien of the Administrative Agent as the case may be,
pursuant to the Company Security Agreements or such other documentation as shall
be reasonably acceptable to the Administrative Agent and (ii) delivered to the
Administrative Agent together with undated stock powers for each stock
certificate representing such additional Capital Stock, executed in blank.
SECTION 6.8. LIMITATIONS ON TRANSFERS OF INTERESTS
The Company shall not consent to the transfer (by assignment, sale or
otherwise) of any Capital Stock or any other equity interest of the Company, or
permit the transfer (by assignment, sale or otherwise) of any Capital Stock or
any other equity interest of any of its Subsidiaries, except:
(a) subject to the provisions of paragraph (n) of Article VII, a
transfer by the Sponsor of all the Capital Stock of the Company 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 Company
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 Administrative Agent shall have a perfected
First Priority security interest in all Capital Stock of the Company;
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(b) subject to the provisions of paragraph (n) of Article VII,
any transfer of the Capital Stock made subject to the Lien and the terms of the
Shareholder Pledge Agreement or any of the Company Security Agreements, as
applicable, pursuant to which such Capital Stock is pledged (including, without
limitation, the delivery by the transferee to the Administrative Agent as the
case may be, of an irrevocable proxy and power as contemplated by such
applicable agreement); and
(c) any transfer of Capital Stock in the Company which does not
cause a "Change in Control" to occur.
SECTION 6.9. PAYMENT OF CONSTRUCTION COSTS; OPERATING BUDGET
The Company 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 Project
(excluding Customer Upgrades) other than (x) during the period prior to the
Conversion Date, those costs set forth in the Project Budget (as amended from
time to time) and (y) thereafter, those costs set forth in the then applicable
Operating Budget.
(b) The Company 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 Company 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 4.3(f) or 5.24 in respect of such Operating Year, and
(ii) amend such Operating Budget in order to apply identified cost savings
(excluding any cost savings achieved through the sale of Capacity for non-Cash
consideration as permitted by Section 6.13) in a budget category (excluding any
contingency categories) 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 Operating Budget.
SECTION 6.10. AMENDMENT OF PROJECT DOCUMENTS; PROJECT SCOPE
The Company 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 Company or such Subsidiary is a party or with respect to
which the consent of the Company or such Subsidiary is required, other than:
(a) 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;
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(b) amendments, supplements or other modifications or waivers
with respect to, or consents under, the Construction Contract or the NACS
Construction Contract which (A) are made prior to the Conversion Date, PROVIDED
that the same are (i) entered into by the Company or Xxxxx 0, as applicable, in
the ordinary course of business and are on commercially reasonable terms, (ii)
provide for no additional amounts to be paid by the Company thereunder (or, if
additional amounts are required to be paid by the Company thereunder, such
additional amounts are provided for in the then current Project Budget or are
provided for from Permitted Sources), (iii) do not release the Contractor or the
NACS Contractor, as applicable, from any material liability thereunder unless
such release would be commercially reasonable, and (iv) could not reasonably be
expected to have a Material Adverse Effect or (B) are made on or after the
Conversion Date, PROVIDED that the same (i) are entered into by the Company or
Xxxxx 0, as applicable, in the ordinary course of business and are on
commercially reasonable terms, (ii) provide for no additional amounts to be paid
by the Company thereunder (or, if additional amounts are required to be paid by
the Company thereunder, such additional amounts are provided for in the then
current Operating Budget or are provided for from Permitted Sources), (iii) do
not otherwise increase the Company's liability thereunder, (iv) do not release
the Contractor or NACS Contractor, as applicable, from any liability thereunder
(unless such release would be commercially reasonable), (v) do not reduce the
duration or scope of any warranty or replacement period thereunder, (vi) do not
reduce the scope or availability of any Intellectual Property thereunder or
which is to be conveyed to the Company or Xxxxx 0 xxxxxxxxxx, (xxx) do not amend
the requirements for any Provisional Acceptance Date or, in the case of the NACS
Construction Contract, any Provisional System Acceptance (as defined therein)
without the prior written consent of the Independent Engineer, and (viii) could
not reasonably be expected to have a Material Adverse Effect;
(c) amendments, supplements or other modifications or waivers
with respect to, or consents under, any Project Document (other than any
Principal Project Document referred to in clause (a) or (b) above and other than
the Construction Contract Guaranty and the Performance Bonds) (i) which are
permitted by such Project Document without the consent of the Company or any
Subsidiary of the Company party thereto or (ii) which (A) are entered into by
the Company or any Subsidiary of the Company in the ordinary course of business
and are on commercially reasonable terms, (B) provide for no additional amounts
to be paid by the Company or any Subsidiary of the Company thereunder (or, if
additional amounts are required to be paid by the Company or any Subsidiary of
the Company thereunder, such additional amounts are provided for in the then
current Project Budget or Operating Budget or are provided for from Permitted
Sources), (C) do not release any party thereto (other than the Company or any
Subsidiary of the Company) from any material liability thereunder unless such
release would be commercially reasonable or unless the Company would otherwise
be permitted to terminate such agreement pursuant to Section 6.11 and (D) could
not reasonably be expected to have a Material Adverse Effect; PROVIDED, HOWEVER,
that no amendment, supplement or other modification with respect to a Project
Document, without the prior written consent (such consent not to be unreasonably
withheld) of the (A) Independent Engineer, shall provide for the addition or
removal of a city or cities from the Project and (B) Majority Lenders, shall
provide for (i) the addition of a city or
107
cities from the Project, unless such addition is (x) prior to the Conversion
Date and within the Project Budget or (y) such addition is financed with the use
of proceeds other than the Construction Funding Facilities or (ii) the removal
of a city or cities from the Project; and
(d) (i) immaterial amendments, supplements or other modifications
or immaterial waivers with respect to, or immaterial consents under, any Project
Document and (ii) amendments, supplements or other modifications to, or consents
or waivers under, any Project Document which are permitted by such Project
Document without the consent of the Company or any Subsidiary of the Company
party thereto.
SECTION 6.11. TERMINATION, ASSIGNMENT OF PROJECT DOCUMENTS
The Company 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 Company or any Subsidiary of the Company, (iii) as required
by Applicable Laws or (iv) a Project Document, other than the Construction
Contract or, after the Transfer Date (if applicable), the NACS Construction
Contract (prior to the end of the Warranty Period) and the Construction Contract
Guaranty (prior to the end of the Warranty Period), if (A) the Company delivers
to the Administrative Agent at the time of such termination, cancellation or
suspension a certificate of a Responsible Officer of the Company certifying that
(1) such termination, cancellation or suspension is permitted by the terms of
such Project Document, (2) the Company reasonably believes that such Project
Document (or its replacement) is no longer beneficial or useful to the Lenders
and to the Company's business and (3) such termination, cancellation or
suspension could not reasonably be expected to have a Material Adverse Effect
and (B) with respect to the termination, cancellation or suspension of the
Performance Bonds, 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 Company shall not agree or consent to or otherwise permit
the assignment of the obligations of any party to any Principal Project Document
(other than a party to a Capacity Purchase Agreement), except pursuant to the
Security Documents and except as permitted without the consent of the Company 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
Company shall not, and shall not permit any of its Subsidiaries to, enter into
any Additional Contract, other than (a) contracts entered into by the Company
(and/or any of its Subsidiaries) with an Affiliate thereof in connection with
the performance of any Project Activities, provided such contracts are
consistent with the terms of this Agreement, (b) contracts entered into by the
Company (and/or any of its Subsidiaries) in the ordinary course of business
(including the Transfer Agreement, the Cable Station Agreements and the Backhaul
Agreements) relating to performing Project Activities to the extent that (i)
they are entered into on commercially reasonable terms, (ii) amounts payable
108
thereunder are (x) provided for in the then current Project Budget or Operating
Budget, (y) from Capacity Commitments made by customers seeking capacity prior
to completion of the Project; PROVIDED, HOWEVER, that any acquisition of such
capacity shall be funded directly with proceeds received under related Capacity
Sales Agreements, or (z) from Permitted Sources, and (iii) the execution,
delivery and performance thereof could not reasonably be expected to have a
Material Adverse Effect, and (c) contracts entered into by the Company in order
to effectuate the provisions of Section 6.15, PROVIDED such contracts are
consistent with the terms of Section 6.15. At the time any Additional Contract
is entered into the Company 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 Company 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 Company shall not, and shall not permit any of its Subsidiaries
to, sell, lease or otherwise dispose of Capacity or capacity on other
telecommunication systems acquired in accordance with the terms hereof except
pursuant to agreements entered into by the Company on commercially reasonable
terms including, without limitation, the provisions set forth in EXHIBIT C (as
such provisions may be amended, supplemented, restated or otherwise modified
from time to time to the extent permitted under Section 6.10 hereof); PROVIDED
that, in any event (except for Level 3 Fiber Pair Agreement), (i) the relevant
agreement shall provide that all cash consideration payable thereunder
(excluding any amounts payable in connection with any Customer Upgrade but
including any Operating Payments or xxxx-ups paid therefore) shall be paid in
Dollars or, subject to the FX Conditions, euros or yen, to (x) the Pre-Sales
Proceeds Account (in the case of payments made prior to the Conversion Date) and
(y) to the Revenue Account (in the case of payments made on and after the
Conversion Date), (ii) if the relevant agreement shall provide for future
payments (x) it shall not prohibit the granting of a security interest in such
agreement by the Company to the Administra tive Agent for the benefit of the
Secured Parties and (y) it shall not be entered into with an Affiliate of the
Company or any other Person acting as an agent for the sale or marketing of
Capacity, (iii) if requested by the Administrative Agent, the Company shall
deliver a copy of any such relevant agreement, (iv) the relevant agreement may
provide for a cash rebate or return of cash previously paid to the Company by
such purchaser (y) on or after April 30, 2003, to the extent that such cash has
not previously been used to make payments in connection with the Project, or (z)
after the Conversion Date, 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 VAT Account and (v) the relevant agreement may provide for
the purchase by the Company of capacity on another system in accordance with
Section 6.5 (vii); PROVIDED, HOWEVER, that any acquisition of such capacity
shall be funded directly with proceeds received under such Capacity Sales
Agreements; PROVIDED, FURTHER, the Company shall not enter into any transaction
to dispose of Capacity for non-cash consideration except in accordance with
Section 6.20(c).
109
SECTION 6.14. ACCEPTANCE OF PROJECT
The Company shall not issue any Certificate of Provisional Acceptance
or Certificate of Commercial Acceptance without the prior written consent of the
Independent Engineer, such consent not to be unreasonably withheld.
SECTION 6.15. LEASES
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any lease or leases as a lessee 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 Project Budget or 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 Project
Budget or Operating Budget), (c) Capital Lease Obligations for the lease of
office equipment and automobiles in the ordinary course of business of the
Company, (d) Permitted Sale Leasebacks by the Company or its Subsidiaries and
(e) leases of capacity on other systems; PROVIDED, HOWEVER, that any acquisition
of such capacity shall be funded directly with proceeds received under related
Capacity Sales Agreements.
SECTION 6.16. CHANGE OF OFFICE
The Company shall not, and shall not permit any of its Subsidiaries
to, change the location of its chief executive office or principal place of
business or jurisdiction of organization or the office where it keeps its
records concerning the Project and all contracts related thereto from that
existing on the date hereof, unless the Company or such Subsidiary, as
applicable, shall have given the Administrative Agent at least thirty (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 6.17. CHANGE OF NAME
The Company shall not, and shall not permit any of its Subsidiaries
to, change its name unless the Company or such Subsidiary, as applicable, shall
have given the Administrative Agent at least thirty (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 6.18. TRANSACTIONS WITH AFFILIATES
The Company shall not, and shall not permit any of its Subsidiaries
to, enter into any agreement with any Affiliate of the Company except (a)
pursuant to any Contractual Obligation of the Company or a Subsidiary in
existence on the Closing Date and set forth on SCHEDULE 6.18,
110
(b) transactions in the ordinary course of business which are on fair and
reasonable terms not less favorable than the Company or such Subsidiary could
obtain in an arm's-length transaction with a Person which is not an Affiliate,
(c) transactions among the Company and its Subsidiaries or among such
Subsidiaries and (d) transactions contemplated by Section 6.4(g) hereto.
SECTION 6.19. SALE AND LEASEBACK
The Company 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 Company or a Subsidiary.
SECTION 6.20. CAPITAL EXPENDITURES; OTHER PURCHASES OF ASSETS
From and after the Conversion Date, the Company 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 are included in the Project Budget, (ii) which do not
cause the Company and its Subsidiaries to spend more than $6,000,000 in the
aggregate over any three Operating Year period in respect of such expenditures
or, to the extent such expenditure would cause the Company and its Subsidiaries
to spend more than $6,000,000 in the aggregate over any three Operating Year
period, which excess is funded solely from Permitted Sources or amounts on
deposit in the Capacity Upgrades Reserve Account, PROVIDED such amounts on
deposit are only used to pay for Capacity Upgrades, (iii) are paid for with
Capacity to the extent the transfer of such Capacity is in accordance with
Section 6.13 , (iv) are paid for from Customer Upgrade Amounts or (v) are
approved by the Majority Lenders in writing (after consultation with the
Independent Engineer).
(b) The Company 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 by the Company in connection with the completion of the
Project (including in connection with Capacity Upgrades), (ii) the purchase of
assets reasonably required in connection with the performance of Project
Activities, (iii) Permitted Investments and (iv) purchases of assets permitted
hereunder.
(c) The Company shall not, and shall not permit any of its
Subsidiaries to, enter into any transaction to expand the scope of the Project
unless it is after the Conversion Date, does not adversely affect the Project
and one of the following conditions is met: (i) any such expansion is paid for
out of the Company's Excess Cash Flow, (ii) the Company has received the written
consent of the Majority Lenders or (iii) any such expansion is paid for through
swaps of Capacity, PROVIDED (A) such swaps of Capacity are on commercially
reasonable terms, (B) such swaps of Capacity do not exceed, in the aggregate
from the Closing Date, 4% of all protected Capacity on the FNAL System, (C) such
acquired assets or rights to such assets, contractual or otherwise, are assigned
to the Administrative Agent as Collateral and (D) there shall not have
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occurred a Designated Event, a Default or an Event of Default; provided,
however, that for the purposes of the measurement of Cumulative Capacity Sales
Revenue such swaps shall not be included therein.
SECTION 6.21. UNRELATED ACTIVITIES; ABANDONMENT
The Company shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than Project Activities and Customer Upgrades.
The Company shall not abandon the diligent operation and maintenance of the
Project.
SECTION 6.22. SET-OFF
Without the prior written consent of the Administrative Agent, the
Company shall not exercise any right of set-off with respect to amounts owing to
it by the Contractor under the Construction Contract or the NACS Contractor (to
the extent that it has such right) under the NACS Construction Contract or
amounts owing under the Company Performance Bond or (to the extent that it has
such right) under the Level 3 Performance Bond.
SECTION 6.23. SUBSIDIARIES
The Company shall not, and shall not permit any of its Subsidiaries
to, create or otherwise acquire any Subsidiary unless the Company gives the
Administrative Agent notice thereof and unless:
(a) such Subsidiary is a newly created, wholly-owned direct
Subsidiary of the Company;
(b) such Subsidiary shall, if the Administrative Agent shall so
request, and provided it is permitted to do so pursuant to Applicable Laws,
execute and deliver (i) a counterpart to the Subsidiary Guarantee Agreement with
respect to all Obligations in form and substance reasonably satisfactory to the
Administrative Agent and/or (ii) a security agreement in substantially the form
of the Company Security Agreements, with such modifications as the
Administrative Agent may reasonably request or consent to;
(c) the Company shall pledge to the Administrative Agent 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;
(d) the Administrative Agent shall have received evidence
reasonably satisfactory to it that the Administrative Agent 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;
(e) 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 Company and its
112
Subsidiaries for any Operating Year will exceed a rate equivalent to 150% of the
tax rate assumed in the Project Budget or Operating Budget (as applicable) for
Taxes with respect to such Operating Year; provided, however, that in
calculating such aggregate tax liability, any transfer or similar taxes payable
by the Company or any of its Subsidiaries pursuant to any of the transactions
contemplated under Section 5.29 and 5.30 shall be excluded, provided further
that any such transfer or similar taxes could not, together with the other
aggregate tax liabilities of the Company and its Subsidiaries, be reasonably
expected to cause a Material Adverse Effect and in any event the Company and its
Subsidiaries shall not agree to bear any tax liability, whether in whole or in
part, of any License Affiliate in connection with such transactions; and
(f) 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 (b) through
(d) of the foregoing.
SECTION 6.24. CONCENTRATION OF CASH
The Company shall not permit the aggregate balance in all bank
accounts, checking accounts or similar accounts maintained by the Company and
any of its Subsidiaries (including the value of all Permitted Investments
contained therein) to exceed an amount equal to $5,000,000 (exclusive of the
Level 3 Proceeds Account, the Customer Upgrade Account and all amounts and the
value of Permitted Investments maintained in the Accounts and exclusive of any
amounts distributed pursuant to Article VIII to the Company or its Subsidiaries
for the benefit of other Persons) except that the Company may establish and
maintain an account with a financial institution other than the Administrative
Agent (the "DISTRIBUTION ACCOUNT") into which funds may be deposited in
accordance with Section 8.19(c). Amounts on deposit in any account (other than
the Accounts, the Distribution Account and the Customer Upgrade Account) shall
be used solely to pay costs in accordance with the then current Project Budget
or Operating Budget.
SECTION 6.25. AMENDMENTS OF ORGANIZATIONAL DOCUMENTS
The Company shall not, and shall not permit any of its Subsidiaries
to, amend, supplement or otherwise modify, or permit the amendment, modification
or supplementation of any Organizational Documents 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 6.26. IMMUNITY
The Company 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 Project,
immunity from suit, execution, attachment or other legal process.
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SECTION 6.27. RESTRICTIVE AGREEMENTS
The Company 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 Company 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 the Financing
Documents.
SECTION 6.28. CUMULATIVE CAPACITY SALES REVENUE
The Company shall not permit the Cumulative Capacity Sales Revenue,
including proceeds from the sales of fiber pairs in the Project, for the period
from the last day of the end of the calendar quarter falling after the fiscal
quarter in which the Conversion Date occurs through and including the last day
of each fiscal quarter set forth below, to be less than the correlative amount
indicated opposite the quarterly date:
FISCAL QUARTER AFTER THE FISCAL CUMULATIVE CAPACITY
QUARTER OF CONVERSION DATE SALES REVENUE
First Quarter $102,000,000
Second Quarter $141,000,000
Third Quarter $183,000,000
Fourth Quarter $226,000,000
Fifth Quarter $269,000,000
Sixth Quarter $312,000,000
Seventh Quarter $356,000,000
Eighth Quarter $401,000,000
Ninth Quarter $449,000,000
Tenth Quarter $498,000,000
Eleventh Quarter $536,000,000
Twelfth Quarter $575,000,000
Thirteenth Quarter $613,000,000
Fourteenth Quarter $652,000,000
Fifteenth Quarter $685,000,000
Sixteenth Quarter $718,000,000
Seventeenth Quarter $750,000,000
Eighteenth Quarter $780,000,000
Nineteenth Quarter $815,000,000
Twentieth Quarter $852,000,000
Twenty-first Quarter $889,000,000
Twenty-second Quarter $929,000,000
Notwithstanding anything to the contrary contained in this Agreement, the
failure to comply with this Section at any time shall not constitute a Default
or an Event of Default, but shall result in, until such time as the Company
shall have delivered a certificate to the Administrative Agent in
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accordance with Section 5.3(b) demonstrating the Company's compliance with this
Section and Sections 6.29 and 6.30, Excess Cash Flow being applied 100% to the
Administrative Agent for the account of the Lenders in accordance with Section
8.11(b); PROVIDED, HOWEVER, that such application to Term Loans shall be in
inverse order of maturity.
SECTION 6.29. PRESENT VALUE COVERAGE RATIO
The Company shall not permit, as of the end of any calendar quarter
falling after the fiscal quarter in which the Conversion Date occurs, the
Present Value Coverage Ratio to be less than 1.33:1.00. Notwithstanding anything
to the contrary contained in this Agreement, the failure to comply with this
Section at any time shall not constitute a Default or an Event of Default, but
shall result in, until such time as the Company shall have delivered a
certificate to the Administrative Agent in accordance with Section 5.3(b)
demonstrating the Company's compliance with this Section and Sections 6.29 and
6.31, Excess Cash Flow being applied 100% to the Administrative Agent for the
account of the Lenders in accordance with Section 8.11(b) PROVIDED, HOWEVER,
that such application to Term Loans shall be in inverse order of maturity.
SECTION 6.30. INTEREST COVERAGE RATIO
The Company shall not permit, as of the end of any fiscal quarter
falling after the fiscal quarter in which the Conversion Date occurs, the
Interest Coverage Ratio to be less than the correlative ratio indicated:
FISCAL QUARTER AFTER THE FISCAL INTEREST COVERAGE
QUARTER OF CONVERSION DATE RATIO
First Quarter 2.50:1.00
Second Quarter 3.00:1.00
Third Quarter 4.00:1.00
Fourth Quarter 4.25:1.00
Fifth Quarter 4.75:1.00
Sixth Quarter 5.00:1.00
Seventh Quarter 5.50:1.00
Eighth Quarter 6.00:1.00
Ninth Quarter 6.75:1.00
Tenth Quarter 7.50:1.00
Eleventh Quarter 8.25:1.00
Twelfth Quarter 8.75:1.00
Thirteenth Quarter 9.00:1.00
Fourteenth Quarter 9.00:1.00
Fifteenth Quarter 9.00:1.00
Sixteenth Quarter 9.00:1.00
Seventeenth Quarter 9.00:1.00
Eighteenth Quarter 9.00:1.00
Nineteenth Quarter 9.00:1.00
000
Xxxxxxxxx Xxxxxxx 9.00:1.00
Twenty-first Quarter 9.00:1.00
Twenty-second Quarter 9.00:1.00
Notwithstanding anything to the contrary contained in this Agreement, the
failure to comply with this Section at any time shall not constitute a Default
or an Event of Default, but shall result in, until such time as the Company
shall have delivered a certificate to the Administrative Agent in accordance
with Section 5.3(b) demonstrating the Company's compliance with this Section and
Sections 6.29 and 6.30, Excess Cash Flow being applied 100% to the
Administrative Agent for the account of the Lenders in accordance with Section
8.11(b) PROVIDED, HOWEVER, that such application to Term Loans shall be in
inverse order of maturity.
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 Company shall fail to pay any principal of any Loan when
due; or the Company or any Subsidiary of the Company shall fail to pay any
interest on any Loan or fee or other amount payable hereunder or under any other
Financing Document within three (3) Business Days after any such other amount
becomes due in accordance with the terms hereof or thereof; or
(b) the Company shall fail to perform or observe any of its
covenants set forth in Section 5.9(a) and Article VI (other than Sections 6.28,
6.29 and 6.30); or the Company shall fail to perform or observe any of its
covenants set forth in Sections 5.1(a) and the second sentence of Section 5.1 of
the Company Security Agreement (US)), or the Shareholder shall fail to perform
or observe any of its covenants set forth in the first sentence of Section 5(a)
or Section 5(b) of the Shareholder Pledge Agreement; or any of the insurance
required to be maintained in accordance with Section 5.10 shall fail to be
maintained in effect; or
(c) the Company, any Subsidiary of the Company, any License
Affiliate or the 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 5.29, 5.30, 6.28, 6.29 and 6.30) and such
failure shall continue unremedied or unwaived for a period of thirty (30) days
after receiving written notice thereof; or
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(d) any representation or warranty made or deemed made by the
Company, any Subsidiary of the Company, any License Affiliate or the 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, administration (whether
judicial, or otherwise) winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, administrator (whether judicial or otherwise)
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 sixty (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 sixty (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 Alcatel or the Contractor shall
not constitute a Default or an Event of Default under this paragraph unless such
proceeding, action or event could reasonably be expected to have a Material
Adverse Effect; or
(f) one or more judgments or decrees shall be entered (i) against
the Company or any Subsidiary of the Company involving in the aggregate a
liability (to the extent not 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
sixty (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 Company to have such injunction or similar
form of relief stayed or discharged within sixty (60) days; or
(g) (i) any Financing Document shall cease, for any reason, to be
in full force and effect or the Company or any other party thereto (other than a
Lender or an Agent) shall so assert
117
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 Company shall not be subject to the
Shareholder Pledge Agreement in favor of the Administrative Agent; or
(h) prior to the end of the Warranty Period, the Construction
Contract Guaranty or any analogous or similar guaranty delivered under or
pursuant to Backhaul Agreements or Cable Station Agreements shall cease, for any
reason, to be in full force and effect, or Alcatel (or a contractor or other
counterparty to any Backhaul Agreement or Cable Station Agreement) shall so
assert in writing and such assertion shall not be withdrawn, revoked or remedied
within thirty (30) days thereof; PROVIDED, HOWEVER, that in the case of such
analogous or similar guaranty, no such default shall occur unless a Material
Adverse Effect shall have arisen as a result of such cessation; or
(i) at any time prior to the last day of the Warranty Period, the
invalidity, termination, dishonor or revocation of either Performance Bond
(except termination as a result of a final drawing thereunder); or the failure
at any time of the Performance Bonds to be in a stated amount equal to (i) at
any time prior to the Provisional Acceptance Date (Final Phase), at least 10% of
the Total Contract Price, or (ii) at any time on or after the Provisional
Acceptance Date (Final Phase) until the last day of the Warranty Period, at
least 5% of the Total Contract Price; or
(j) any Project Document (except the Transfer Agreement, the
Cable Station Agreements (excluding the Cable Station Construction Agreements),
the Backhaul Agreements which provide for aggregate payments of less than
$10,000,000 during any three year period and, prior to the Transfer Date, the
NACS Construction Contract and Xxxxx 0 Xxxxxxxxxxx Xxxx) 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 (except the Transfer Agreement, the Cable Station Agreements (excluding
the Cable Station Construction Agreements), the Backhaul Agreements which
provide for aggregate payments of less than $10,000,000 during any three year
period and, prior to the Transfer Date, the NACS Construction Contract and Level
3 Performance Bond) shall be declared to be null 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 (i) if it relates to a
Capacity Sales Agreement (other than a Capacity Sales Agreement with the
Sponsor) or an Additional Contract or (ii) if it relates to any other Principal
Project Document (other than prior to the end of the Warranty Period, the
Construction Contract and the Construction Contract Guaranty) if the Company
shall obtain a replacement agreement or arrangement reasonably satisfactory in
form and substance to the Majority Lenders (or, with respect to the Performance
Bonds, to the Administrative Agent) with a Person satisfactory to the Majority
Lenders (or, with respect to the Performance Bonds, to the Administrative Agent)
within one hundred twenty (120)
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days after such invalidity, contest, denial or declaration shall have occurred
or (iii) if such occurrence could not reasonably be expected to have a Material
Adverse Effect; or
(k) any party to any Project Document (except the Transfer
Agreement, the Cable Station Agreements (excluding the Cable Station
Construction Agreements), the Backhaul Agreements which provide for aggregate
payments of less than $10,000,000 during any three year period and, prior to the
Transfer Date, the NACS Construction Contract and Level 3 Performance Bond)
shall be in material default thereunder and such default shall continue
unremedied for thirty (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 or an Additional Contract, (ii) the Construction
Contract, if the Construction Contract Guaranty remains in full force and effect
and Alcatel is actually performing its obligations thereunder in a timely
fashion, (iii) any other Principal Project Document (other than those referred
to in clauses (i) and (ii) above and other than the Construction Contract
Guaranty) if the Company shall obtain a replacement agreement or arrangement
reasonably satisfactory in form and substance to the Majority Lenders (or, with
respect to the Performance Bonds, to the Administrative Agent) with a Person
satisfactory to the Majority Lenders (or, with respect to the Performance Bonds,
to the Administrative Agent) within one hundred twenty (120) days after such
event shall have occurred or (iv) any Project Document other than a Principal
Project Document if such event could not reasonably be expected to have a
Material Adverse Effect; PROVIDED, further, that, with respect to the Transfer
Agreement, the Cable Station Agreements (excluding the Cable Station
Construction Agreements), the Backhaul Agreements which provide for aggregate
payments of less than $10,000,000 during any three year period and, prior to the
Transfer Date, the NACS Construction Contract and Level 3 Performance Bond, such
occurrence shall constitute an Event of Default only to the extent it could
reasonably be expected to have a Material Adverse Effect; or
(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 ninety (90) 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 three (3) months or the Company 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
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being repaired, replaced or restored in accordance with Section 5.20, the
Company shall have failed to deliver to the Administrative Agent an EOL
Compliance Certificate in accordance with the terms of Section 5.20 (or the
Present Value Coverage Ratio set forth in the EOL Compliance Certificate so
delivered to the Administrative Agent shall be less than 1.20:1.00) or (B) if
the affected portion of the Project is being repaired, replaced or restored in
accordance with Section 5.20, the Company shall have failed to comply with the
provisions of such Section within the time period specified therein; or
(p) the Company shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness within any applicable grace period, when and as the same shall
become due and payable; or
(q) any event or condition occurs that results in any Material
Indebtedness of the 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 any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or
requires the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; or
(r) the invalidity, termination or revocation of the Bye-Laws of
the Company 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; or
(s) if:
(i) the Conversion Date shall not occur on or before January
31, 2003; or
(ii) the Company fails to achieve an applicable Acceptance
prior to the Required Applicable Acceptance Date;
THEN, and in every such event (other than an event with respect to the Company
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 Company, take either or all of the
following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately and (ii)
(A) declare the Loans then out standing 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 (B) all fees and other obligations of the Company 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 Company; and
in case of any event with respect to the Company described in clause (e) of this
Article, the Commitments shall automatically terminate and the principal of the
Loans then outstanding, together with accrued
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interest thereon and all fees and other obligations of the Company accrued
hereunder, shall automatically become due and payable, without present ment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Company.
ARTICLE VIII
ACCOUNTS
SECTION 8.1. CREATION OF ACCOUNTS
The Administrative Agent hereby establishes the following 14 special,
segregated and irrevocable cash collateral accounts in the name of the
Administrative Agent and for the benefit of the Secured Parties, which accounts
shall be maintained by the Administrative Agent at all times until the
termination hereof and the payment in full of all Obligations:
(1) Construction Account;
(2) Pre-Sale Proceeds Account;
(3) Debt Proceeds Account;
(4) Revenue Account;
(5) Operating Reserve Account;
(6) Debt Reserve Account;
(7) Current Account;
(8) Capacity Upgrades Reserve Account;
(9) Insurance Proceeds Account;
(10) Special Payment Account;
(11) Sales and Issuances Proceeds Account;
(12) Excess Revenue Account;
(13) Permitted Sources Account; and
(14) VAT 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
Administrative Agent and shall constitute collateral in accordance with the
terms of the Security Documents to be held in the custody of the Administrative
Agent 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. The Company shall deposit into the
Construction Account the amounts required to be deposited pursuant to this
Article VIII.
(b) PRE-SALE PROCEEDS ACCOUNT. The Company shall deposit into the
Pre-Sale
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Proceeds Account all Project Revenues (and reduce Construction Loan Commitments
in accordance with Section 2.6).
(c) DEBT PROCEEDS ACCOUNT. The Company shall deposit into the
Debt Proceeds Account all Borrowings pursuant to Section 2.4.
(d) REVENUE ACCOUNT. Subject to Sections 8.2(a) and 8.2(b), the
Company shall deposit into the Revenue Account all Project Revenues of the
Company and its Subsidiaries received after the Conversion Date.
(e) OPERATING RESERVE ACCOUNT. On the Conversion Date, the
Administrative Agent, acting in accordance with Section 8.8, shall deposit into
the Operating Reserve Account (to the extent that cash is available for such
purpose) the amount set forth in the Schedule of Sources and Uses to be
deposited into the Operating Reserve Account, PROVIDED such amount shall in no
event exceed the Operating Reserve Maximum Balance. The Administrative Agent
shall deposit amounts into the Operating Reserve Account from amounts on deposit
in the Pre-Sale Proceeds Account as specified in Section 8.8 and from amounts on
deposit in the Revenue Account as specified in Section 8.11(b).
(f) DEBT RESERVE ACCOUNT. The Administrative Agent, acting in
accordance with Section 8.8, shall on the Conversion Date deposit into the Debt
Reserve Account (to the extent that cash is available for such purpose) the Debt
Reserve Required Balance and thereafter the Administrative Agent shall deposit
amounts into the Debt Reserve Account from amounts on deposit in the Revenue
Account as specified in Section 8.11(b).
(g) CURRENT ACCOUNT. The Administrative Agent shall deposit into
the Current Account (i) Additional Borrowing Amounts pursuant to Section
4.2(b)(ii) and (ii) amounts on deposit in the Revenue Account as specified in
Section 8.11(a).
(h) VAT ACCOUNT. The Administrative Agent shall deposit amounts
into the VAT Account from amounts on deposit in the Revenue Account as specified
in Section 8.11(a)(i) and from amounts on deposit in the Pre-Sale Proceeds
Account as specified in Section 8.8(a).
(i) INSURANCE PROCEEDS ACCOUNT. The Company, its Subsidiaries and
the Administrative Agent shall deposit into the Insurance Proceeds Account all
Casualty Proceeds.
(j) SPECIAL PAYMENT ACCOUNT. The Company, its Subsidiaries and
the Administrative Agent shall deposit into the Special Payment Account all
Special Payments.
(k) SALES AND ISSUANCES PROCEEDS ACCOUNT. The Company and its
Subsidiaries shall deposit into the Sales and Issuances Proceeds Account all Net
Cash Proceeds received (except to the extent otherwise required pursuant to this
Agreement).
(l) EXCESS REVENUE ACCOUNT. The Company and its Subsidiaries
shall deposit
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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
8.11(b) or Section 8.19(a), as applicable.
(m) PERMITTED SOURCES ACCOUNT. The Company shall deposit amounts
into the Permitted Sources Account with funds contemplated by clauses (b) and
(c) of the definition of "Permitted Sources" to the extent necessary to cause
such funds to constitute a "Permitted Source."
(n) CAPACITY UPGRADES RESERVE ACCOUNT. The Administrative Agent
shall deposit amounts into the Capacity Upgrades Reserve Account from amounts on
deposit in the Pre-Sale Proceeds Account and Revenue Account as specified in
Section 8.8(b) or 8.11(b).
SECTION 8.3. DEPOSITS HELD AS CASH COLLATERAL
The Administrative Agent agrees to accept all revenues, cash,
payments, insurance and casualty proceeds, other amounts and Permitted
Investments to be delivered to or held by the Administrative Agent pursuant to
the terms hereof or of the Security Documents. The Administrative Agent 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 hereof 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 Company to
the Administrative Agent as collateral securing the Obligations in accordance
with the provisions hereof and of the Security Documents.
(b) All moneys, cash equivalents, instruments, investments and
securities at any time on deposit in the Accounts shall constitute security for
the payment and performance by the Company of the Obligations and shall at all
times be subject to the sole dominion and control of the Administrative Agent
and shall be held in the custody of the Administrative Agent in trust for the
purposes of, and on the terms set forth in, this Agreement.
(c) Neither the Company, any Subsidiary of the Company nor the
Sponsor 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
The Company shall use reasonable efforts to ensure that all amounts
delivered to the Administrative Agent 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 Administrative Agent 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 Administrative Agent
shall notify the Company and hold such amounts in the Revenue Account (and shall
not be
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applied in accordance with Section 8.11) pending instructions from the
Company which shall be approved by the Administrative Agent in its reasonable
discretion as to how to apply such amounts.
(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 Administrative Agent and applied solely as provided in this Article VIII.
SECTION 8.5. BOOKS OF ACCOUNT; STATEMENTS
The Administrative Agent 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 Administrative Agent
pursuant to Section 8.26 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 Administrative Agent at its
principal office located at 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, and shall not, without the prior written consent of the Administrative
Agent, be moved to any different location.
SECTION 8.7. RECEIPT BY THE COMPANY
The Company 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 Company's endorsement if necessary) to the Administrative Agent for
deposit into the applicable Account not later than the first Business Day after
the Company's receipt. Until so deposited, all such amounts shall be held in
trust by the Company for the Administrative Agent and the other Secured Parties
as additional collateral security for the Obligations and such amounts shall not
be commingled with any other funds or property of the Company.
SECTION 8.8. PRE-SALE PROCEEDS ACCOUNT
Prior to the Conversion Date the Administrative Agent shall
distribute the cash available in the Pre-Sale Proceeds Account in the following
order of priority:
FIRST, the Administrative Agent shall distribute, without
duplication of amounts distributed to the Company to repay the
Sponsor/Shareholder under Section 8.9(a), Advance Pre-Sales Equity to
the Company up to an aggregate amount equal to (x) the Level 3 Proceeds
actually paid by Xxxxx 0 and received by the Contractor, the NACS
Contractor or other Persons to whom Level 3 Proceeds are payable
pursuant to the Development Agreement and/or the Level 3 Fiber Pair
Agreement since the initial Borrowing Date and as of the relevant date
of determination, as certified by a Responsible
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Officer of the Company, LESS (y) any amounts previously distributed to
the Company pursuant to this Section 8.8(a) "first"; PROVIDED, HOWEVER,
that the aggregate amount distributable for repayment to the Spon
sor/Shareholder pursuant to this Section 8.8(a) "first" and Section
8.9(a) shall in no event exceed the Advance Pre-Sales Equity;
SECOND, the Administrative Agent shall on each Borrowing Date and
on each other date on which funds are required to be transferred to the
Construction Account in accordance with the terms of Section 8.9,
distribute, from the cash available in the Pre-Sale Proceeds Account,
the amounts specified in the Borrowing Notice in respect of a
Construction Loan or a certificate delivered in accordance with Section
8.9(a) to the Construction Account or the VAT Account, as applicable;
and
THIRD, semiannually on the last Business Day of December and June
each year, to the repayment of Construction Loans in accordance with
Section 8.9(b).
Notwithstanding the foregoing, to the extent the Company has received Cumulative
Capacity Sales Revenue PLUS Operating Payments in an aggregate amount of not
less than $55,000,000, provided there is no Default or Event of Default, the
Company may use the subsequent $15,000,000 above $55,000,000 of Cumulative
Capacity Sales Revenue received solely for the repayment to the
Sponsor/Shareholder of the OpEx Equity; PROVIDED the reimbursement can take
place once the Company has received Cumulative Capacity Sales Revenue PLUS
Operating Payments in an aggregate amount of not less than $70,000,000 and
notwithstanding any other provision of this Agreement requiring payment of such
$15,000,000 to the Construction Account.
(b) On the Conversion Date, the Administrative Agent shall
distribute the cash available in the Pre-Sale Proceeds Account in the
following order of priority:
FIRST, to the Construction Account, the Residual Project Costs;
SECOND, to the Debt Reserve Account in an amount sufficient to
cause the amounts on deposit therein to equal to the Debt Reserve
Required Balance;
THIRD, in a priority to be determined by the Company in its sole
discretion,
(i) to the Capacity Upgrades Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Capacity Upgrades Reserve Required Balance as of such date (as set
forth in a certificate of the Company delivered pursuant to Section
5.3(c) or, if the Company shall have not delivered such a certificate
to the Administrative Agent, as set forth by the Administrative Agent
in its reasonable discretion); and/or
(ii) to the Operating Reserve Account, an amount sufficient
to cause the amounts on deposit therein to equal the Operating Reserve
Minimum Balance or, at the election of the Company, up to an amount
sufficient to cause the amounts on deposit therein to equal the
Operating Reserve Maximum Balance; and
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FOURTH, to the repayment of Construction Loans in accordance with
Section 8.9(b).
SECTION 8.9. CONSTRUCTION ACCOUNT
The Administrative Agent shall, upon receipt by it of a final
Borrowing Notice in respect of a Construction Loan with attached payment
instructions or a certificate of the Company setting forth the Project Costs due
and payable and to be paid from the Construction Account, distribute, from the
cash available in the Construction Account, to the Company for the benefit of
the Persons entitled thereto, all amounts then due and owing as set forth in
such final Borrowing Notice or certificate. Such costs may include repayment to
the Spon sor/Shareholder, without duplication of amounts distributed to the
Company under Section 8.8(a)"first", of Advance Pre-Sales Equity in an aggregate
amount not to exceed at any time an amount equal to (x) the aggregate Level 3
Proceeds actually paid by Xxxxx 0 and received by the Contractor, the NACS
Contractor or other Persons to whom Level 3 Proceeds are payable pursuant to the
Development Agreement and/or the Level 3 Fiber Pair Agreement since the initial
Borrowing Date and as of the relevant date of determination, as certified by a
Responsible Officer of the Company LESS (y) any amounts previously distributed
to the Company pursuant to Section 8.8(a)"first", the Administrative Agent shall
transfer the requisite funds into the Construction Account from the following
sources (in the indicated priority):
FIRST, from the Pre-Sale Proceeds Account, all funds on deposit
therein (or such lesser amount as may be required to cover such costs);
and
SECOND, to the extent such costs are not fully covered by the
amounts transferred from the Pre-Sale Proceeds Account, at the option
of the Company stated in such Borrowing Notice or certificate, from the
Debt Proceeds Account, all funds on deposit therein (or such lesser
amount as may be required to cover such costs).
(b) On the Conversion Date, all funds remaining on deposit in the
Debt Proceeds Account shall be distributed to the Construction Account and the
Administrative Agent shall, upon receipt by it of a certificate of the Company
stating the amount of Residual Project Costs and stating that all costs to be
paid from the Construction Account (other than Residual project Costs) have been
paid or are no longer payable, distribute all amounts in the Construction
Account, in an excess of an amount equal to the Residual Project Costs, in the
following order of priority:
FIRST, to be applied first to the payment of all accrued but
unpaid interest on the Construction Loans, and second to the prepayment
of the unpaid principal of the outstanding Construction Loans;
SECOND, to be applied to the payment of all other Obligations; and
THIRD, the remaining balance, if any, shall be transferred to the
Revenue Account.
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SECTION 8.10. DEBT PROCEEDS ACCOUNT
Subject to the Company's election pursuant to Section 8.9(a), third,
the Administrative Agent shall upon receipt in the Debt Proceeds Account of the
proceeds of Loans distribute such proceeds to the Construction Account.
SECTION 8.11. REVENUE ACCOUNT
After the Conversion Date:
(a) OPERATING EXPENSES AND CAPITAL EXPENDITURES; 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 Company shall deliver to the
Administrative Agent an Expense Certificate in the form of EXHIBIT J
requesting (x) distributions to pay Operating Expenses and permitted
capital expenditures (other than with respect to Capacity Upgrades)
from the Revenue Account, the amounts of which distributions shall,
unless consented to in writing by the Majority Lenders, conform to the
then current Operating Budget of the Company (as modified pursuant to
Section 6.9) and (y) distributions to pay income taxes from the Revenue
Account. On the last 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 Administrative Agent 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 value added tax, sales tax or other similar tax or potential
rebate or other similar return (to the extent permitted hereunder),
that portion of such Project Revenues directly to the VAT Account and
SECOND, (A) to the Persons entitled thereto, all Operating Expenses and
permitted capital expenditures (other than with respect to Capacity
Upgrades) or income taxes of the Company or any Subsidiary then due and
owing in item (1) of such Expense Certificate, and (B) to the Current
Account, the amounts identified as Operating Expenses and permitted
capital expenditures (other than with respect to Capacity Upgrades) or
income taxes of the Company or any Subsidiary expected to be due and
owing prior to the next Operating Expense Transfer Date in item (2) of
such Expense Certificate.
(ii) The Company shall be permitted to deliver a
certificate to 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
Administrative Agent shall distribute from the cash available in the
Revenue Account the amount of such fees, interest or other obligations
directly to the Persons entitled thereto.
(b) QUARTERLY TRANSFERS. On each Principal Payment Date, the
Administrative Agent 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, for the account of the Term Loan Lenders, the amount, if
any, equal to the scheduled principal payments with respect to the Term
Loans set forth in SCHEDULE 1.1(iii) and all accrued and unpaid
interest thereon which the Administrative Agent certifies to the
Company to be due and payable on such date;
SECOND, to the Operating Reserve Account, an amount sufficient to
cause the amounts on deposit therein to equal the Operating Reserve
Minimum Balance;
THIRD, upon the written notice of the Company, to the Operating
Reserve Account, the 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 Company
delivered pursuant to Section 5.3(c) or, if the Company shall not have
delivered such a certificate to the Administrative Agent, as set forth
by the Administra tive Agent in its reasonable discretion);
FIFTH, to the Capacity Upgrades Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Capacity Upgrades Reserve Required Balance as of such date (as set
forth in a certificate of the Company delivered pursuant to Section
5.3(c) or, if the Company shall have not delivered such a certificate
to the Administrative Agent, as set forth by the Administrative Agent
in its reasonable discretion);
SIXTH, to the Administrative Agent, for the account of the Term
Loan Lenders, an amount equal to 75% of the remaining cash available in
the Revenue Account (which amount shall be (i) increased to 100% of the
remaining cash available in the Revenue Account during the continuance
of a Designated Event or an Event of Default, or (ii) reduced to 50% of
the remaining cash available in the Revenue Account in the event that
the aggregate amount of Term Loans outstanding as of the determination
date is not greater than $150,000,000), to be applied to the prepayment
of the Term Loans; and
SEVENTH, 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 Company may direct and which do
not violate the terms hereof and of the other Financing Documents.
SECTION 8.12. DEBT RESERVE ACCOUNT
On and from the Conversion Date if, as of any date on which the
payment of interest on or principal of the Loans becomes due and payable as
certified by the Company to 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 8.11 and 8.19, the
Administrative Agent is authorised to, and shall, transfer from the
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Debt Reserve Account, for the benefit of the Lenders an amount (to the extent
cash is available in the Debt Reserve Account) to remedy any such insufficiency.
Upon the occurrence and during the continuance of a Default or an Event of
Default, funds in the Debt Reserve Account may be utilized to pay interest on
and principal of the Loans.
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 Administrative Agent
shall transfer to the Person(s) entitled thereto in accordance with Section
8.11(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. Upon the occurrence and during the continuance of a Default or
an Event of Default, funds in the Operating Reserve Account may be utilized to
pay interest on and principal of the Loans.
(b) On any Operating Expense Transfer Date, the Administrative
Agent shall transfer, upon the written request of the Company, any amount on
deposit in the Operating Reserve Account to the Revenue Account for the payment
of Operating Expenses or to pay interest on and principal of the Loans.
SECTION 8.14. CURRENT ACCOUNT
Prior to the Conversion Date, the Additional Borrowing Amounts shall
be deposited into the Current Account. The Administrative Agent shall pay, from
and to the extent of cash available in the Current Account and as set forth in a
certificate of the Company delivered to the Administrative Agent, to the Company
for the benefit of the Persons entitled thereto, amounts requested by the
Company for the payment of Project Costs.
(b) The Administrative Agent shall pay, from and to the extent of
cash available in the Current Account and as set forth in a certificate of the
Company delivered to the Administrative Agent, directly to the Company for the
benefit of the Persons entitled thereto, all other Operating Expenses previously
identified in the most recently delivered Expense Certificate which are then due
and owing.
SECTION 8.15. INSURANCE PROCEEDS ACCOUNT
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 Company as provided in paragraph (c) of this Section, or used by the
Administrative Agent as provided in paragraph (d) of this Section, or returned
to the Company as provided in Section 8.32.
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(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
Company 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
Administrative Agent of a certificate of the Company (i) 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 (ii)
stating the specific amount requested to be paid over to or upon the order of
the Company (or such other Person) or that such amount is requested to reimburse
the Company, 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
remaining in the Insurance Proceeds Account for such purpose and other funds of
the Company 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 Administrative Agent shall apply such
Casualty Proceeds Deposits to the payment of the Obligations in accordance with
Section 2.9(d).
(d) If the Company shall at any time notify the Administrative
Agent that an Event of Loss has occurred, then, unless the affected portion of
the Project is being repaired, replaced, restored or re-built in accordance with
Section 5.20(b), the Administrative Agent 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 relating thereto from the Insurance Proceeds Account and apply
them to the payment of the Obligations in accordance with Section 2.9(d). If the
Project is being repaired, replaced or restored or re-built in accordance with
Section 5.20(b), the provisions of paragraph (c) above shall apply.
SECTION 8.16. SPECIAL PAYMENT ACCOUNT
All Special Payments deposited in the Special Payment Account shall,
except to the extent otherwise provided pursuant to Sections 2.9(f) and 5.20(b),
be applied by the Administrative Agent for the prepayment of principal of the
Loans, together with accrued interest thereon in accordance with the provisions
of Section 2.9(i).
SECTION 8.17. VAT ACCOUNT
Upon the delivery by the Company of a certificate to the
Administrative Agent that amounts previously distributed into the VAT Account in
respect of payments of capacity, a potential rebate or other amounts payable to
relevant government authorities in respect of value added taxes, sales taxes or
other similar taxes are now due and payable, the Administrative Agent shall
distribute, from the cash available in the VAT Account, directly to the Company
for the benefit of the Persons entitled thereto, all such amounts then due and
owing as identified in such certificate.
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(b) Upon the delivery by the Company of a certificate to the
Administrative Agent that amounts previously distributed into the VAT Account in
respect of a potential rebate cease to be subject to such rebate, the
Administrative Agent shall distribute, from the cash available in the VAT
Account, such amounts to the Revenue Account.
SECTION 8.18. 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 Company or a Subsidiary of the
Company, 50% shall be distributed 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% shall be distributed
to the Company to be used in such manner (including equity dividends or
distribution to the Distribution Account) as the Company shall determine in
accordance with the terms hereof;
(b) if such amounts are Net Cash Proceeds in respect of any sale,
transfer or other disposition of any asset of the Company or any Subsidiary
thereof as set forth in Section 2.9(c)(iii), (i) an amount equal to the portion
thereof being held to be used to replace such asset disposed of with a similar
asset of at least substantially the same value, utility and useful life (which
shall be specified in a certificate of the Company delivered to the
Administrative Agent when such Net Cash Proceeds are deposited) shall be held in
the Sales and Issuance Proceeds Account and applied to the payment of the
relevant expenses upon receipt by the Administrative Agent of a certificate of
the Company 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 Section 2.9(c)(iii); and
(c) if such amounts are Net Cash Proceeds of a Permitted Sale
Leaseback Transaction, such amount shall be applied to the prepayment of the
Loans in accordance with Section 2.9(e).
SECTION 8.19. EXCESS REVENUE ACCOUNT
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 Administrative Agent shall transfer to the Person(s) entitled
thereto in accordance with Section 8.11(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.
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(b) If, as of any date on which the payment of interest on or
principal of the Loans becomes due and payable as certified by the Company to
the Administrative Agent, the cash available in the Revenue Account is
insufficient to make such payment obligations on such date in accordance with
Section 8.11, the Administrative Agent shall transfer to the Lenders an amount
(to the extent cash is available in the Excess Revenue Account) to remedy any
such insufficiency.
(c) Within forty five (45) days after the end of each Operating
Year of the Company, the Company shall be permitted to request the
Administrative Agent to distribute any or all amounts available in the Excess
Revenue Account to the Distribution Account. Upon such request, the
Administrative Agent shall distribute such amount from the cash available in the
Excess Revenue Account to the Distribution Account. Notwithstanding anything to
the contrary in this Section 8.19, upon the occurrence and during the
Continuance of a Default or an Event of Default, funds in the Excess Revenue
Account may be utilized to pay interest on and principal of the Loans.
SECTION 8.20. PERMITTED SOURCES ACCOUNT
Amounts on deposit in the Permitted Sources Account shall be paid
over to or upon the order of the Company to pay costs in respect of which such
Permitted Sources were deposited, upon the receipt by the Administrative Agent
of a certificate of the Company stating the specific amount requested to be paid
over to or upon the order of the Company (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 respect of which such funds were
deposited, as certified by a Responsible Officer of the Company to the
Administrative Agent, the Administrative Agent shall transfer such amounts from
amounts on deposit in the Permitted Sources Account to the Distribution Account.
SECTION 8.21. CAPACITY UPGRADES RESERVE ACCOUNT
Amounts on deposit in the Capacity Upgrades Reserve Account shall be
paid over to or upon the order of the Company to pay costs with respect to
Capacity Upgrades, upon the receipt by the Administrative Agent of a certificate
of the Company stating the specific amount requested to be paid over to or upon
the order of the Company (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 Capacity Upgrades Reserve Account
are no longer necessary to pay costs in respect of which such funds were
deposited, as certified by a Responsible Officer of the Company to the
reasonable satisfaction of the Administrative Agent, the Administrative Agent
shall apply such amounts in the manner set forth at item "sixth" in Section
8.11(b). Notwithstanding the foregoing, (i) upon the occurrence and during the
continuance of a Default or an Event of Default, funds in the Capacity Upgrade
Reserve Account
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shall not, without the consent of Majority Lenders, be available to pay costs
with respect to Capacity Upgrades and may only be utilized to pay interest on
and principal of the Loans and (ii) upon the occurrence and during the
continuance of a Designated Event, at the option of the Company, funds in the
Capacity Upgrade Reserve Account may be utilized to pay interest on and
principal of the Loans.
SECTION 8.22. RESIDUAL PROJECT COSTS
Amounts remaining on deposit in the Construction Account after the
Conversion Date shall be paid over to or upon the order of the Company to pay
Residual Project Costs, upon the receipt by the Administrative Agent of a
certificate of the Company, certified by the Independent Engineer, stating the
specific amount requested to be paid over to or upon the order of the Company
(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
remained in the Construction Account after the Conversion Date are no longer
necessary to pay costs in respect of which such funds were deposited, as
certified by a Responsible Officer of the Company to the reasonable satisfaction
of the Administrative Agent, the Administrative Agent shall apply such amounts
in the manner set forth in Section 8.11(b).
SECTION 8.23. DELIVERY OF OFFICER'S CERTIFICATES; TIMING OF PAYMENTS
Each certificate to be delivered by the Company under this Article
shall be issued by a Responsible Officer of the Company 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 Administrative Agent
is required to make transfers hereunder. Any certificate of a Responsible
Officer of the Company delivered later than the time specified herein shall
nevertheless be considered valid and shall be honored by the Administrative
Agent 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 Company as set forth in paragraph (a) above, (ii) the
availability of cash in the applicable Account and (iii) other circumstances
beyond the control of the Administrative Agent, the Administrative Agent 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 8.24. RELEASE OF EXCESS AMOUNTS
If, as of any Principal Payment Date, (i)(1) an amount is on deposit
in the Debt Reserve Account or Capacity Upgrades Reserve Account in excess of
the Debt Reserve Required Balance or Capacity Upgrades Reserve Required Balance,
as applicable, or (2) an amount is on deposit in the Operating Reserve Account
in excess of the Operating Reserve Minimum Balance, whether
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as the result of the actual realization of income or gain on the amounts on
deposit in such Account or otherwise and (ii) no Event of Default or Designated
Event has occurred and is continuing, then the Administrative Agent shall, upon
the instruction of the Company, distribute any such excess amounts to the
Revenue Account.
SECTION 8.25. EVENT OF DEFAULT
Any other provision contained in this Agreement to the contrary
notwithstanding, (a) if a Default shall have occurred and is continuing,
distributions from the Accounts shall be made only with the consent of the
Majority Lenders and (b) if the Administra tive Agent shall have received notice
from any Secured Party that an Event of Default shall have occurred and is
continuing and the Loans have been accelerated in accordance with Article VII,
the Administrative Agent 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 Administrative Agent 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 Administrative Agent;
SECOND, to any Lender to which any payment under Section 2.12,
2.13, 2.14 or 2.15 is then due;
THIRD, to the Administrative Agent, to be applied to the payment
of all unpaid fees owing to the Lenders;
FOURTH, to the Administrative Agent, to be applied to the payment
of all accrued but unpaid interest (whether or not due) on the Loans;
FIFTH, to the Administrative Agent, to be applied to the payment
of all of the unpaid principal (whether or not due) of the Loans;
SIXTH, to the Administrative Agent, to be applied to the payment
of all other Obligations (whether or not due); and
SEVENTH, to the Company, or such other Person as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 8.26. INVESTMENT
Any cash held by the Administrative Agent in any Account shall be
invested by the Administrative Agent from time to time as directed in writing by
the Company (or, if 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
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payable on account of any such income or gain, it shall be paid by the Company
or its Affiliates. Any such investment may be sold by the Administrative Agent
whenever necessary to make any distribution required by this Agreement. The
Administrative Agent 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 Administrative Agent will promptly notify the Company
of any loss resulting from any such investment or sale.
SECTION 8.27. STATEMENTS OF ACCOUNTS
Not later than five (5) Business Days following the end of each
calendar month, and from time to time upon written request of the Company, the
Administrative Agent shall provide to the Company a statement of amounts on
deposit in each Account and Permitted Investments as of the end of the prior
month, (b) a statement of 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 8.28. VALUE
Cash and Permitted Investments on deposit from time to time in the
Accounts shall be valued by the Administrative Agent 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 8.29. OTHER DETERMINATIONS
The Company and the Administrative Agent may establish procedures not
materially inconsistent with this Agreement pursuant to which the Administrative
Agent may conclusively determine, for purposes hereof, the amounts from time to
time to be distributed or paid by the Administrative Agent from cash available
in the Accounts or pursuant to which the Administrative Agent and the Company
may provide for reasonable operating and administrative flexibility.
SECTION 8.30. SALES OF PERMITTED INVESTMENTS
The Administrative Agent 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 the terms hereof, for the
Administrative Agent 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 8.31. CUSTOMER UPGRADE ACCOUNT
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The Company and its Subsidiaries shall deposit Customer Upgrade
Amounts in the Customer Upgrade Account. Amounts in the Customer Upgrade Account
shall be paid over to or upon the order of the Company and used to pay the costs
in respect of which they were deposited upon receipt by the Administrative Agent
of a certificate of the Company stating the amount required and a brief
description of the costs to be paid including any xxxx-ups to be received by the
Company. At the end of any fiscal quarter (i) the Administrative Agent shall
transfer any amounts representing xxxx-ups to the Revenue Account, (ii) if there
any amounts that were deposited into the Customer Upgrade Account which are not
necessary to pay costs in respect of which such funds were deposited, as
certified by a Responsible Officer of the Company or as reasonably determined by
the Administrative Agent, the Administrative Agent shall treat such amounts
(excluding any amounts referred to in clause (i) above) in the manner agreed by
the Company with the relevant customer, and (iii) where no such agreement
refereed to in clause (ii) above has been made or where there are funds
remaining having complied with the terms of such agreement, the Administrative
Agent shall transfer such amounts to the Revenue Account.
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
Administrative Agent shall treat as available cash the amount which the
Administrative Agent would have received on such day if the Administrative Agent
had liquidated all the Permitted Investments (at then prevailing market prices)
then on deposit in such Account.
SECTION 8.33. TERMINATION
Upon termination hereof and the payment in full of all Obligations,
all rights to the Collateral shall revert to the Person legally entitled
thereto, and the Administrative Agent shall transfer any remaining amounts,
together with any interest thereon, on deposit in the Accounts to the Company or
as the Company 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
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were not the Administrative Agent, and such bank and its Affili ates may accept
deposits from, lend money to and generally engage in any kind of business with
the Company 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 Company 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 Company 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 hereof, of any other
Financing Document or of 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 Company), 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 of 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 of its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory
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provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of the Administra tive 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.
The Administrative Agent shall, where appropriate, take into account
the interests of the Secured Parties.
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 Company. Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Company, to
appoint a successor. If no successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within thirty (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 Company, 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 Company to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 10.3 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
Company), 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 hereof 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
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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 Company.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis of the Company and its Subsidiaries and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and informa tion 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
MISCELLANEOUS
SECTION 10.1. 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 Company, to it at Xxxxx Xxxxx, 00 Xxxxx Xxxxxx,
Xxxxxxxx XX 00, Xxxxxxx (with a copy to FLAG Telecom Limited, 0 Xxxxx Xxxxxx,
Xxxxxx X0X 0XX, Attention: General Counsel);
(b) if to the Administrative Agent, to it at 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: Xxxxxxx Xxxx (Telecopy No. (212)
921-5947); and
(c) if to any Lender, to it at its address (or telecopy number)
set forth on SCHEDULE 10.1.
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 10.2. WAIVERS; AMENDMENTS
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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 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 hereof or of any other Financing Document or consent to any
departure by the Company 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 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 hereof, pursuant to an agreement or
agreements in writing entered into by the Company and the Majority
Lenders or by the Company and the Administrative Agent with the consent
of the Majority Lenders (unless expressly provided otherwise in this
Agreement);
(ii) in the case of any other Security Document, pursuant
to an agreement or agreements in writing entered into by the
Administrative Agent (with the consent of the Majority Lenders, unless
expressly provided otherwise in such Security Document) and each other
Person party thereto; or
(iii) in the case of any other Financing Document, pursuant
to an agreement or agreements in writing entered into by the
Administrative 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 without the written consent of each Lender (or each Lender of
such Class, as the case may be) no such agreement shall in each case:
(A) increase the Commitment of any Lender;
(B) reduce the principal amount of any Loan or reduce the
rate of interest thereon;
(C) 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 Commit
ment;
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(D) change Section 2.16(b) or 2.16(c);
(E) release 75% (determined at the relevant date of
determination) or more of the Collateral; or
(F) 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;
PROVIDED, FURTHER, that
(I) no such agreement shall amend, modify or otherwise
affect the rights or duties of the Administrative Agent hereunder in
each case without the prior written consent of the Administrative
Agent; and
(II) any waiver, amendment or modification hereof that by
its terms affects the rights or duties under this Agreement of the
Lenders may be effected by an agreement or agreements in writing
entered into by the Company and requisite percentage in interest of the
affected Class of Lenders.
SECTION 10.3. EXPENSES; INDEMNITY; DAMAGE WAIVER
The Company shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Lead Arranger and their respective
Affiliates, including the reasonable fees, charges and disbursements of the
Administrative Agent and counsel for the Administrative Agent 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 hereof and
the other Financing Documents or any amendments, modifications or waivers of the
provi sions 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 Lead Arranger or any Lender, including
the fees, charges and disbursements of any counsel for the Administrative Agent,
the Lead Arranger or any Lender, in connection with the enforcement or
protection of its rights in connection with this Agreement (including pursuant
to a "workout" restructuring or negotiating in respect thereof) or any other
Financing Document, including its rights under this Section, or in connection
with the Loans made hereunder, the Project Documents, or any other instrument or
agreement entered into by the Company in connection herewith or therewith,
including in connection with any workout, restructuring or negotiations in
respect thereof.
(b) The Company further agrees to pay, indemnify and hold each
Lender, the Administrative Agent and the Lead 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
141
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 Company shall indemnify the Administrative Agent, the
Lead Arranger, the Independent Engineer 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 hereof, 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 Company 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 Company (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 Company.
(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
Company thereof (and shall notify the Company 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
Company 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 Company
notice thereof and the Company the opportunity to assume the defense thereof (if
entitled hereunder) or (y) without the prior written consent of the Company,
which shall not be unreasonably withheld, if the Company is not entitled to
assume the defense as a result of clause (ii) or (iii) of the succeeding
sentence. The Company shall be entitled, at its expense, to assume the defense
of such claim or action or to participate in such
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action with counsel of its choice (which counsel shall be reasonably
satisfactory to such Indemnitee if the Company elects to assume the defense) and
at its expense, PROVIDED that the Company may not assume the defense if (i) such
Indemnitee determines, on the reasonable advice of counsel, that representation
of both the Company and such Indemnitee by the Company'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 Company, 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 Company, (iii) the Company 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 Company fails to pay any amount
required to be paid by it to the Administrative Agent or the Lead Arranger under
paragraph (a), (b) or (c) of this Section, each Lender severally agrees to pay
to the Administrative Agent or the Lead 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 Administrative Agent or the Lead Arranger in its capacity as such.
(f) All amounts due under this Section shall be payable promptly
after written demand therefor.
SECTION 10.4. SUCCESSORS AND ASSIGNS; CONSENT AND AGREEMENT
The provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby, except that the Company may not assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of each Lender
(and any attempted assignment or transfer by the Company 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 Administrative
Agent and the Lead Arranger) any legal or equitable right, remedy or claim under
or by reason hereof.
(b) Any Lender may at any time assign to one or more assignees
(other than to the Company, any Subsidiary or the Sponsor 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
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have occurred and be continuing, the Company (such consents not to be
unreasonably withheld or delayed); and
(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 Commitment, 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 $1,000,000 unless each of the Company and
the Administrative Agent otherwise consents.
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 Company). Upon acceptance
and recording pursuant to paragraph (d) of this Section and 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 10.3). 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 hereof 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 Company, 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 names and addresses of the Lenders and the registered
owner(s) of any obligation evidenced by a Note (if applicable), 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 (if
applicable) 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, upon written request, 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 Company marked "cancelled".
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 10.4(c).
The entries in the Register shall be conclusive, and the Company, the
Administrative Agent and the Lenders may
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treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes hereof, 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 hereof unless it has been recorded in the Register as provided in
this paragraph.
(e) Any Lender may, without the consent of the Company 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
Company, 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 hereof. Subject to paragraph (f) of this
Section, the Company 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 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 Company is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Company, 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 10.5. SURVIVAL
All covenants, agreements, representations and warranties made by the
Company herein and in the certificates or other instruments delivered in
connection herewith or pursuant hereto shall be considered to have been relied
upon by the other parties hereto and shall survive the
145
execution and delivery hereof 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 10.3 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 hereof or any provision
hereof.
SECTION 10.6. 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 Lead 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
10.4, their respective successors and assigns. Delivery of an executed
counterpart of a signature page hereof by telecopy shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 10.7. SEVERABILITY
Any provision hereof 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 10.8. 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 setoff 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 Company against any of and all the obligations of the Company now
or hereafter existing under this Agreement held by such Lender and under the
other Financing Documents, including all claims of any nature or description
arising out of or connected hereto, or with any other Financing Document,
irrespective of whether or not such Lender shall have made any demand hereunder
or the principal of or the interest on the Loans or any other amounts due
hereunder shall have become due and payable. 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.
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SECTION 10.9. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
(b) THE COMPANY HEREBY IRREVOCABLY AND UNCONDITION ALLY 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
HERETO, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITION ALLY 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 ADMINISTRATIVE AGENT OR ANY LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING HERETO AGAINST THE COMPANY OR ITS
PROPERTIES OR THE COMPANY'S SUBSIDIARIES OR THEIR PROPERTIES IN THE COURTS OF
ANY JURISDICTION.
(c) THE COMPANY HEREBY IRREVOCABLY AND UNCONDITION ALLY 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 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 IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 10.1. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
(e) THE COMPANY HEREBY IRREVOCABLY AND UNCONDITION ALLY
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APPOINTS FLAG TELECOM USA LIMITED (THE "NEW YORK PROCESS AGENT"), WITH AN OFFICE
ON THE CLOSING DATE AT 000 XXXXXXXXX XXXXXX, 00XX XXXXX, XXX XXXX, XXX XXXX,
00000, AS ITS AGENT TO RECEIVE ON BEHALF OF THE COMPANY 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 REASON ABLY 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
COMPANY BY DELIVERING A COPY OF SUCH PROCESS TO THE COMPANY 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 COMPANY AT ITS ADDRESS REFERRED TO IN SECTION 10.1 (SUCH
SERVICE TO BE EFFECTIVE UPON SUCH RECEIPT BY THE APPROPRIATE PROCESS AGENT AND
THE DEPOSITING OF SUCH PROCESS IN THE MAILS AS AFORESAID). THE COMPANY HEREBY
IRREVOCABLY AND UNCONDITIONALLY AUTHORIZES AND DIRECTS SUCH PROCESS AGENT TO
ACCEPT SUCH SERVICE ON ITS BEHALF. AS AN ALTERNATE METHOD OF SERVICE, THE
COMPANY 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 COMPANY BY CERTIFIED OR REGISTERED AIR MAIL AT ITS
ADDRESS REFERRED TO IN SECTION 10.1.
SECTION 10.10. WAIVER OF SOVEREIGN IMMUNITY
To the extent that the Company has or hereafter may acquire any
immunity (sovereign or otherwise) from any legal action, suit or proceeding,
from jurisdiction of any court or from setoff 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 Company 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 Company 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
000
Xxxxxx xx Xxxxxxx and are intended to be irrevocable and not subject to
withdrawal for purposes of such Act.
SECTION 10.11. JUDGMENT CURRENCY
The obligation of the Company 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 Administrative Agent, the Lead
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
Company shall (and shall procure that each Subsidiary shall with respect to any
Subsidiary Security Agreement to which it is a party) indemnify the
Administrative Agent, the Lead 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 Administrative Agent, the Lead 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 10.12. DAMAGE WAIVER
To the extent permitted by applicable law, the Company shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as 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 10.13. 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 HERETO OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
SECTION 10.14. HEADINGS.
Article and Section headings and the Table of Contents used herein
are for convenience of reference only, are not part hereof and shall not affect
the construction of, or be taken into consideration in interpreting, this
Agreement.
SECTION 10.15. REMOVAL OF CONSULTANTS
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The Administrative Agent may (and, if the Company can demonstrate to
the satisfaction of the Administrative Agent that any Consultant has
persistently failed to perform its duties in a professional manner, the
Administrative Agent will) from time to time, in its reasonable discretion,
remove any one or more of the Consultants, PROVIDED that the Administrative
Agent select and appoint a replacement therefor that is approved by the Company
(which approval shall not be unreasonably withheld or delayed). Notice of any
replacement Consultant shall be given promptly to the Company and the Lenders.
(b) Each Consultant shall be contractually obligated to the
Administrative Agent to carry out the activities required of it in this
Agreement and the other Financing Documents and as otherwise requested by the
Administrative Agent.
SECTION 10.16. 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 hereof or of 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 Company 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
Company shall have consented to such disclosure in writing and (g) to any
Lender's assignee or any proposed assignee 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.
ARTICLE XI
THE DEED TRUSTEE
SECTION 11.1. APPOINTMENT OF DEED TRUSTEE
Each Secured Party irrevocably appoints WestLB as the deed trustee
(the "DEED TRUSTEE") to act as its trustee hereunder and with respect to the
Company Security Agreement
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(U.K.), the Company Security Agreements (Hong Kong) and the Deed of Mortgage of
Shares (Hong Kong) and irrevocably authorizes the Deed Trustee on its behalf to:
(a) enter into each of the Company Security Agreement (U.K.), the
Company Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong
Kong); and
(b) perform such duties and exercise such rights and powers under
this Article XI and each of the Company Security Agreement (U.K.) , the Company
Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong)
as are specifically delegated to the Deed Trustee by the terms hereof and
thereof including without limitation the release of security, together with such
rights, powers and discretions as are reasonably incidental thereto including
the registartion thereof.
In respect of the above appointment, the Deed Trustee hereby declares that it
holds and shall hold:
(a) all rights, titles and interests that may now or hereafter be
mortgaged, charged, pledged, assigned or otherwise secured in favor of itself as
the deed trustee by or pursuant to this Agreement, the Company Security
Agreement (U.K.), the Company Security Agreements (Hong Kong) and the Deed of
Mortgage of Shares (Hong Kong);
(b) the benefit of all representations, covenants, guarantees,
indemnities and other contractual provisions given in favor of itself as a deed
trustee (other than any such benefits as are given solely for its own benefit)
by or pursuant to this Agreement, the Company Security Agreement (U.K.), the
Company Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong
Kong); and
(c) all proceeds of the security referred to in paragraph (a)
above and of the enforcement of the benefits referred to in paragraph (b) above,
on trust for itself and the other Secured Parties from time to time.
The Deed Trustee shall have only those duties which are expressly specified in
this Article XI and/or the Company Security Agreement (U.K.), the Company
Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong).
The Deed Trustee's duties under this Article XI and/or the Company Security
Agreement (U.K.), the Company Security Agreements (Hong Kong) and the Deed of
Mortgage of Shares (Hong Kong) are intended to be of a mechanical and
administrative nature only.
SECTION 11.2. DIRECTIONS OF ADMINISTRATIVE AGENT
Save as expressly set out in this Article XI, in the exercise of any
right or power and as to any matter not expressly provided for by this Article
XI or the Company Security Agreement (U.K.), the Company Security Agreements
(Hong Kong) and the Deed of Mortgage of Shares
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(Hong Kong) to which it is party, the Deed Trustee shall act in accordance with
the instructions of the Administrative Agent. In the absence of any such
instructions and/or any relevant contrary requirement contained in this Article
XI or the Company Security Agreement (U.K.), the Company Security Agreements
(Hong Kong) and the Deed of Mortgage of Shares (Hong Kong), the Deed Trustee may
act or refrain from acting with respect to such right or power and as to any
such matter as it shall see fit. Any such instructions shall be binding on the
Deed Trustee.
SECTION 11.3. RELATIONSHIP
The relationship between the Administrative Agent on the one hand and
the Deed Trustee on the other is that of principal and agent save only that the
benefits of the Company Security Agreement (U.K.), the Company Security
Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong) are held
by the Deed Trustee as trustee for itself and the other Secured Parties.
(b) The Deed Trustee shall not be liable to any person for any
breach by any other Party to the Company Security Agreement (U.K.), the Company
Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong).
(c) In acting as the Deed Trustee, the Deed Trustee shall be
regarded as acting through its agency division which shall be treated as a
separate entity from any other of its divisions or departments and any
information received by some other division or department of the Deed Trustee
may be treated as confidential and shall not be regarded as having been given to
the Deed Trustee's agency division.
SECTION 11.4. RELIANCE
In applying any moneys received by it under the Company Security
Agreement (U.K.), the Company Security Agreements (Hong Kong) and the Deed of
Mortgage of Shares (Hong Kong), the Deed Trustee may rely on any certificate
made or given by the Administrative Agent as to the identity of, and amounts
owing to, the Secured Parties under any of the Transaction Documents and shall
be protected in so relying.
(b) The Deed Trustee may:
(i) rely on any communication or document reasonably
believed by it to be genuine and correct and to have been signed by or
with the authority of the proper person;
(ii) rely on any statement made by a director or employee
of any person regarding any matters which may reasonably be assumed to
be within his knowledge or within his power to verify; and
(iii) engage, pay for and rely on legal or other advisers
selected by it and shall be protected in so relying.
152
SECTION 11.5. INFORMATION
Save as expressly set out herein, the Deed Trustee shall not have any
duty:
(i) either initially or on a continuing basis to provide
any of the Secured Parties with any credit or other information (other
than if requested by the Administrative Agent, information in the Deed
Trustee's possession specifically concerning the Company Security
Agreement (U.K.), the Company Security Agreements (Hong Kong) and the
Deed of Mortgage of Shares (Hong Kong)) with respect to the financial
condition or affairs of the Company whether coming into its possession
or that of any related entities of the Deed Trustee before or on the
entry into the Company Security Agreement (U.K.), the Company Security
Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong)
(as the case may be) or at any time thereafter; or
(ii) unless specifically requested to do so by the
Administrative Agent in accordance with this Article XI to request any
certificates or other documents from the Company.
(b) The Deed Trustee need not disclose any information relating
to the Company or any of its related entities or any other person or any matter
if such disclosure would or might in the reasonable opinion of the Deed Trustee
constitute a breach of any law or regulation or be otherwise actionable at the
suit of any person.
SECTION 11.6. THE DEED TRUSTEE INDIVIDUALLY
Neither the Deed Trustee nor any associated company of the Deed
Trustee, any director, officer or employer of a corporation acting as Deed
Trustee shall be precluded from becoming the owner of or acquiring any interest
in, holding or disposing of any securities issued by the Company and shall have
the same rights and powers thereunder (and may exercise such rights and powers)
as though it were not the Deed Trustee.
(b) The Deed Trustee will not be liable to account to any other
Secured Party for any profit or fees it receives for its own account in
connection with this Article XI.
SECTION 11.7. DOCUMENTATION
Neither the Deed Trustee nor any of its officers, employees or agents
shall be responsible to any of the Secured Parties or any other person for:
(a) the execution (other than by itself), genuineness, validity,
enforceability or sufficiency of the Company Security Agreement (U.K.), the
Company Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong
Kong) or any other document; or
(b) the collectability of amounts payable thereunder; or
153
(c) the accuracy of any statements (whether written or oral) made
in or in connection with the Company Security Agreement (U.K.), the Company
Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong).
SECTION 11.8. DEFAULT
The Deed Trustee shall not be required to ascertain or inquire as to
the performance or observance by the Company of the terms of the Company
Security Agreement (U.K.), the Company Security Agreements (Hong Kong) and the
Deed of Mortgage of Shares (Hong Kong) or any other document in connection
therewith. The Deed Trustee shall not be deemed to have knowledge of any Default
or Event of Default unless the Deed Trustee has received notice from the
Administrative Agent describing such Default or Event of Default and stating
that such notice is a "Notice of Default".
(b) If the Deed Trustee receives such a notice of Default or
Event of Default, it shall give notice thereof promptly to the other Secured
Parties.
(c) The Deed Trustee shall take or refrain from taking such
action with respect to such Default or Event of Default as shall be directed by
the Administrative Agent, provided that nothing herein shall oblige the Deed
Trustee to institute legal action or proceedings on behalf of any Secured Party.
Until the Deed Trustee has received such directions, it may (but shall not be
obliged to) take or refrain from taking such action with respect to such Default
or Event of Default as it shall see fit.
SECTION 11.9. INDEMNITY
The Secured Parties (other than where such person is the same person
as the Deed Trustee) agree to indemnify the Deed Trustee on demand (to the
extent not reimbursed by the Company and without prejudice to the liability of
the Company under any of the Transaction Documents) for any and all liabilities,
losses, damages, penalties, actions, judgements, costs, expenses or
disbursements of any kind whatsoever (including legal fees) which may be imposed
on, incurred by or asserted against the Deed Trustee in any way relating to or
arising out of its acting as the Deed Trustee for the Secured Parties (on the
instructions of the Administrative Agent of otherwise) under this Article XI
and/or the Company Security Agreement (U.K.), the Company Security Agreements
(Hong Kong) and the Deed of Mortgage of Shares (Hong Kong) or any action taken
or omitted by the Deed Trustee's thereunder, except to the extent that the
liability or loss arises directly from the Deed Trustee's gross negligence or
wilful misconduct.
SECTION 11.10. EXONERATION
Neither the Deed Trustee nor any officer, employee or agent of the
Deed Trustee shall be liable to any of the Secured Parties for any action taken
or omitted under or in connection with the Company Security Agreement (U.K.),
the Company Security Agreements (Hong Kong) and the Deed of Mortgage of Shares
(Hong Kong) unless caused by its negligence or wilful
154
misconduct in acting in its capacity as deed trustee hereunder and under the
Company Security Agreement (U.K.), the Company Security Agreements (Hong Kong)
and the Deed of Mortgage of Shares (Hong Kong) and no Secured Party shall take
any proceedings in this respect.
(b) Any officer, employee or agent of the Deed Trustee can rely
on the terms of this Section 11.10 in accordance with the Contracts (Rights of
Third Parties) Xxx 0000, an English law statute.
SECTION 11.11. AMENDMENTS
If authorised by the Administrative Agent, the Deed Trustee may grant
waivers or consents or vary the terms of the Company Security Agreement (U.K.),
the Company Security Agreements (Hong Kong) and the Deed of Mortgage of Shares
(Hong Kong) and the Deed Trustee shall be under no liability to any Secured
Party whatsoever in respect of any such waiver, consent or variation.
SECTION 11.12. RESIGNATION
The Deed Trustee may resign by giving notice thereof to the
Administrative Agent and may be removed by the Administrative Agent giving
notice to that effect to the Deed Trustee. In either event the Administrative
Agent may appoint a successor Deed Trustee which shall be a reputable and
experienced bank, incorporated in or having a branch in England.
(b) If such a notice of resignation or removal has been given
and, within 30 days after such notice of resignation or removal, no successor
Deed Trustee shall have been appointed by the Administrative Agent (acting in
consultation with the Company), the retiring Deed Trustee, after consultation
with the Administrative Agent shall have the right to appoint a successor Deed
Trustee which shall be a reputable and experienced bank incorporated or having a
branch in England.
(c) The Deed Trustee agrees not to resign without good cause, but
the Deed Trustee's resignation shall be conclusive evidence of there having been
good cause.
(d) Subject as otherwise provided in Section 11.12(e) and (f),
the resignation or removal of the retiring Deed Trustee and the appointment of
any successor Deed Trustee shall both become effective upon the successor Deed
Trustee notifying the Administrative Agent in writing that it accepts such
appointment and executing a Deed Trustee's deed of accession, whereupon the
successor Deed Trustee shall succeed to the position of the retiring Deed
Trustee and the term "Deed Trustee" in the Company Security Agreement (U.K.),
the Company Security Agreements (Hong Kong) and the Deed of Mortgage of Shares
(Hong Kong) shall include such successor Deed Trustee where appropriate. This
Article XI shall continue to benefit a retiring Deed Trustee in respect of any
action taken or omitted by it under this Article XI or the Company Security
Agreement (U.K.), the Company Security Agreements (Hong Kong) and the Deed of
Mortgage of Shares (Hong Kong) while it was a Deed Trustee.
155
(e) Notwithstanding paragraph (d) above, the resignation or
removal of a retiring Deed Trustee shall not become effective until the
Administrative Agent is satisfied that all things required to be done in order
that the Company Security Agreement (U.K.), the Company Security Agreements
(Hong Kong) and the Deed of Mortgage of Shares (Hong Kong) or replacements
therefore shall provide for perfected and enforceable security in favor of the
replacement Deed Trustee.
(f) The Company shall take such action as the Administrative
Agent may determine as being necessary in order that the Company Security
Agreement (U.K.), the Company Security Agreements (Hong Kong) and the Deed of
Mortgage of Shares (Hong Kong) or replacements therefore shall provide for
perfected and enforceable security in favor of any replacement Deed Trustee.
(g) The fees payable by the Company to a successor Deed Trustee
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor.
(h) If a successor to the Deed Trustee is appointed under the
provisions of this Section, then:
(i) the outgoing Deed Trustee shall be discharged from any
further obligation hereunder and under the Company Security Agreement
(U.K.), the Company Security Agreements (Hong Kong) and the Deed of
Mortgage of Shares (Hong Kong) but shall remain entitled to the
benefit of the provisions of this Section 11.12(h);
(ii) its successor and each Secured Party shall have the
same rights and obligations amongst themselves as they would have had
if such successor had been a party to this Agreement and the Company
Security Agreement (U.K.), the Company Security Agreements (Hong
Kong) and the Deed of Mortgage of Shares (Hong Kong) at the outset;
(iii) the successor shall be the relevant Deed Trustee in
respect of each of this Agreement and the Company Security Agreement
(U.K.), the Company Security Agreements (Hong Xx.xx) and the Deed of
Mortgage of Shares (Hong Kong); and
(iv) the outgoing Deed Trustee shall promptly deliver to
its successor all documents and papers held by it in its capacity as
Deed Trustee.
SECTION 11.13. SECURITY DOCUMENTS
The Deed Trustee in its capacity as trustee under the Company
Security Agreement (U.K.), the Company Security Agreements (Hong Kong) and the
Deed of Mortgage of Shares (Hong Kong) or otherwise shall not be liable for any
failure, omission, or defect in perfecting the security constituted by the
Company Security Agreement (U.K.), the Company Security
156
Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong) or any
security created thereby including, without limitation, any failure to (i)
register the same in accordance with the provisions of any of the documents of
title of the Company of any of the property thereby charged, (ii) make any
recordings or filings in connection therewith, (iii) effect or procure
registration of or otherwise protect the floating charge or any other such
security created by or pursuant to the Company Security Agreement (U.K.), the
Company Security Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong
Kong) under any registration laws in any jurisdiction, (iv) give notice to any
person of the execution of any of documents or (v) to obtain any licence,
consent, or other authority for the creation of any security.
(b) The Deed Trustee in its capacity as trustee or otherwise may
accept without enquiry such title as the Company may have to the property over
which security is intended to be created by the Company Security Agreement
(U.K.), the Company Security Agreements (Hong Kong) and the Deed of Mortgage of
Shares (Hong Kong).
(c) Save where the Deed Trustee holds a legal mortgage over, or
over an interest in, real property or shares, the Deed Trustee in its capacity
as trustee or otherwise shall not be under any obligation to hold any title
deeds, security documents or any other documents in connection with the property
charged by the Company Security Agreement (U.K.), the Company Security
Agreements (Hong Kong) and the Deed of Mortgage of Shares (Hong Kong) or any
other such security in its own possession or to take any steps to protect or
preserve the same.
(d) Save as otherwise provided in the Company Security Agreement
(U.K.), the Company Security Agreements (Hong Kong) or the Deed of Mortgage of
Shares (Hong Kong), all moneys which under the trusts herein or therein
contained are received by the Deed Trustee in its capacity as trustee or
otherwise may be invested in the name of or under the control of the Deed
Trustee in any investment for the time being authorised by English or Hong Kong
law, as applicable, for the investment by trustees of trust money or in any
other investments which may be selected by the Deed Trustee with the consent of
the Administrative Agent. Additionally, the same may be placed on deposit in the
name of or under the control of the Deed Trustee at such bank or institution
(including the Administrative Agent and upon such terms as the Deed Trustee may
think fit).
(e) The Secured Parties hereby confirm their approval of the
Company Security Agreement (U.K.), the Company Security Agreements (Hong Kong)
and the Deed of Mortgage of Shares (Hong Kong) and any security created or to be
created pursuant thereto and hereby authorizes, empowers and directs the Deed
Trustee (by itself or by such person(s) as it may nominate) to execute and
enforce the same as trustee or as otherwise provided (and whether or not
expressly in the other Secured Parties' names) on its behalf, subject always to
the terms of this Article XI and the terms of the Company Security Agreement
(U.K.), the Company Security Agreements (Hong Kong) and the Deed of Mortgage of
Shares (Hong Kong).
SECTION 11.14. CO-DEED TRUSTEES
157
The Deed Trustee may appoint any person established or resident in
any jurisdiction (whether a trust corporation or not) to act either as a
separate security agent or a co-deed trustee jointly with the Deed Trustee (i)
if the Deed Trustee reasonably considers that without such appointment the
interests of the Secured Parties would be materially and adversely affected or
(ii) for the purposes of conforming to any legal requirements, restrictions or
conditions in any jurisdiction in which any particular act or acts is or are to
be performed or (iii) for the purposes of obtaining a judgment in any
jurisdiction of either a judgement already obtained or of any of the provisions
of the Transaction Documents; provided, that in each case such separate deed
trustee or co-deed trustee becomes bound by the terms of this Article XI as if
it were the Deed Trustee.
(b) Each separate deed trustee or co-deed trustee shall (subject
always to the provisions of this Article XI) have such trusts, powers,
authorities and discretions (not exceeding those conferred on the Deed Trustee
by this Article XI) and such duties and obligations as shall be conferred or
imposed by the instrument of appointment.
(c) The Deed Trustee shall have power in like manner to remove
any such person. Such reasonable remuneration as the Deed Trustee may pay to any
such person, together with any attributable costs, charges and expenses properly
incurred by it in performing its function as such separate deed trustee or
co-deed trustee shall for the purpose of this Article XI be treated as costs,
charges and expenses incurred by the Deed Trustee.
SECTION 11.15. RELEASE OF SECURITY
The Deed Trustee shall and is hereby authorised by the other Lenders
to execute on behalf of itself where relevant without the need for any further
referral to, or authority from, the Secured Parties or other person all
necessary releases of any security or guarantees given by the Company in
relation to the release of any security which is permitted under or consented to
in accordance with the Company Security Agreement (U.K.), the Company Security
Agreements (Hong Kong) or the Deed of Mortgage of Shares (Hong Kong).
[Remainder of page intentionally left blank]
158
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 ASIA LIMITED
By:
Name:
Title: Attorney-in-Fact
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH,
as the Administrative Agent,
Deed Trustee, Syndication Agent,
Lead Arranger and a Lender
By:
Name:
Title:
By:
Name:
Title:
S - 160
THE ROYAL BANK OF SCOTLAND PLC,
as Documentation Agent and
as a Lender
By:
Name:
Title:
S - 161
ING BANK N.V. HONG KONG BRANCH,
as a Lender
By:
Name:
Title:
By:
Name:
Title:
S - 162
DGZ-DEKABANK DEUTSCHE KOMMUNALBANK,
as a Lender
By:
Name:
Title:
By:
Name:
Title:
S - 163
KBC FINANCE IRELAND,
as a Lender
By:
Name:
Title:
By:
Name:
Title:
S - 164
SCHEDULE 1.1(ii)
COMMITMENTS
LENDER NAME CONSTRUCTION LOAN NET CONSTRUCTION LOAN
COMMITMENT COMMITMENT AT THE
CLOSING DATE AFTER APPLICATION OF THE
PRE-SALE PROCEEDS
Westdeutsche Landesbank $ 71,940,833 $ 65,500,000
Girozentrale, New York Branch
The Royal Bank of Scotland plc $ 65,900,000 $ 60,000,000
ING Bank N.V. $ 16,475,000 $ 15,000,000
DGZ-DekaBank Deutsche $ 16,475,000 $ 15,000,000
Kommunalbank
KBC Finance Ireland $ 16,475,000 $ 15,000,000
Westdeutsche Landesbank $112,734,167 $100,000,000
Girozentrale, New York Branch
f/b/o FLAG Telecom Holdings
Limited
SCHEDULE 1.1(iii)
PRINCIPAL PAYMENT DATES/AMORTIZATION
---------------------------------------------------
SCHEDULED REPAYMENTS OF
DATE TERM LOANS
---------------------------------------------------
March 31, 2003 4.25%
---------------------------------------------------
June 30, 2003 5.00%
---------------------------------------------------
September 30, 2003 5.50%
---------------------------------------------------
December 31, 2003 5.75%
---------------------------------------------------
March 31, 2004 6.00%
---------------------------------------------------
June 30, 2004 6.00%
---------------------------------------------------
September 30, 2004 6.00%
---------------------------------------------------
December 31, 2004 6.00%
---------------------------------------------------
March 31, 2005 6.00%
---------------------------------------------------
June 30, 2005 6.00%
---------------------------------------------------
September 30, 2005 6.00%
---------------------------------------------------
December 31, 2005 6.00%
---------------------------------------------------
March 31, 2006 5.00%
---------------------------------------------------
June 30, 2006 4.00%
---------------------------------------------------
September 30, 2006 3.75%
---------------------------------------------------
December 31, 2006 3.75%
---------------------------------------------------
March 31, 2007 3.75%
---------------------------------------------------
June 30, 2007 3.75%
---------------------------------------------------
September 30, 2007 3.75%
---------------------------------------------------
December 31, 2007 3.75%
---------------------------------------------------
SCHEDULE 1.1(vii)
PART I. APPLICABLE MARGIN
A. The Applicable Margin on the outstanding Construction/Term Loans shall
be calculated from time to time at a split rate, calculated as provided
below:
(i) The Applicable Margin shall equal:
(a) 1.25% (in the case of Eurodollar Loans) and 0.25% (in
the case of ABR Loans) for that portion of the
outstanding Construction Loans/ Term Loans that equals
the aggregate amount of the Qualifying Capacity
Receivables, if any, as at the relevant date of
determination (as provided below), PROVIDED, HOWEVER,
that the portion of the Construction/Term Loans that
accrues interest at this rate shall not exceed an amount
equal to 50% of the outstanding Construction Loans/Term
Loans as at the relevant date of determination; and
(b) 3.25% (in the case of Eurodollar Loans) and 2.25% (in
the case of ABR Loans) for the balance of the outstanding
Construction Loans/ Term Loans.
B. The Applicable Margin shall be determined in respect of each
outstanding Loan on the following dates of determination:
(i) for any Eurodollar Loan, on the first day of the initial
Interest Period and each three month anniversary thereof
during the Construction Loan Commitment Period (or if such day
is not an Interest Payment Date, the closest Interest Payment
Date thereto) and the Conversion Date and each three month
anniversary thereof for so long as the Term Loans remain
outstanding (or if any such anniversary date is not an
Interest Payment Date, the closest Interest Payment Date
thereto); and
(ii) for any ABR Loan, on the date of borrowing (or converting
into) such ABR Loan and thereafter on each Interest Payment
Date for such ABR Loan.
PART II - COMMITMENT FEES
During the Construction Loan Commitment Period, the commitment fee shall accrue
in respect of the undrawn Construction Loan Commitments at a split rate,
calculated as provided herein.
The commitment fee shall accrue at
(a) a rate of 0.375% PER ANNUM on that portion, if any, of the
average daily undrawn Construction Loan Commitments which
could have been drawn as Loans accruing interest at the lower
Applicable Margin (as provided in clause A.(i)(a) of Part I of
this Schedule) during the relevant period, such amount to
equal the difference between (x) the aggregate amount of
Qualifying Capacity Receivables as at the relevant date of
determination and (y) the average daily aggregate principal
amount of Construc tion/Term Loans that, during the relevant
period, accrues interest at the lower Applicable Margin
provided for in clause A(i)(a) of Part I of this Schedule;
PROVIDED, HOWEVER, in no event shall the portion of the
undrawn Construction Loan Commitments that is eligible to
accrue fees at this rate exceed 50% of the amount of the
undrawn Construction Loan Commitments as at the relevant date
of determination; and
(b) a rate of 0.75% PER ANNUM on the balance of the average
daily undrawn Construction Loan Commitments.
Schedule 1.1(vii) - 168
SCHEDULE 10.1
Notice Addresses
COMPANY
FLAG Asia Limited
0 Xxxxx Xxxxxx
Xxxxxx, X0X 0XX
Xxxxxx Xxxxxxx
ADMINISTRATIVE AGENT
Xxxxxxx Xxxx
Westdeutsche Landesbank Girozentrale
New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
Email: Xxxxxxx_xxxx@xxxxxx.xxx
DOCUMENTATION AGENT
Xxxx Xxxxxxx/Xxxxx Xxxx
Loans Administration
The Royal Bank of Scotland
Corporate Banking Office
XX Xxx 000
0-00 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx
XX0X 0XX
Telephone: 00-000-000-0000
Facsimile: 00-000-000-0000
LENDERS
Westdeutsche Landesbank Girozentrale
New York Branch
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
The Royal Bank of Scotland
Corporate Banking Office
Loan Administration
XX Xxx 000
0-00 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx
XX0X 0XX
Telephone: 00-000-000-0000
Facsimile: 00-000-000-0000
ING Bank NV
Hong Kong Branch
One IFC, Xxx Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx Xxxx Xxxx
Telephone: 000-0000-0000
Facsimile: 852-2537-2229
DGZ-DekaBank Deutsche Kommunalbank
Xxxxxxxxxxxx 00
X-00000 Xxxxxxxxx xx Xxxx
Xxxxxxx
Telephone: 00-00-0000-0000
Facsimile: 00-00-0000-0000
KBC Global Structured Finance Asia Pacific
00/X Xxxxxxx Xxxxx
00 Xxxxxxx Xxxx
Xxxxxxx, Xxxx Xxxx
Telephone: 000-0000-0000
Facsimile: 000-0000-0000
Schedule 10.1 - 170
