Exhibit 99.2
EXECUTION VERSION
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$100,000,000
CREDIT AGREEMENT
among
Global Crossing (UK) Telecommunications Limited,
as Borrower,
the other Loan Parties signatory hereto,
and
STT Communications Ltd.,
as Lender
Dated as of May 18, 2004
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TABLE OF CONTENTS
Page
SECTION 1 ................................................................ 1
DEFINITIONS .............................................................. 1
1.1 Defined Terms ................................................... 1
1.2 Other Definitional Provisions ................................... 13
SECTION 2 ................................................................ 14
AMOUNT AND TERMS OF COMMITMENT ........................................... 14
2.1 Term Loan Commitment ............................................ 14
2.2 Procedure for Term Loan Borrowing ............................... 14
2.3 Repayment of Term Loans ......................................... 15
2.4 Evidence of Debt ................................................ 15
2.5 Optional Prepayments ............................................ 15
2.6 Mandatory Prepayments ........................................... 16
2.7 Interest Rates, Payment Dates and Fees .......................... 17
2.8 Computation of Interest and Fees ................................ 17
2.9 Inability to Determine Interest Rate ............................ 18
2.10 Payments ........................................................ 18
2.11 Requirements of Law ............................................. 18
2.12 Taxes ........................................................... 19
2.13 Indemnity ....................................................... 20
2.14 Illegality ...................................................... 21
2.15 Change of Lending Office ........................................ 21
SECTION 3 ................................................................ 22
REPRESENTATIONS AND WARRANTIES ........................................... 22
3.1 Financial Condition ............................................. 22
3.2 Corporate Existence; Compliance with Law ........................ 22
3.3 Corporate Power; Authorization; Enforceable Obligations ......... 22
3.4 No Legal Bar .................................................... 23
3.5 No Material Litigation .......................................... 23
3.6 No Default ...................................................... 23
3.7 Ownership of Property; Liens .................................... 23
3.8 Intellectual Property ........................................... 24
3.9 Taxes ........................................................... 24
3.10 Federal Regulations ............................................. 24
3.11 Investment Company Act; Other Regulations ....................... 24
3.12 Subsidiaries .................................................... 24
3.13 Use of Proceeds ................................................. 25
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3.14 Accuracy of Information, etc .................................... 25
3.15 Security Documents .............................................. 25
3.16 Insurance ....................................................... 26
3.17 Change of Control ............................................... 26
3.18 Finance Committee Approval ...................................... 26
3.19 Bonuses ......................................................... 26
3.20 Existing Indebtedness ........................................... 26
SECTION 4 ................................................................ 26
CONDITIONS PRECEDENT ..................................................... 26
4.1 Conditions to Initial Extension of Credit ....................... 26
4.2 Conditions to Each Subsequent Extension of Credit ............... 29
SECTION 5 ................................................................ 30
AFFIRMATIVE COVENANTS .................................................... 30
5.1 Financial Statements. Furnish to the Lender: .................... 30
5.2 Certificates; Other Information ................................. 31
5.3 Payment of Obligations .......................................... 33
5.4 Conduct of Business and Maintenance of Existence, etc. .......... 33
5.5 Maintenance of Property; Insurance .............................. 33
5.6 Inspection of Property; Books and Records; Discussions .......... 33
5.7 Notices ......................................................... 33
5.8 Additional Collateral, etc. ..................................... 34
5.9 Use of Proceeds ................................................. 34
5.10 Further Assurances .............................................. 35
5.11 Financial Assistance Requirements ............................... 35
5.12 Guarantors ...................................................... 35
SECTION 6 ................................................................ 35
NEGATIVE COVENANTS ....................................................... 35
6.1 Limitation on Indebtedness ...................................... 35
6.2 Limitation on Liens ............................................. 36
6.3 Limitation on Fundamental Changes ............................... 36
6.4 Limitation on Disposition of Property ........................... 36
6.5 Limitation on Restricted Payments ............................... 37
6.6 [Intentionally Omitted] ......................................... 37
6.7 Limitation on Investments ....................................... 37
6.8 Limitation on Optional Payments and Modifications of Debt
Instruments, etc. ............................................... 37
6.9 Limitation on Transactions with Affiliates ...................... 38
6.10 Limitation on Sales and Leasebacks .............................. 38
6.11 Limitation on Changes in Fiscal Periods ......................... 38
6.12 Limitation on Negative Pledge Clauses ........................... 38
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6.13 Limitation on Restrictions on Distributions ..................... 38
6.14 Limitation on Lines of Business ................................. 39
6.15 Limitation on Hedge Agreements .................................. 39
6.16 Bonuses ......................................................... 39
6.17 Indebtedness and Investments regarding GMS ...................... 39
6.18 Limitation on Permitted Repayments of Intercompany Debt ......... 39
SECTION 7 ................................................................ 39
EVENTS OF DEFAULT ........................................................ 39
SECTION 8 ................................................................ 42
MISCELLANEOUS ............................................................ 42
8.1 Amendments and Waivers .......................................... 42
8.2 Notices ......................................................... 42
8.3 No Waiver; Cumulative Remedies .................................. 43
8.4 Survival of Representations and Warranties ...................... 43
8.5 Payment of Expenses ............................................. 43
8.6 Successors and Assigns; Participations and Assignments .......... 44
8.7 Adjustments; Set-off ............................................ 48
8.8 Counterparts .................................................... 48
8.9 Severability .................................................... 48
8.10 Integration ..................................................... 49
8.11 GOVERNING LAW ................................................... 49
8.12 Submission To Jurisdiction; Waivers ............................. 49
8.13 Acknowledgments ................................................. 50
8.14 Confidentiality ................................................. 50
8.15 Release of Collateral and Guarantee Obligations ................. 50
8.16 Accounting Changes .............................................. 51
8.17 WAIVERS OF JURY TRIAL ........................................... 51
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SCHEDULES:
3.3 Consents, Authorizations, Filings and Notices
3.12 Subsidiaries
3.15 Filing Jurisdictions
5.2(b) Treasury Report Targets
6.1(b) Existing Indebtedness
6.2(a) Existing Liens
EXHIBITS:
A Form of Guarantee
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Security Agreement
E Form of Assignment and Acceptance
F [Intentionally Omitted]
G Form of Term Note
H Form of Borrowing Notice
I Form of Pledge Agreement
J Form of Treasury Report
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CREDIT AGREEMENT, dated as of May 18, 2004 , among Global Crossing (UK)
Telecommunications Limited, a company organized and existing under the laws of
England and Wales (company number 024998) (the "Borrower"), the other Loan
Parties listed on the signature pages hereto, and STT Communications Ltd., a
company organized and existing under the laws of Singapore ("STTC"), as a Lender
and the other Lenders from time to time party hereto.
W I T N E S S E T H:
WHEREAS, Borrower and its Affiliates have requested that Lender make
available to the Borrower a credit facility in an aggregate amount of up to
$100,000,000 to permit the Borrower to repay a portion of the demand loans
payable to Global Crossing (Bidco) Limited ("Bidco"), an Affiliate of the
Borrower;
WHEREAS, the Lender is willing to make such credit facilities available
upon and subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1.
DEFINITIONS
1.1 Defined Terms.
As used in this Agreement, the terms listed in this Section 1.1 shall have
the respective meanings set forth in this Section 1.1.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise. Notwithstanding the foregoing, so long as the Parent is controlled by
the Government of Singapore, any other Person that is controlled by the
Government of Singapore, but which is not controlled directly or indirectly by
the ultimate corporate parent of the Parent, shall not be treated as an
"Affiliate" of the Parent hereunder.
"Agreement": this Credit Agreement, as amended, supplemented, replaced or
otherwise modified from time to time.
"Applicable Margin": for each Type of Term Loan, the rate per annum set
forth below:
Base Rate Eurodollar
Loans Loans
----------- -------------
Term Loan 7.0% 9.9%
provided, that on each 90 day anniversary of the Closing Date .5% will be added
to the Applicable Margin in effect on the date immediately prior to such
anniversary.
"Asset Sale": any Disposition of Property or series of related Dispositions
of Property (excluding any such Disposition permitted by clause (a), (b), (c) or
(d) of Section 6.4) which yields gross proceeds to the Borrower or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$1,000,000.
"Assignee": as defined in Section 8.6(c).
"Assignment and Acceptance": as defined in Section 8.6(c).
"Assignor": as defined in Section 8.6(c).
"Available Commitment": at any time, an amount equal to the excess, if any,
of (a) $100,000,000 plus any increase in the Term Loans pursuant to Section
2.6(c) over (b) the principal amount of Term Loans then outstanding plus the
amount then available to GCNA under the Working Capital Facility.
"Base Rate": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2
of 1%. For purposes hereof: "Prime Rate" shall mean the prime lending rate as
set forth on the British Banking Association Telerate Page 5 (or such other
comparable page as may in the opinion of the Lender, replace such page for the
purpose of displaying such rate), as in effect from time to time. The Prime Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually available. Any change in the Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate, or the Federal
Funds Effective Rate, respectively.
"Base Rate Loans": Term Loans for which the applicable rate of interest is
based upon the Base Rate.
"Benefitted Lender": as defined in Section 8.7(a).
"Bidco": as defined in the recitals hereto.
"Board": the Board of Governors of the Federal Reserve System of the United
States (or any successor).
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"Borrower": as defined in the preamble hereto.
"Borrowing Date": as defined in Section 2.2.
"Borrowing Notice": with respect to any request for borrowing of Term Loans
hereunder, a notice from the Borrower, substantially in the form of, and
containing the information prescribed by, Exhibit H, delivered to the Lender.
"Business Day": (a) for all purposes other than as covered by clause (b)
below, a day other than a Saturday, Sunday or other day on which commercial
banks in Singapore, the United Kingdom or the State of New Jersey are authorized
or required by law to close and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (a) and
which is also a day for trading by and between banks in Dollar deposits in the
interbank eurodollar market.
"Capital Expenditures": for any period, with respect to any Person, the
aggregate of all expenditures by such Person for the acquisition or leasing
(pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) which are required to be capitalized under GAAP on a balance sheet
of such Person.
"Capital Lease Obligations": with respect to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"Capital Stock": any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor's Ratings Services ("S&P") or P-2
by Xxxxx'x Investors Service, Inc. ("Moody's"), or carrying an equivalent rating
by a nationally recognized rating agency, if both of the two named rating
agencies cease publishing ratings of commercial paper issuers generally, and
maturing within six months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition, having a term of not
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more than 30 days with respect to securities issued or fully guaranteed or
insured by the United States government; (e) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A by Moody's; (f) securities with
maturities of six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; and (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"Change of Control": the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), other
than the current holder of the outstanding common stock of the Borrower or as a
result of the sale of any outstanding equity stock of the Parent by STTC (or any
Affiliate of STTC), shall become, or obtain rights (whether by means or
warrants, options or otherwise) to become, the "beneficial owner" (as defined in
Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or indirectly, of
more than 25% of the outstanding common stock of the Borrower or (b) the
Borrower shall become subject to the reporting requirements of the Exchange Act
or any similar securities law in any jurisdiction outside the United States
(other than as a result of actions taken directly by STTC or any Affiliate of
STTC).
"Closing Date": the date on which the conditions precedent set forth
in Section 4.1 shall have been satisfied, which date shall be not later than
June 15, 2004.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral": all (i) Property of the Borrower (other than any
Property expressly excluded pursuant to the terms of the Global Security
Agreement (as defined in the GCNA Indenture) now owned or hereafter acquired and
(ii) Capital Stock of the Borrower, in each case, upon which a Lien is purported
to be created by any Security Document.
"Commitment Fee Rate": 1.0% per annum.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer, substantially in the form of Exhibit B.
"Continuing Directors": the directors of the Borrower on the Closing
Date and each other director of the Borrower, if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by at least 66-2/3% of the then Continuing Directors.
"Contractual Obligation": with respect to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
Property is bound.
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"Control Investment Affiliate": with respect to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
"Default": any of the events specified in Section 7, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": lawful currency of the United States of America.
"Eurocurrency Reserve Requirements": for any day, the aggregate
(without duplication) of the maximum rates (expressed as a decimal fraction) of
reserve requirements in effect on such day (including, without limitation,
basic, supplemental, marginal and emergency reserves) under any regulations of
the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period, the rate per annum determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the first day
of such Interest Period appearing on Page 3750 of the Telerate screen as of
11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of the
Telerate screen (or otherwise on such screen), the "Eurodollar Base Rate" for
purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Lender.
"Eurodollar Loans": Term Loans for which the applicable rate of
interest is based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period, a rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100th of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Existing Debt": as defined in Section 6.8 hereof.
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"Facility": Term Loan Commitments and Term Loans made thereunder.
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as 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 which is a Business Day, the average of the
quotations for the day of such transactions received by the Lender from three
federal funds brokers of recognized standing selected by it.
"FQ1", "FQ2 ", "FQ3", and "FQ4": when used with a numerical year
designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower.
"Funded Debt": with respect to any Person, all Indebtedness of such
Person of the types described in clauses (a) through (e) of the definition of
"Indebtedness" in this Section.
"GAAP": generally accepted accounting principles in the United States
of America as in effect from time to time.
"GAAP-UK": generally accepted accounting principles in the United
Kingdom as in effect from time to time.
"GCNA": Global Crossing North American Holdings, Inc.
"GCNA Indenture": means the Indenture dated as of December 9, 2003
entered into by GCNA, as issuer, the Parent and other guarantors referred to
therein, as guarantors and Xxxxx Fargo Bank Minnesota, N.A., as trustee,
pursuant to which GCNA issued $200,000,000 in 11% Senior Secured Notes Due 2006.
"GMS": Global Marine Services.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Granting Lender": as defined in Section 8.6(g).
"Guarantee": the Guarantee to be executed and delivered by each
Guarantor, substantially in the form of Exhibit A, as the same may be amended,
supplemented, replaced or otherwise modified from time to time.
"Guarantee Obligation": with respect to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, any bank under any letter of credit), if to
induce the creation of which the guaranteeing person has issued a reimbursement,
counterindemnity or similar obligation, in either case guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the
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guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any Property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase Property, securities or services primarily
for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; provided, however, that the term
Guarantee Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guarantee
Obligation of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee Obligation is made and (b) the maximum amount
for which such guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary obligation
and the maximum amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee Obligation
shall be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Guarantor": any Affiliate of the Borrower which executes the
Guarantee.
"Hedge Agreements": all interest rate or currency swaps, caps or
collar agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by the Borrower or its Subsidiaries providing for
protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.
"High Yield Securities": as defined in Section 2.6(a).
"Increased Commitment": as defined in Section 2.6(c).
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than trade
payables incurred in the ordinary course of such Person's business), (c) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to Property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such Property), (e) all Capital Lease Obligations or Synthetic Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party or applicant under acceptance, letter of credit
or similar facilities, (g) all obligations of such Person, contingent or
otherwise, to purchase, redeem, retire or otherwise acquire for value any
Capital Stock of such Person, (h) all Guarantee Obligations of such Person in
respect of obligations of the kind referred to in clauses (a) through (g) above;
(i) all obligations of the kind referred to in clauses (a) through (h) above
secured by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on Property (including,
without limitation, accounts and contract rights)
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owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation and (j) for the purposes of Section 7(e)
only, all obligations of such Person in respect of Hedge Agreements.
"Indemnified Liabilities": as defined in Section 8.5.
"Indemnitee": as defined in Section 8.5.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, state, multinational or foreign laws or otherwise,
including, without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, service-marks, technology, know-how
and processes, recipes, formulas, trade secrets, and all rights to xxx at law or
in equity for any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.
"Interest Payment Date": the last day of each calendar quarter, and
the date of any repayment or prepayment made in respect thereof.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one month thereafter; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending one month
thereafter; provided, that all of the foregoing provisions relating to Interest
Periods are subject to the following:
(a) if any Interest Period would otherwise end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;
(b) any Interest Period that would otherwise extend beyond the date
final payment is due on the Term Loans, shall end on such due date; and
(c) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of the calendar month at the end of such Interest
Period.
"Investments": as defined in Section 6.7.
"Lender": initially STTC; and after the Closing Date, any Person that
becomes a Lender pursuant to Section 8.6(c).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever
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(including, without limitation, any conditional sale or other title retention
agreement and any capital lease having substantially the same economic effect as
any of the foregoing).
"Loan Documents": this Agreement, the Security Documents and the
Notes.
"Loan Parties": the Parent, the Borrower, each Subsidiary of the
Borrower that is a party to a Loan Document and each Guarantor.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole or (b) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Lender hereunder or thereunder; provided, that a
change in economic conditions in the industry in which Borrower operates, a
change in law or other change that is not specific to Borrower shall not
constitute a Material Adverse Effect.
"Maturity Date": as defined in Section 2.3.
"Xxxxx'x": as defined in the definition of "Cash Equivalents" in this
Section 1.1.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of reasonable and customary attorneys' fees, accountants'
fees, investment banking fees, amounts required to be applied to the repayment
of Indebtedness secured by a Lien expressly permitted hereunder on any asset
which is the subject of such Asset Sale or Recovery Event (other than any Lien
pursuant to a Security Document) and other reasonable and customary fees and
expenses actually incurred in connection therewith and net of taxes paid or
reasonably estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), (b) in connection with any issuance or sale of equity securities
or debt securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of reasonable and customary
attorneys' fees, investment banking fees, accountants' fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith and (c) in connection with any Purchase Price
Refund, the cash amount thereof, net of any reasonable and customary expenses
incurred in the collection thereof.
"Non-Excluded Taxes": as defined in Section 2.12(a).
"Non-U.S. Lender": as defined in Section 2.12(d).
"Note": any promissory note evidencing any Term Loan.
"Obligations": the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Term Loans and
other obligations and interest accruing after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) the Term Loans, the
9
Obligations and all other obligations and liabilities of the Borrower to the
Lender or any Qualified Counterparty, 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, any other Loan
Document, any Specified Hedge Agreement or any other document made, delivered or
given in connection herewith or therewith, whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
(including, without limitation, all fees, charges and disbursements of counsel
to the Lender that are required to be paid by the Borrower pursuant hereto) or
otherwise; provided, that (i) obligations of the Borrower or any Subsidiary
under any Specified Hedge Agreement shall be secured and guaranteed pursuant to
the Security Documents only to the extent that, and for so long as, the other
Obligations are so secured and guaranteed and (ii) any release of Collateral or
Guarantors effected in the manner permitted by this Agreement shall not require
the consent of holders of obligations under Specified Hedge Agreements.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Parent": Global Crossing Limited.
"Participant": as defined in Section 8.6(b).
"Payment Office": the office specified from time to time by the Lender
as its payment office by notice to the Borrower.
"Permits": the collective reference to any and all other franchises,
licenses, leases, permits, approvals, notifications, certifications,
registrations, authorizations, exemptions, qualifications, easements, and rights
of way.
"Permitted Bank Transferee" shall mean a person carrying on a business
of banking that enters into this Agreement in the ordinary course of its
business within the meaning of Section 417(9) of the Income and Corporation
Xxxxx Xxx 0000 (Xxxxxx Xxxxxxx).
"Permitted Liens": the collective reference to (i) in the case of
Collateral other than Pledged Stock, Liens permitted by Section 6.2 and (ii) in
the case of Collateral consisting of Pledged Stock, non-consensual Liens
permitted by Section 6.2 to the extent arising by operation of law.
"Permitted Repayments of Intercompany Debt": cash generated from the
Borrower's operations in an aggregate amount not to exceed $42,000,000 that may
be used by the Borrower to repay, at any time after the Closing Date but on or
prior to December 31, 2004, intercompany loans owing by the Borrower to Bidco.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
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"Pledge Agreement": the charge over shares of the Borrower governed by
English law to be executed and delivered by Bidco, substantially in the form of
Exhibit I, as the same may be amended, supplemented, replaced or otherwise
modified from time to time.
"Pledged Stock": collectively, (i) all Investments constituting part
of the Charged Property (as each such term is defined in the Security Agreement)
and (ii) all Shares constituting part of the Charged Property (as each such term
is defined in the Pledge Agreement).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Purchase Price Refund": any amount received by the Borrower or any of
its Subsidiaries as a result of a purchase price adjustment or similar event in
connection with any acquisition of Property by the Borrower or any of its
Subsidiaries.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an Affiliate of a Lender.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any Property asset of the Borrower or any of its Subsidiaries.
"Register": as defined in Section 8.6(d).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reinvestment Notice": a written notice executed by a Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Wholly Owned
Subsidiary) intends and expects to use all or a specified portion of the Net
Cash Proceeds of an Asset Sale, Purchase Price Refund or Recovery Event to
acquire assets useful in its or such Subsidiary's business.
"Related Fund": with respect to any Lender, any fund that (x) invests
in commercial loans and (y) is managed or advised by the same investment advisor
as such Lender, by such Lender or an Affiliate of such Lender.
"Required Lenders": at any time, the holders of more than 50% of the
sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Term Loan Commitments then in effect.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or 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.
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"Responsible Officer": as to any Person, the chief executive officer,
president or chief financial officer of such Person, but in any event, with
respect to financial matters, the chief financial officer of such Person or
equivalent title. Unless otherwise qualified, all references to a "Responsible
Officer" shall refer to a Responsible Officer of the Borrower.
"Restricted Payments": as defined in Section 6.5.
"S&P": as defined in the definition of "Cash Equivalents" in this
Section 1.1.
"SEC": the Securities and Exchange Commission, an agency of the United
States of America (or successors thereto or an analogous Governmental
Authority).
"Security Agreement": the debenture governed by English law to be
executed and delivered by the Borrower, substantially in the form of Exhibit D,
as the same may be amended, supplemented, replaced or otherwise modified from
time to time.
"Security Documents": the collective reference to the Guarantee,
Security Agreement, the Pledge Agreement, any intellectual property security
agreements or control agreements required to be delivered pursuant to the
Security Agreement or any other Loan Document and all other security documents
hereafter delivered to the Lender granting a Lien on any Property of any Person
to secure the obligations and liabilities of any Loan Party under any Loan
Document.
"Solvent": with respect to any Person, as of any date of
determination, (a) the Directors of such Person could reasonably determine that
such Person can avoid insolvent liquidation, (c) such Person will not have, as
of such date, an unreasonably small amount of capital with which to conduct its
business, (d) such Person will be able to pay its debts as they mature and (e)
such Person is not insolvent within the meaning of any applicable Requirements
of Law.
"SPC": as defined in Section 8.6(g).
"Specified Hedge Agreement": any Hedge Agreement entered into by the
Borrower or any Guarantor and any Qualified Counterparty.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company 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. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Synthetic Lease Obligations": all monetary obligations of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations
which do not appear on the balance sheet of such
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Person but which, upon the insolvency or bankruptcy of such Person, would be
characterized as the Indebtedness of such Person (without regard to accounting
treatment).
"Term Loan": as defined in Section 2.1.
"Term Notes": as defined in Section 2.4(d).
"Term Loan Commitment": the obligation of any Lender to make Term
Loans to the Borrower hereunder in a principal amount not to exceed the amount
set forth under the heading "Term Loan Commitment" opposite such Lender's name
on the signature page hereof, as such Term Loan Commitment may be increased
pursuant to Section 2.6(c) or, as the case may be, in the Assignment and
Acceptance pursuant to which such Lender became a party hereto, as the same may
be changed from time to time pursuant to the terms hereof;
"Transferee": as defined in Section 8.14.
"Treasury Report": as defined in Section 5.2(b).
"Type": as to any Term Loan, its nature as a Base Rate Loan or a
Eurodollar Loan.
"UCC": the Uniform Commercial Code, as in effect from time to time in
any jurisdiction.
"Working Capital Facility": any revolving credit agreement entered
into by GCNA the proceeds of which are to be used for working capital purposes.
"Wholly Owned Subsidiary": as to any Person, any other Person all of
the Capital Stock of which (other than directors' qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"Wholly Owned Subsidiary Guarantor": any Subsidiary Guarantor that is
a Wholly Owned Subsidiary of the Borrower.
1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the defined meanings when used in the other Loan Documents
or any certificate or other document made or delivered pursuant hereto or
thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to the Borrower and its Subsidiaries not defined in
Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP or
GAAP-UK, as the context requires.
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any
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particular provision of this Agreement, and Section, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms (including,
without limitation, in the event that there shall be more than one Lender
hereunder as a result of an assignment under Section 8.6(c), then all references
to the "Lender" shall be to the "Lenders").
(e) The expressions "payment in full," "paid in full" and any other
similar terms or phrases when used herein with respect to the Obligations shall
mean the payment in full, in immediately available funds, of all of the
Obligations.
SECTION 2.
AMOUNT AND TERMS OF COMMITMENT
2.1 Term Loan Commitment.
(a) Subject to the terms and conditions hereof, the Lender agrees to
make term loans (each, a "Term Loan") to the Borrower on the Closing Date and
such other dates as may be specified in any Borrowing Notice in amount not to
exceed the lesser of (a) the amount of the Term Loan Commitment of such Lender
and (b) such Lender's pro rata share of the Available Commitment. Unless the
conditions set forth in Section 2.9 or Section 2.14 shall exist, Term Loans will
be Eurodollar Loans.
(b) Notwithstanding the foregoing, the Lender's obligation to advance
Term Loans (i) on or prior to the first Business Day of June, 2004 shall not
exceed $40,000,000, (ii) after the first Business Day of June, 2004, but on or
prior to the first Business Day of August, 2004, shall not exceed $40,000,000
and (iii) after the first Business Day of August, 2004, but on or prior to the
first Business Day of October, 2004 shall not exceed $20,000,000. To the extent
any amounts permitted to be borrowed as specified in the immediately preceding
sentence are not borrowed in accordance with Section 2.2 and within the
applicable time periods set forth above, the Term Loan Commitment shall be
immediately reduced by such amounts that are not borrowed within the relevant
period specified in the preceding sentence.
2.2 Procedure for Term Loan Borrowing.
The Borrower shall deliver to the Lender a Borrowing Notice (which
Borrowing Notice must be received by the Lender prior to 10:00 A.M., New York
City time, one Business Day prior to the anticipated Closing Date with respect
to the borrowing on the Closing Date and three Business Days prior to the date
of any subsequent borrowing (a "Borrowing Date")) requesting that the Lender
make the Term Loans on the Closing Date (or such other day after the Closing
Date with respect to any Borrowing Date) and specifying the amount to be
borrowed, which amount shall be in a minimum amount of $1,000,000. Subject to
Section 4, not later than 12:00 Noon, New York City time, on each Borrowing
Date, the Lender shall make available to
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the Borrower in immediately available funds an amount equal to lesser of (a) the
amount requested by the Borrower in its Borrowing Notice and (b) the Available
Commitment.
2.3 Repayment of Term Loans.
The Term Loans of each Lender shall mature on December 31, 2004 (the
"Maturity Date"). The Borrower hereby unconditionally promises to pay to the
Lender, the principal amount of each Term Loan no later than December 31, 2004
(or on such earlier date on which the Term Loans become due and payable pursuant
to Section 7). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Term Loans from time to time outstanding from the date
hereof until payment in full thereof at the rates per annum, and on the dates,
set forth in Section 2.7.
2.4 Evidence of Debt.
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Term Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(b) Each Lender, on behalf of the Borrower, shall maintain a Register
in which shall be recorded (i) the amount of each Term Loan made hereunder and
any Note evidencing such Term Loan, the Type of such Term Loan and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Lender hereunder from the
Borrower and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.4(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender to maintain the Register or any such account, or any error
therein, shall not in any manner affect the obligation of the Borrower to repay
(with applicable interest) the Term Loans made to the Borrower by such Lender in
accordance with the terms of this Agreement.
(d) The Borrower agrees that, upon written request by any Lender, the
Borrower will promptly execute and deliver to such Lender a promissory note of
the Borrower evidencing any Term Loans of such Lender, substantially in the form
of Exhibit G (a "Term Note"), with appropriate insertions as to date and
principal amount.
2.5 Optional Prepayments.
The Borrower may at any time and from time to time prepay the Term
Loans, in whole or in part, without premium or penalty (except as otherwise
provided herein), upon irrevocable notice delivered to the Lender at least five
Business Days prior thereto in the case of Eurodollar Loans and at least three
Business Day prior thereto in the case of Base Rate Loans, which notice shall
specify the date and amount of such prepayment and whether such prepayment is of
Eurodollar Loans or Base Rate Loans; provided, that if a Eurodollar Loan is
15
prepaid on any day other than the last day of the Interest Period applicable
thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.13.
Upon receipt of any such notice the Lender shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with accrued
interest to such date on the amount prepaid. Partial prepayments of Term Loans
shall be in an aggregate principal amount of $1,000,000 or a whole multiple
thereof.
2.6 Mandatory Prepayments.
(a) Unless the Lender shall otherwise agree, if any Capital Stock
shall be issued, or Indebtedness incurred, by the Borrower or any of its
Subsidiaries (excluding any Indebtedness incurred in accordance with Section 6.1
as in effect on the date of this Agreement), then on the date of such issuance
or incurrence, the Term Loans shall be prepaid by an amount equal to the amount
of the Net Cash Proceeds of such issuance or incurrence; provided, that if the
Indebtedness incurred by the Borrower is through a direct or indirect public
offering or private placement of debt securities in such form and having
guarantees, covenants, default and subordination provisions, if any, and other
terms as are acceptable to the Lender (the "High Yield Securities") then at the
option of the Lender (to be exercised in its sole discretion), the Borrower will
repay the Term Loans by issuing such High Yield Securities in an aggregate
principal amount equal to the aggregate principal amount of Term Loans so
extended. The provisions of this Section do not constitute a consent to the
issuance of any equity securities by any entity whose equity securities are
pledged pursuant to the Security Agreement, or a consent to the incurrence of
any Indebtedness by the Borrower or any of its Subsidiaries.
(b) Unless the Lender shall otherwise agree, if on any date the
Borrower or any of its Subsidiaries shall receive Net Cash Proceeds from any
Asset Sale, Purchase Price Refund or Recovery Event then, unless the Borrower
(i) delivers a Reinvestment Notice to the Lender within 30 days of the receipt
of such Net Cash Proceeds and (ii) complies with Section 9.03 and Section 9.04
of the GCNA Indenture and delivers to the Lender copies of all documents
required to be delivered to Xxxxx Fargo Bank Minnesota, N.A. as trustee under
the GCNA Indenture pursuant to Section 9.03 and Section 9.04 of the GCNA
Indenture, the Term Loans shall be prepaid by an amount equal to the amount of
such Net Cash Proceeds. Notwithstanding the foregoing, unless the Lender shall
otherwise agree, any Net Cash Proceeds that are not used by the Borrower in
accordance with Section 9.03 and Section 9.04 of the GCNA Indenture shall be
promptly applied to the repayment of the Term Loans. The provisions of this
Section do not constitute a consent to the consummation of any Disposition not
permitted by Section 6.4.
(c) In the event that STTC assigns all of its rights and obligations
hereunder pursuant to Section 8.6(c) and such assignment occurs prior to the
payment of all Permitted Repayments of Intercompany Debt, then notwithstanding
anything to the contrary in Section 2.1 or the definition of "Term Loan
Commitment", the Term Loan Commitment of the Lender shall automatically be
increased by an amount equal to $42,000,000 less payments made prior to the
assignment of STTC's rights and obligation under Section 8.6 (c) of Permitted
Repayments of Intercompany Debt (such amount, the "Increased Commitment"). In
the event that the Term Loans Commitments are increased by the Increased
Commitment pursuant to this Section 2.6(c), the Borrower shall immediately
deliver to the Lender a Borrowing Notice requesting that the Lender make
advances of Term Loans in an amount equal to the Increased Commitment. Upon
16
receipt of such Borrowing Notice, each Lender shall immediately make available
to the Borrower, in immediately available funds, its pro-rata share of the
Increased Commitment. The principal amount of any Term Note issued to such
assignee of STTC's rights and obligations pursuant to Section 8.6(c) shall
reflect the Increased Commitment in addition to the Term Loan Commitments and/or
principal amount of Term Loans assigned by STTC. Notwithstanding anything to the
contrary in this Agreement, the Borrower shall not be required to satisfy any of
the conditions set forth in Section 4 in connection with the Lender's
obligations to make available to the Borrower the Increased Amount in accordance
with this Section 2.6 (c).
2.7 Interest Rates, Payment Dates and Fees.
(a) Each Eurodollar Loan shall bear interest for each day during each
Interest Period with respect thereto at a rate per annum equal to the Eurodollar
Rate determined for such day plus the Applicable Margin in effect for such day.
(b) Each Base Rate Loan shall bear interest for each day on which it
is outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin in effect for such day.
(c) If all or a portion of the principal amount of any Term Loan or
Obligations or interest on any Term Loan, Obligations or the commitment fee
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), all outstanding Term Loans and Obligations (whether or not overdue)
(to the extent legally permitted) shall bear interest at a rate per annum that
is equal to (x) in the case of the Term Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 2.7 plus
2.0%) from the date of such non-payment until such amount is paid in full (after
as well as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date; provided, that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
(e) The Borrower agrees to pay to the Lender a commitment fee for the
period from and including the Closing Date to the Maturity Date, computed at the
Commitment Fee Rate on the average daily amount of the Available Commitment,
payable quarterly in arrears on the last day of each calendar quarter,
commencing in June, 2004.
2.8 Computation of Interest and Fees.
(a) Interest, fees, commissions payable pursuant hereto shall be
calculated on the basis of a 360-day year for the actual days elapsed, except
that, with respect to Base Rate Loans on which interest is calculated on the
basis of the Prime Rate, the interest thereon shall be calculated on the basis
of a 365- (or 366-, as the case may be) day year for the actual days elapsed.
The Lender shall as soon as practicable notify the Borrower of each
determination of a Eurodollar Rate. Any change in the interest rate on a Term
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Lender shall as soon as practicable
notify the Borrower of the effective date and the amount of each such change in
interest rate.
17
(b) Each determination of an interest rate by the Lender pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lender in the absence of manifest error. The Lender shall, at the
request of the Borrower, deliver to the Borrower a statement showing the
quotations used by the Lender in determining any interest rate pursuant to
Section 2.7(a).
2.9 Inability to Determine Interest Rate.
If prior to the first day of any Interest Period, the Lender shall
have determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Lender shall give telecopy or telephonic notice
thereof to the Borrower as soon as practicable thereafter. If such notice is
given (y) any Eurodollar Loans requested to be made on the first day of such
Interest Period shall be made as Base Rate Loans and (z) any outstanding
Eurodollar Loans under the Facility shall be converted, on the last day of the
then current Interest Period with respect thereto, to Base Rate Loans. Until
such notice has been withdrawn by the Lender, no further Eurodollar Loans under
the relevant Facility shall be made or continued as such.
2.10 Payments.
(a) Amounts prepaid on account of the Term Loans may not be
reborrowed.
(b) The application of any payment of Term Loans under the Facility
(including optional and mandatory prepayments) shall be made, first, to Base
Rate Loans and, second, to Eurodollar Loans. Each payment of the Term Loans
shall be accompanied by accrued interest to the date of such payment on the
amount paid.
(c) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Lender, at the Payment
Office, in Dollars and in immediately available funds. Any payment made by the
Borrower after 12:00 Noon, New York City time, on any Business Day shall be
deemed to have been on the next following Business Day. If any payment hereunder
(other than payments on the Eurodollar Loans) becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a Eurodollar Loan becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day unless the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day. In the case of any
extension of any payment of principal pursuant to the preceding two sentences,
interest thereon shall be payable at the then applicable rate during such
extension.
2.11 Requirements of Law.
(a) If the adoption of or any change in any Requirement of Law or in
the interpretation or application thereof or compliance by any Lender with any
request or directive
18
(whether or not having the force of law) from any central bank or other
Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with
respect to this Agreement or any Eurodollar Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.12 and changes in the rate of tax
on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans, or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender on an after-tax basis for such increased cost or reduced
amount receivable. If any Lender becomes entitled to claim any additional
amounts pursuant to this Section, it shall promptly notify the Borrower of the
event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, after submission by such Lender to the
Borrower of a written request therefor, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
corporation for such reduction on an after-tax basis.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower shall be conclusive in the
absence of manifest error. The obligations of the Borrower pursuant to this
Section shall survive the termination of this Agreement and the payment of the
Term Loans and all other amounts payable hereunder.
2.12 Taxes.
(a) All payments made by the Borrower under this Agreement or any
other Loan Documents shall be made free and clear of, and without deduction or
withholding for or on
19
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on the Lender as a result of a present or former connection between the
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Lender's having executed, delivered or
performed its obligations or received a payment under, or enforced, this
Agreement or any other Loan Document). If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings ("Non-Excluded
Taxes") or any Other Taxes are required to be withheld from any amounts payable
to the Lender hereunder, the amounts so payable to the Lender shall be increased
to the extent necessary to yield to the Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower or any Guarantor shall not be required to increase
any such amounts payable to the Lender with respect to any Non-Excluded Taxes
that are attributable to the Lender's failure to comply with the requirements of
paragraph (d) of this Section 2.12. The Borrower or the applicable Guarantor
shall make any required withholding and pay the full amount withheld to the
relevant tax authority or other Governmental Authority in accordance with
applicable Requirements of Law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Lender a certified copy of an original official receipt received by the Borrower
showing payment thereof. If the Borrower fails to pay any Non-Excluded Taxes or
Other Taxes when due to the appropriate taxing authority or fails to remit to
the Lender the required receipts or other required documentary evidence, the
Borrower shall indemnify the Lender for any incremental taxes, interest or
penalties that may become payable by the Lender as a result of any such failure.
The agreements in this Section shall survive the termination of this Agreement
and the payment of the Term Loans and all other amounts payable hereunder.
(d) A Lender that is entitled to an exemption from or reduction of
withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower, at the time or
times prescribed by applicable law and reasonably requested by the Borrower,
such properly completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or 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.
2.13 Indemnity.
The Borrower agrees to indemnify each Lender for, and to hold each
Lender harmless from, any loss or expense that such Lender may sustain or incur
as a consequence of
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(a) default by the Borrower in making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement, (b)
default by the Borrower in making any prepayment after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment or conversion of Eurodollar Loans on a day that is not
the last day of an Interest Period with respect thereto. Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
that would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Term Loans provided for herein (excluding, however,
the Applicable Margin included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) that would have accrued to such Lender
on such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank Eurodollar market. A certificate as to any
amounts payable pursuant to this Section 2.13 submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Term Loans and
all other amounts payable hereunder.
2.14 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
shall make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement, (a) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate
Loans to Eurodollar Loans shall forthwith be canceled and (b) such Lender's
Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to Base Rate Loans on the respective last days of the then current
Interest Periods with respect to such Term Loans or within such earlier period
as required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 2.13.
2.15 Change of Lending Office.
Each Lender agrees that, upon the occurrence of any event giving rise
to the operation of Section 2.11, 2.12(a) or 2.14 with respect to such Lender,
it will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another lending
office for any Term Loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage; provided,
further, that nothing in this Section 2.15 shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section
2.11, 2.12(a) or 2.14.
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SECTION 3.
REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Agreement and to make the Term
Loans, the Borrower represents and warrants to the Lender that:
3.1 Financial Condition.
(a) The unaudited draft balance sheets of the Borrower as at December
31, 2003, and the related draft statements of income and of cash flows for the
fiscal year ended on such date, present fairly the financial condition of the
Borrower as at such date, and the results of its operations and its cash flows
for the fiscal year then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with
GAAP-UK applied consistently throughout the periods involved. The Borrower and
its Subsidiaries do not have any material Guarantee Obligations, contingent
liabilities and liabilities for taxes, or any long-term leases or unusual
forward or long-term commitments, including, without limitation, any interest
rate or foreign currency swap or exchange transaction or other obligation in
respect of derivatives, that are not reflected in the most recent financial
statements referred to in this paragraph.
(b) The unaudited draft balance sheet as of April 30, 2004 prepared
for consolidation by the Parent with respect to the Borrower's business, and the
related unaudited draft statements of income for the four-month period ended on
such date, present fairly the financial condition of the Borrower as at such
date, and the results of its operations for the four-month period then ended
(subject to normal year-end audit adjustments). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved.
3.2 Corporate Existence; Compliance with Law.
Each of the Loan Parties (a) is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of Property or the conduct of its business
requires such qualification, except to the extent that the failure to comply
therewith would not reasonably be expected to have a Material Adverse Effect,
and (d) is in compliance with all Requirements of Law (other than, in the case
of the Parent and certain of its Affiliates, periodic reporting requirements
with the SEC), except to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
3.3 Corporate Power; Authorization; Enforceable Obligations.
Each Loan Party has the corporate power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a party
and, in the case of the Borrower, to borrow hereunder. Each Loan Party has taken
all necessary corporate or other
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action to authorize the execution, delivery and performance of the Loan
Documents to which it is a party and, in the case of the Borrower, to authorize
the borrowings on the terms and conditions of this Agreement. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with the
borrowings hereunder or the execution, delivery, performance, validity or
enforceability of this Agreement or any of the other Loan Documents except (i)
consents, authorizations, filings and notices described in Schedule 3.3, which
consents, authorizations, filings and notices have been obtained or made and are
in full force and effect and (ii) the filings referred to in Section 3.15. Each
Loan Document has been duly executed and delivered on behalf of each Loan Party
that is a party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party that is a party thereto, enforceable against each such Loan
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
3.4 No Legal Bar.
The execution, delivery and performance of this Agreement and the
other Loan Documents, the borrowings hereunder and the use of the proceeds
thereof will not violate any Requirement of Law or any Contractual Obligation of
the Borrower or any of its Subsidiaries and will not result in, or require, the
creation or imposition of any Lien on any of their respective properties or
revenues pursuant to any Requirement of Law or any such Contractual Obligation
(other than the Liens created by the Security Documents). No Requirement of Law
or Contractual Obligation applicable to the Borrower or any of its Subsidiaries
could reasonably be expected to have a Material Adverse Effect.
3.5 No Material Litigation.
No litigation, investigation or proceeding of or before any arbitrator
or Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of their respective properties or revenues (a) with respect to any of the Loan
Documents or any of the transactions contemplated hereby or thereby, or (b) that
could reasonably be expected to have a Material Adverse Effect.
3.6 No Default.
Neither the Borrower nor any of its Subsidiaries is in default under
or with respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
3.7 Ownership of Property; Liens.
Each of the Borrower and its Subsidiaries is the sole owner of,
legally and beneficially, and has good marketable and insurable title in fee
simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other Property, and none of
such Property is subject to any claims, liabilities, obligations, charges or
23
restrictions of any kind, nature or description or to any Lien except for
Permitted Liens. None of the Pledged Stock is subject to any Lien except for
Permitted Liens.
3.8 Intellectual Property.
The Borrower and each of its Subsidiaries owns, or is licensed, or has
the consent of an Affiliate, to use, all Intellectual Property necessary for the
conduct of its business as currently conducted except to the extent that failure
to be so licensed would not reasonably be expected to have a Material Adverse
Effect. No material claim which if adversely determined would reasonably be
expected to have a material Adverse Effect has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
3.9 Taxes.
Each of the Borrower and its Subsidiaries has filed or caused to be
filed all material tax returns that are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its Property and all other taxes, fees or other charges
imposed on it or any of its Property by any Governmental Authority (other than
any the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP-UK have been provided on the books of the Borrower or its Subsidiaries, as
the case may be); and no tax Lien has been filed, and, to the knowledge of and
the Borrower, no claim is being asserted, with respect to any such tax, fee or
other charge except claims which, if successfully asserted, would not reasonably
be expected to have a Material Adverse Effect.
3.10 Federal Regulations.
No part of the proceeds of any Term Loans will be used for
"purchasing" or "carrying" any "margin stock" within the respective meanings of
each of the quoted terms under Regulation U as now and from time to time
hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Lender, the Borrower
will furnish to the Lender and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
Regulation U.
3.11 Investment Company Act; Other Regulations.
No Loan Party is an "investment company", or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended. No Loan Party is subject to regulation under any Requirement
of Law (other than Regulation X of the Board) which limits its ability to incur
Indebtedness.
3.12 Subsidiaries.
(a) The Subsidiaries listed on Schedule 3.12 constitute all the
Subsidiaries of the Borrower as of the Closing Date.
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(b) There are no outstanding subscriptions, options, warrants, calls,
rights or other agreements or commitments (other than stock options granted to
employees or directors and directors' qualifying shares) of any nature relating
to any Capital Stock of the Borrower or any Subsidiary.
3.13 Use of Proceeds.
The proceeds of the Term Loans shall be used to repay demand loans
owed by Borrower to Bidco and fees payable in connection with this Agreement and
will not be used in a manner that would violate sections 151-158 of The
Companies Act 1985 (United Kingdom).
3.14 Accuracy of Information, etc.
No statement or information contained in this Agreement, any other
Loan Document or any other document, certificate or statement furnished to the
Lender, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished, any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lender that such financial information as
it relates to future events is not to be viewed as fact and that actual results
during the period or periods covered by such financial information may differ
from the projected results set forth therein by a material amount. Other than
information in the public domain, there is no fact known to any Loan Party that
could reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents or in any other
documents, certificates and statements furnished to the Lender for use in
connection with the transactions contemplated hereby and by the other Loan
Documents.
3.15 Security Documents.
(a) The Security Agreement is effective to create in favor of the
Lender a legal, valid, binding and enforceable security interest in the
Collateral described therein and proceeds and products thereof. In the case of
the Pledged Stock, when any stock certificates representing such Pledged Stock
are delivered to the Lender, and in the case of the other Collateral described
in the Security Agreement, when appropriate forms are filed in the offices
specified on Schedule 3.15 (which forms may be filed by the Lender) at any time
and such other filings as are specified in the Security Agreement have been
completed (all of which filings may be filed by the Lender) at any time, the
Security Agreement shall create a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in such Collateral and the
proceeds and products thereof, as security for the Secured Obligations (as
defined in each of the Security Agreement and the Pledge Agreement), in each
case prior and superior in right to any other Person (except Permitted Liens).
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3.16 Insurance.
Each of the Borrower and its Subsidiaries is insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which it is engaged,
including, without limitation, $100,000,000 of general liability insurance; and
none of the Borrower or any of its Subsidiaries (i) has received notice from any
insurer or agent of such insurer that substantial capital improvements or other
material expenditures will have to be made in order to continue such insurance
or (ii) has any reason to believe that it will not be able to renew its existing
insurance coverage as and when such coverage expires or to obtain similar
coverage from similar insurers at a cost that could not reasonably be expected
to have a Material Adverse Effect.
3.17 Change of Control.
The pledge of the Pledged Stock will not result in a "change of
control" as such phrase is defined under any of the Borrower's or the Parent's
indentures, loan agreements, mortgages, leases or other agreements or
instruments to which the Borrower or the Parent is a party or by which the
Borrower or the Parent or their respective properties are bound; provided,
however, that the Borrower makes no representation or warranty that the
enforcement of the Lender's rights and remedies under the Pledge Agreement or
the Security Agreement will not result in a "change of control".
3.18 Finance Committee Approval.
The Ad Hoc Finance Committee of the Parent's Board of Directors has
reviewed the terms of this Agreement and the Loan Documents as well as the
Summary of Terms of Interim Loans (draft dated 5/17/04) and approved such
documents.
3.19 Bonuses.
On any date in 2004 prior to the Closing Date, neither Parent nor any
of its Subsidiaries paid any bonus to any of their respective directors,
officers or employees other than the "welcome bonus" paid in February 2004,
ordinary sales commissions, and employee recognition awards payable to a small
number of employees outside of the scope of an annual bonus program, which
awards in any case, did not exceed $350,000.
3.20 Existing Indebtedness.
Schedule 6.1(b) hereto sets forth all Indebtedness of the Borrower
existing as of the date hereof.
SECTION 4.
CONDITIONS PRECEDENT
4.1 Conditions to Initial Extension of Credit.
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The agreement of each Lender to make the initial Term Loans requested
to be made by it hereunder is subject to the satisfaction, prior to or
concurrently with the making of such initial Term Loans on the Closing Date, of
the following conditions precedent:
(a) Loan Documents. The Lender shall have received (i) this Agreement,
executed and delivered by a duly authorized officer of the Borrower, (ii) the
Guarantee, executed and delivered by a duly authorized officer of each
Guarantor, (iii) the Security Agreement, executed and delivered by a duly
authorized officer of the Borrower and (iv) the Pledge Agreement, executed and
delivered by a duly authorized officer of Bidco, in each case, in form and
substance satisfactory to the Lender.
(b) Financial Statements. The Lender shall have received (i) audited
financial statements of the Borrower and its Subsidiaries for the 2003 fiscal
year provided that the foregoing financial statements may be unaudited if the
Borrower's auditor has advised the Lender the sole reason preventing the
delivery of audited financial statements is the conclusion of cost of access
review set forth in Section 4.1(d), (ii) unaudited interim financial statements
prepared for the Parent's consolidation with respect to Borrower's business for
each fiscal month and quarterly period ended subsequent to the date of the
latest applicable financial statements delivered pursuant to clause (i) of this
paragraph as to which such financial statements are available; and such
financial statements shall not, in the reasonable judgment of the Lender,
reflect any material adverse change in the financial condition of the Borrower,
as reflected in the financial statements or projections, and (iii) unaudited
consolidated financial statements of the Parent (which shall exclude GMS) for
each fiscal month and quarterly period ended since December 31, 2003 as to which
such financial statements are available. All such financial statements,
including the related schedules and notes thereto, shall have been prepared in
accordance with GAAP in the case of (ii) and (iii) and GAAP-UK, in the case of
(i) and all financial statements prepared in accordance with GAAP-UK required to
be delivered hereunder shall be reconciled to and in accordance with, applied
consistently throughout the periods involved and shall be substantially the same
as the draft financial statements delivered pursuant to Section 3.1 as
determined by the Lender in its sole discretion.
(c) Fees. The Lender shall have received all fees required to be paid,
and all expenses for which invoices have been presented, on or before the
Closing Date. All such amounts will be paid with proceeds of Term Loans made on
the Closing Date and will be reflected in the funding instructions given by the
Borrower to the Lender on or before the Closing Date.
(d) Cost of Access Review. The Lender shall have received a report, in
form and substance satisfactory to the Lender, from Deloitte and Touche on the
investigation conducted on current cost of access liability issues with respect
to the Parent.
(e) Lien Searches. The Lender shall have received the results of
recent lien searches against the Borrower and Bidco in England, and such search
shall reveal no Liens on any of the assets of the Borrower or Bidco, except for
Permitted Liens.
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(f) Closing Certificate. The Lender shall have received a certificate
of each Loan Party, dated the Closing Date, in form and substance satisfactory
to the Lender, with appropriate insertions and attachments.
(g) Other Certifications. The Lender shall have received the following:
(i) a copy of the charter of each Loan Party and each amendment
thereto, certified (as of a date reasonably near the date of the initial
extension of credit) as being a true and correct copy thereof by the
Secretary of State or other applicable Governmental Authority of the
jurisdiction in which each such Loan Party is organized or a certificate
from a duly authorized officer of the Parent or such Loan Party confirming
that the charter documents of such Loan Party have not been amended since
the delivery of such charter documents to Xxxxx Fargo Bank Minnesota, N.A.
as trustee in connection with the GCNA Indenture;
(ii) a copy of a certificate of the Secretary of State or other
applicable Governmental Authority of the jurisdiction in which each Loan
Party is organized, dated reasonably near the date of the initial extension
of credit, listing the charter such Loan Party and each amendment thereto
on file in such office and certifying that (A) such amendments are the only
amendments to such Loan Party's charter on file in such office, (B) such
Loan Party has paid all franchise taxes to the date of such certificate and
(C) such Loan Party is duly organized and in good standing under the laws
of such jurisdiction; and
(iii) to the extent available in each relevant jurisdiction, an
electronic confirmation from the Secretary of State or other applicable
Governmental Authority of each jurisdiction in which each such Loan Party
is organized certifying that such Loan Party is duly organized and in good
standing under the laws of such jurisdiction on the date of the initial
extension of credit, prepared by, or on behalf of, a filing service
acceptable to the Lender.
(h) Legal Opinions. The Lender shall have received executed legal
opinions of (i) Weil, Gotshal & Xxxxxx LLP, counsel to the Borrower, its
Subsidiaries and the Guarantor (ii) Bermuda counsel, counsel to Loan Parties
organized in Bermuda and (iii) Irish counsel, counsel to Loan Parties organized
in Ireland, in each case, addressing such matters incident to the transactions
contemplated by this Agreement as the Lender may reasonably require and which is
in form and substance satisfactory to the Lender.
(i) Consents. The Lender shall have received a list specifying each of
the Borrower's and Parent's indentures, loan agreements, mortgages, leases or
other agreements or instruments to which the Borrower or the Parent is a party
or by which the Borrower or the Parent or their respective properties are bound,
in each case that are material, which if the Lender exercised enforcement rights
or remedies under the Pledge Agreement or the Security Agreement a "change of
control" provision under such documents would be applicable.
(j) Filings, Registrations and Recordings. Each document required by
the Security Documents or under law or as reasonably requested by the Lender to
be filed, registered
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or recorded in order to create in favor of the Lender a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Permitted Liens), shall have been filed, registered
or recorded or shall have been delivered to the Lender be in proper form for
filing, registration or recordation.
(k) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct as of such earlier date.
(l) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.
(m) Miscellaneous. The Lender shall have received such other documents,
agreements, certificates and information as it shall reasonably request.
4.2 Conditions to Each Subsequent Extension of Credit.
The agreement of each Lender to make any extension of credit requested
to be made by it hereunder on any Borrowing Date (other than the Closing Date)
is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date,
except for representations and warranties expressly stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct as of such earlier date.
(b) No Default. No Default or Event of Default shall have occurred and
be continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.
(c) The Borrower shall have delivered a business plan for the Parent
and the Borrower that has been approved by the Parent's Board of Directors.
(d) Financial Reports. (i) The information set forth in each Treasury
Report delivered to the Lender in accordance with Section 5.2 (b) is no less
than the corresponding amounts for such periods as set forth in Schedule 5.2 (b)
and (ii) if Borrower did not deliver audited financial statements of the
Borrower and its Subsidiaries for the 2003 fiscal year prepared in accordance
with GAAP-UK under the circumstances set forth in Section 4.1(b)(i), the
Borrower shall have delivered the audited financial statements of the Borrower
and its subsidiaries for the 2003 fiscal year prepared in accordance with
GAAP-UK. The measurement periods for the Adjusted EBITDA and the Capital
Expenditure plus Capital Lease tests under this Section 4.2(d) shall be
cumulative year to date but shall end on the last full calendar month next
preceding the date of delivery of the Treasury Report.
29
(e) Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such extension of
credit that the conditions contained in this Section 4.2 have been satisfied.
SECTION 5.
AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Term Loan Commitment
remains in effect, or any Term Loan or other amount is owing to the Lender, the
Borrower shall and shall cause each of its Subsidiaries to, and Parent, with
respect to Section 5.2(b) and Section 5.2(c), shall:
5.1 Financial Statements. Furnish to the Lender:
(a) as soon as available, but in any event not later than 45 days after
the end of each of FQ2 and FQ3 of 2004, the unaudited consolidated, if
applicable, balance sheet of the Borrower and its Subsidiaries as at the end of
such quarter and the related unaudited consolidated, if applicable, statements
of income and of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative form
the figures as of the end of and for the corresponding period in the previous
year, certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);
(b) as soon as available, but in any event not later than 30 days after
the end of each month occurring prior to the Maturity Date (other than the sixth
and ninth such months), the unaudited consolidated, if applicable, balance
sheets of the Borrower and its Subsidiaries as at the end of such month and the
related unaudited consolidated, if applicable, statements of income and of cash
flows for such month and the portion of the fiscal year through the end of such
month, setting forth in each case in comparative form the figures as of the end
of and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments); and
(c) In the event the Parent does not file a 10-Q with the SEC for FQ2
or FQ3 of 2004, (i) as soon as available, but in any event not later than 45
days after the end of each of FQ2 and FQ3 of 2004, the unaudited consolidated
balance sheet of the Parent and its Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash flows
for such quarter and the portion of the fiscal year through the end of such
quarter, setting forth in each case in comparative form the figures as of the
end of and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments); and (ii) as soon as available, but in any
event not later than 30 days after the end of each month occurring prior to the
Maturity Date (other than the sixth and ninth such months), the unaudited
consolidated balance sheets of the Parent as at the end of such month and the
related unaudited consolidated statements of income and of cash flows for such
month and the portion of the fiscal year through the end of such month, setting
forth in each case in comparative form the figures as of the end of
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and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP or
GAAP-UK, as the case may be, provided that all such financial statements
prepared in accordance with GAAP-UK required to be delivered hereunder shall
also be reconciled to GAAP, applied consistently throughout the periods
reflected therein and with prior periods (except as approved by such accountants
or officer, as the case may be, and disclosed therein).
5.2 Certificates; Other Information.
Furnish to the Lender:
(a) concurrently with the delivery of any financial statements pursuant
to Section 5.1, (i) a certificate of a Responsible Officer stating that, to the
best of such Responsible Officer's knowledge, each Loan Party during such period
has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the case of
monthly, quarterly or annual financial statements, (x) a Compliance Certificate
containing all information necessary for determining compliance by the Borrower
and its Subsidiaries with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the Borrower, as the
case may be, (y) to the extent not previously disclosed to the Lender, in
writing, a listing of any county, state, territory, province, region or any
other jurisdiction, or any political subdivision thereof where the Borrower
keeps material inventory or equipment and of any Intellectual Property acquired
by the Borrower since the date of the most recent list delivered pursuant to
this clause (y) (or, in the case of the first such list so delivered, since the
Closing Date) and (z) any filings specified in such Compliance Certificate as
being required to be delivered therewith;
(b) as soon as available, and in any event no later than (i) July 25,
2004, a treasury report in the form attached as Exhibit J for the Borrower for
the six-month period ending June 30, 2004 and (ii) September 25, 2004, a
treasury report in the form attached as Exhibit J for the eight-month period
ending August 31, 2004 (each such treasury report delivered pursuant to clauses
(i) and (ii), a "Treasury Report"); and each such Treasury Report shall be
accompanied by a certificate of a Responsible Officer of the Borrower stating
that (A) the underlying information used to generate such Treasury Report has
been prepared in accordance with GAAP applied on a consistent basis with respect
to the amounts specified in Schedule 5.2 (b) and the officer has no reason to
believe that such Treasury Report is incorrect or misleading in any material
respect and (B) whether the information set forth under the sections entitled "
EBITDA including WWA and Intercompany Access Adjustments and excluding Incentive
Compensation," "Capex/Capital Leases," and "ENDING CASH BALANCE" in such
Treasury Report is less than the corresponding amounts for such periods as set
forth in Schedule 5.2 (b);
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For purposes hereof:
"EBITDA" means earnings before interest, taxes, depreciation and
amortization, as that term is used in the Parent's public filings with the SEC
on form 10-K for the year ended 12/31/03.
"WWA" means the amount of group corporate overhead (and similar) expense
charged back to Subsidiaries and shall be calculated consistent with past
practice of the Parent.
"Intercompany Access Adjustments" means costs incurred for the usage of
telecommunication capacity or services by Borrower on portions of the Global
Crossing network not owed by Borrower (net of similar costs incurred by
Affiliates of the Borrower for usage of the Borrower's telecommunications
network) and shall be calculated consistent with past practice of the Parent.
"Incentive Compensation" means the projected accrual annual incentive
bonuses for calendar year 2004 to be paid by the Borrower pursuant to the Parent
Company's 2004 Annual Bonus Plan approved by the Parent Company's compensation
committee and in relation to certain executive officers of the Parent, the
Parent Company's Board, both by unanimous written consent on or about March 1,
2004.
"Capex/Capital Leases" means the cost incurred by Borrower during the
relevant period for capital expenditures and payments on capital leases.
(c) [Intentionally omitted]
(d) no later than 10 Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification with respect to the governing documents of any Loan
Party;
(e) within 5 days after the same are sent, copies of all financial
statements and reports that the Borrower or any of its Subsidiaries sends to the
holders of any class of its debt securities or public equity securities and,
within five days after the same are filed, copies of all financial statements
and reports that the Borrower or any of its Subsidiaries may make to, or file
with, any securities Government Authority;
(f) to the extent not included in clauses (a) through (e) above, no
later than the date the same are required to be delivered thereunder, copies of
all agreements, documents or other instruments (including, without limitation,
(i) audited and unaudited, pro forma and other financial statements, reports,
forecasts, and projections, together with any required certifications thereon by
independent public auditors or officers of the Borrower or any of its
Subsidiaries or otherwise, (ii) press releases and (iii) statements or reports)
furnished to any other holder of the securities of the Borrower or any of its
Subsidiaries; for the avoidance of doubt, information required to be provided
under this Section 5.2 that is available on the Borrower's website shall be
deemed provided for purposes hereof; and
(g) promptly, such additional financial and other information as the
Lender may from time to time reasonably request.
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5.3 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all its material obligations of whatever
nature, except where the amount or validity thereof is currently being contested
in good faith by appropriate proceedings and reserves in conformity with GAAP-UK
with respect thereto have been provided on the books of the Borrower or its
Subsidiaries, as the case may be.
5.4 Conduct of Business and Maintenance of Existence, etc.
(a) (i) Preserve, renew and keep in full force and effect its corporate
or other existence and (ii) take all reasonable action to maintain all rights,
privileges, franchises, Permits and licenses necessary or desirable in the
normal conduct of its business, except, in each case, as otherwise permitted by
Section 6.3 and except, in the case of clause (ii) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (b) to the extent not in conflict with this Agreement or the other
Loan Documents, comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
5.5 Maintenance of Property; Insurance.
(a) Keep all Property and systems useful and necessary in its business
in good working order and condition, ordinary wear and tear excepted and (b)
maintain with financially sound and reputable insurance companies insurance on
all its Property and in at least such amounts and against at least such risks
(but including in any event general liability and business interruption) as are
usually insured against in the same general area by companies engaged in the
same or a similar business.
5.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP-UK and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities and
permit representatives of the Lender to visit and inspect any of its properties
and examine and, at the Borrower's expense, make abstracts from any of its books
and records at any reasonable time and as often as may reasonably be desired and
to discuss the business, operations, properties and financial and other
condition of the Borrower and its Subsidiaries with officers and employees of
the Borrower and its Subsidiaries and with their respective independent
certified public accountants.
5.7 Notices.
Promptly give notice to the Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default (or alleged default) under any
Contractual Obligation of the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and
33
any Governmental Authority, that in either case, if not cured or if adversely
determined, as the case may be, could reasonably be expected to have a Material
Adverse Effect; and
(c) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to take
with respect thereto.
5.8 Additional Collateral, etc.
(a) With respect to any Property acquired after the Closing Date by the
Borrower or any of its Subsidiaries (other than (x) any Property expressly
excluded pursuant to the terms of the Global Security Agreement (as defined in
the GCNA Indenture), (y) any Property described in paragraph (b) or paragraph
(c) of this Section 5.8 and (z) any Property subject to a Lien expressly
permitted by Section 6.2(g)) as to which the Lender does not have a perfected
Lien, promptly (i) execute and deliver to the Lender such amendments to the
Security Agreement or such other documents as the Lender deems necessary or
advisable to grant to the Lender a security interest in such Property and (ii)
take all actions necessary or advisable to grant to the Lender a perfected first
priority security interest in such Property as may be requested by the Lender.
(b) With respect to any new Subsidiary created or acquired after the
Closing Date, by the Borrower or any of its Subsidiaries, promptly (i) execute
and deliver to the Lender such amendments to the Security Agreement as the
Lender deems necessary or advisable to grant to the Lender a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by the Borrower or any of its Subsidiaries, (ii) deliver to the Lender the
certificates representing such Capital Stock, together with undated stamped
stock transfer forms, in blank, executed and delivered by a duly authorized
officer of the Borrower or such Subsidiary, as the case may be, (iii) cause such
new Subsidiary (A) to become a party to the Security Agreement and (B) to take
such actions necessary or advisable to grant to the Lender a perfected first
priority security interest in the Collateral described in the Security Agreement
with respect to such new Subsidiary as may be requested by the Lender, and (iv)
if requested by the Lender, deliver to the Lender legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Lender.
(c) Notwithstanding anything to the contrary in this Section 5.8, this
Section 5.8 shall not apply to any Property or new Subsidiary created or
acquired after the Closing Date, as applicable, as to which the Lender has
determined in its sole discretion that the collateral value thereof is
insufficient to justify the difficulty, time and/or expense of obtaining a
perfected security interest therein.
5.9 Use of Proceeds.
Use the proceeds of the Term Loans only for the purposes specified in
Section 3.14.
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5.10 Further Assurances.
From time to time execute and deliver, or cause to be executed and
delivered, such additional instruments, certificates or documents, and take all
such actions, as the Lender may reasonably request for the purposes of
implementing or effectuating the provisions of this Agreement and the other Loan
Documents, or of more fully perfecting or renewing the rights of the Lender (or
with respect to any additions thereto or replacements or proceeds or products
thereof or with respect to any other property or assets hereafter acquired by
the Borrower or any Subsidiary which may be deemed to be part of the Collateral)
pursuant hereto or thereto. Upon the exercise by the Lender or any Lender of any
power, right, privilege or remedy pursuant to this Agreement or the other Loan
Documents which requires any consent, approval, recording, qualification or
authorization of any Governmental Authority, the Borrower will execute and
deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that the Lender or
such Lender may be required to obtain from the Borrower or any of its
Subsidiaries for such governmental consent, approval, recording, qualification
or authorization.
5.11 Financial Assistance Requirements.
Comply in all respects with, and ensure compliance in all respects with
sections 151-158 The Companies Act 1985 (United Kingdom).
5.12 Guarantors.
Cause each Affiliate of the Borrower that receives economic benefits
from the repayment of the demand loans owing to Bidco with the proceeds of the
Loans to execute the Guarantee or a joinder thereto.
SECTION 6.
NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Term Loan Commitment
remains in effect or any Term Loan or other amount is owing to the Lender, the
Borrower shall not, and shall not permit any of its Subsidiaries to, and Parent,
with respect to Section 6.16 and Section 6.17, shall not, directly or
indirectly:
6.1 Limitation on Indebtedness.
Create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness outstanding on the date hereof and listed on Schedule
6.1(b) and any refinancings, refundings, renewals or extensions thereof (without
any increase in the principal amount thereof or any shortening of the maturity
of any principal amount thereof); and
35
(c) Indebtedness permitted to be created, incurred, assumed or
allowed to exist by the Borrower or its Subsidiaries under the terms of the GCNA
Indenture; provided, that no Indebtedness may be created, incurred, assumed or
allowed to exist by the Borrower or its Subsidiaries with respect to GMS.
6.2 Limitation on Liens.
Create, incur, assume or suffer to exist any Lien upon any of its
Property, whether now owned or hereafter acquired, except for:
(a) Liens in existence on the date hereof listed on Schedule 6.2(a),
securing Indebtedness permitted by Section 6.1(b); provided, that no such Lien
is spread to cover any additional Property after the Closing Date and that the
amount of Indebtedness secured thereby is not increased;
(b) Liens created pursuant to the Security Documents; and
(c) (i) Liens permitted to be created, incurred, assumed or allowed
to exist by the Borrower or its Subsidiaries pursuant to clauses (b), (d), (e),
(f), (g), (h), (i), (j), (k) and (l) of the definition of "Permitted Liens" (as
defined in the GCNA Indenture) and (ii) Liens permitted to be created, incurred,
assumed or allowed to exist by the Borrower or its Subsidiaries under the terms
of any provision of the GCNA Indenture not covered by clause (i) above;
provided, that at the time of the proposed Lien pursuant to this clause (ii), a
Default has not occurred and is continuing.
6.3 Limitation on Fundamental Changes.
Enter into any merger, consolidation or amalgamation, or liquidate,
wind up or dissolve itself (or suffer any liquidation or dissolution), or
Dispose of all or substantially all of its Property or business, except that:
(a) any Solvent Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any Wholly Owned Subsidiary
Guarantor (provided that (i) such Subsidiary Guarantor shall be the continuing
or surviving corporation or (ii) simultaneously with such transaction, the
continuing or surviving corporation shall become a Subsidiary Guarantor and the
Borrower shall comply with Section 5.8 in connection therewith); and
(b) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor.
6.4 Limitation on Disposition of Property.
Dispose of any of its Property (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter acquired,
except:
(a) the Disposition of surplus, obsolete or worn out property,
property no longer useful in the business, or leasehold interests in the
ordinary course of business;
36
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 6.3(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor; and
(e) any Recovery Event; provided, that the requirements of Section
2.6(b) are complied with in connection therewith.
6.5 Limitation on Restricted Payments.
Declare or pay any dividend on, or make any payment on account of, or
set apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any Capital Stock of
the Borrower or any of its Subsidiaries, whether now or hereafter outstanding,
or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of the Borrower or any
of its Subsidiaries (collectively, "Restricted Payments").
6.6 [Intentionally Omitted].
6.7 Limitation on Investments.
Make any advance, loan, extension of credit (by way of guaranty or
otherwise) or capital contribution to, or purchase any Capital Stock, bonds,
notes, debentures or other debt securities of, or any assets constituting an
ongoing business from, or make any other investment in, any other Person (all of
the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) Investments permitted to made by the Borrower or any of its
Subsidiaries under the terms of the GCNA Indenture; provided, that at the time
of the proposed Investment pursuant to this subsection (c), a Default has not
occurred and is continuing; provided, further, that no Investments may be made
in GMS.
6.8 Limitation on Optional Payments and Modifications of Debt
Instruments, etc.
(a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of, or otherwise voluntarily or optionally
defease, or segregate funds for any such payment, prepayment, repurchase,
redemption or defeasance any Indebtedness permitted under Section 6.1(b) (the
"Existing Debt"), amend, modify or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to, any of the terms of the
Existing Debt (other than any such amendment, modification, waiver or other
change which (i) would extend the maturity or reduce the amount of any payment
of principal thereof, reduce the rate or extend the date for payment of interest
thereon or relax any covenant or other
37
restriction applicable to the Borrower or any of its Subsidiaries and (ii) does
not involve the payment of a consent fee), or (b) amend its certificate of
incorporation, by-laws or other governing documents in any manner determined by
the Lender to be adverse to the Lender.
6.9 Limitation on Transactions with Affiliates.
Enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of Property, the rendering of any service or
the payment of any management, advisory or similar fees, with any Affiliate
(other than the Borrower or any Subsidiary of the Borrower) unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary
course of business of the Borrower or such Subsidiary, as the case may be, and
(c) on terms and conditions that are consistent with past practices of the
Borrower and its Affiliates.
6.10 Limitation on Sales and Leasebacks.
Enter into any arrangement with any Person providing for the leasing
by the Borrower or any of its Subsidiaries of real or personal property which
has been or is to be sold or transferred by the Borrower or such Subsidiary to
such Person or to any other Person to whom funds have been or are to be advanced
by such Person on the security of such property or rental obligations of the
Borrower or such Subsidiary.
6.11 Limitation on Changes in Fiscal Periods.
Permit the fiscal year of the Borrower to end on a day other than
December 31 or change the Borrower's method of determining fiscal quarters.
6.12 Limitation on Negative Pledge Clauses.
Enter into or suffer to exist or become effective any agreement that
prohibits or limits the ability of the Borrower or any of its Subsidiaries to
create, incur, assume or suffer to exist any Lien upon any of its Property or
revenues, whether now owned or hereafter acquired, to secure the Obligations,
other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).
6.13 Limitation on Restrictions on Distributions.
Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Subsidiary to (a) make
Restricted Payments in respect of any Capital Stock of such Subsidiary held by,
or pay or subordinate any Indebtedness owed to the Borrower or any other
Subsidiary, (b) make Investments in the Borrower or any other Subsidiary, or (c)
transfer any of its assets to the Borrower or any other Subsidiary, except for
such encumbrances or restrictions existing under or by reason of (i) any
restrictions existing under the Loan Documents and (ii) any restrictions with
respect to a Subsidiary imposed pursuant to an agreement that has been entered
into in connection with the Disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary.
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6.14 Limitation on Lines of Business.
Enter into any business, either directly or through any Subsidiary,
except for those businesses in which the Borrower and its Subsidiaries are
engaged on the date of this Agreement or that are reasonably related thereto.
6.15 Limitation on Hedge Agreements.
Enter into any Hedge Agreement other than Hedge Agreements entered
into in the ordinary course of business, and not for speculative purposes, to
protect against changes in interest rates, commodity prices or foreign exchange
rates.
6.16 Bonuses.
Pay any bonus to any of its directors, officers or employees other
than (a) sales commissions incurred in the ordinary course of business and
consistent with past practices, (b) employee recognition awards or bonuses
incurred in the ordinary course of business and consistent with past practices
of the Borrower not to exceed $200,000 in the aggregate for the Borrower and its
Subsidiaries taken as a whole, and (c) other bonuses approved by a majority of
the members of the compensation committee of the Parent.
6.17 Indebtedness and Investments regarding GMS.
(a) Create, incur, assume or suffer to exist any Indebtedness owing
by GMS to the Parent or any of its Subsidiaries (other than GMS).
(b) Make any Investments by Parent or any of its Subsidiaries (other
than GMS) in GMS.
6.18 Limitation on Permitted Repayments of Intercompany Debt.
In the event that STTC assigns all of its rights and obligations
hereunder pursuant to Section 8.6(c), then from and after the time that the
Borrower receives written notice of such assignment, the Borrower shall not make
any Permitted Repayments of Intercompany Debt; provided, however, that the
Borrower may continue to repay intercompany loans owing to Bidco with the
proceeds of Term Loans.
SECTION 7.
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Term Loan or
Obligation when due in accordance with the terms hereof; or the Borrower shall
fail to pay any interest on any Term Loan or Obligation, or any Loan Party shall
fail to pay any other amount
39
payable hereunder or under any other Loan Document, within five days after any
such interest or other amount becomes due in accordance with the terms hereof or
thereof; or
(b) Any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at any
time under or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of the date
made or deemed made or furnished; or
(c) Any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) and (b) of this Section 7), and such
default shall continue unremedied for a period of 30 days; or
(d) The Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any interest on any
such Indebtedness beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created; or (iii) default in the
observance or performance of any other agreement or condition relating to any
such Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on
behalf of such holder or beneficiary) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or to
become subject to a mandatory offer to purchase by the obligor thereunder or (in
the case of any such Indebtedness constituting a Guarantee Obligation) to become
payable; provided, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an Event of
Default unless, at such time, one or more defaults, events or conditions of the
type described in clauses (i), (ii) and (iii) of this paragraph (e) shall have
occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $2,500,000; or
(e) (i) any Guarantor, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Guarantor, the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Guarantor, the Borrower or any of its Subsidiaries any
case, proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against any Guarantor, the Borrower
or any of its Subsidiaries any case, proceeding or other action seeking issuance
of a warrant of
40
attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) any Guarantor, the
Borrower or any of its Subsidiaries 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 Guarantor, the Borrower or
any of its Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving for the Borrower and its
Subsidiaries taken as a whole a liability (not paid or fully covered by
insurance as to which the relevant insurance company has acknowledged coverage)
of $2,500,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or
(g) Any of the Security Documents shall cease, for any reason (other
than by reason of the express release thereof pursuant to Section 8.15), to be
in full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(h) Any Guarantee shall cease, for any reason (other than by reason
of the express release thereof by Lender), to be in full force and effect or any
Loan Party or any Affiliate of any Loan Party shall so assert; or
(i) Any Change of Control shall occur; or
(j) An Event of Default (as defined therein) shall occur and be
continuing under the GCNA Indenture.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Term Loan Commitment shall immediately terminate and the Term
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken with the consent of the Lender, the Lender
may declare the Term Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement and the other Loan Documents to be due
and payable forthwith, whereupon the same shall immediately become due and
payable.
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SECTION 8.
MISCELLANEOUS
8.1 Amendments and Waivers.
Neither this Agreement or any other Loan Document, nor any terms
hereof or thereof may be amended, supplemented or modified without the consent
of the Lender as set forth in Section 8.6(h). In the case of any waiver granted
by the Lender, the Lender shall be restored to its former position and rights
hereunder and under the other Loan Documents, and any Default or Event of
Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon. Any such waiver, amendment, supplement or
modification shall be effected by a written instrument; provided, that delivery
of an executed signature page of any such instrument by facsimile transmission
shall be effective as delivery of a manually executed counterpart thereof.
8.2 Notices.
All notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered, or two Business Days after being deposited with an
international mail courier service, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows or in the case of any party, to such
other address as such party may hereafter notify to the other parties hereto:
The Lender: STT Communications Ltd.
00 Xxxxxxx Xxxx #00-00/00
XxxxXxx Xxxxxx
Xxxxxxxxx 000000
Attention: General Counsel
The Borrower: Global Crossing (UK)
Telecommunications Limited
Centennium House
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxxx
Attention: Xxxxxx X. Xxxxxxx
With a copy to: Global Crossing Limited
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attention: Xxxx XxXxxxx
42
The Parent: Global Crossing Limited
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attention: Xxxx XxXxxxx
provided, that any notice, request or demand to or upon the Lender shall not be
effective until received.
8.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
8.4 Survival of Representations and Warranties.
All representations and warranties made herein, in the other Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Term Loans and other extensions of credit
hereunder.
8.5 Payment of Expenses.
The Borrower agrees (a) to pay or reimburse the Lender and the trustee
under the GCNA Indenture for all its reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution of, and
any amendment, supplement or modification to, this Agreement and the other Loan
Documents and any other documents prepared in connection herewith or therewith
(including, without limitation, any waiver to the GCNA Indenture and any
intercreditor agreement entering into by the Lender and the trustee under the
GCNA Indenture), , and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements and other charges of counsel to the Lender (including the
allocated fees and disbursements and other charges of in-house counsel), (b) to
pay or reimburse the Lender and the trustee under the GCNA Indenture for all its
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any other
documents prepared in connection herewith or therewith (including, without
limitation, any waiver to the GCNA Indenture and any intercreditor agreement
entering into by the Lender and the trustee under the GCNA Indenture),
including, without limitation, the fees and disbursements of counsel (including
the allocated fees and disbursements and other charges of in-house counsel) to
the Lender, (c) to pay, indemnify, or reimburse the Lender, and hold the Lender
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 and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment,
43
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify or reimburse the Lender, its affiliates, and its officers,
directors, trustees, employees, affiliates, shareholders, attorneys and other
advisors, agents and controlling persons (each, an "Indemnitee") for, and hold
each Indemnitee harmless from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
Agreement, the other Loan Documents and any such other documents, including,
without limitation, any of the foregoing relating to the use of proceeds of the
Term Loans or the violation of, noncompliance with or liability under, any use
by unauthorized persons of information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons and the fees and disbursements and other charges
of legal counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the "Indemnified Liabilities"); provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
solely and proximately from the gross negligence or willful misconduct of such
Indemnitee. No Indemnitee shall be liable for any damages arising from the use
by unauthorized persons of Information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with the Facilities. All amounts due under this
Section shall be payable not later than 30 days after written demand therefor.
Statements payable by the Borrower pursuant to this Section shall be submitted
to the address of the Borrower set forth in Section 8.2, or to such other Person
or address as may be hereafter designated by the Borrower in a notice to the
Lender. The agreements in this Section shall survive repayment of the Term Loans
and all other amounts payable hereunder.
8.6 Successors and Assigns; Participations and Assignments.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lender, all future holders of the Term Loans and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of their respective rights or obligations under this Agreement without the prior
written consent of the Lender.
(b) The Lender may, without the consent of the Borrower or any other
Person, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "Participant")
participating interests in any Term Loan owing to the Lender, any Term Loan
Commitment of the Lender or any other interest of such Lender hereunder and
under the other Loan Documents. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Term Loan for all purposes under this
Agreement and the other Loan Documents, and the Borrower shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
44
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would require the consent of the Lender pursuant to Section
8.1. The Borrower agrees that if amounts outstanding under this Agreement and
the Term Loans are due or unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall, to the maximum extent permitted by applicable law, be deemed
to have the right of setoff in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement; provided, that in purchasing such participating interest, such
Participant shall be deemed to have agreed to share with the Lender the proceeds
thereof as provided in Section 8.7(a) as fully as if such Participant were a
Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.11, 2.12 and 2.13 with respect to its
participation in the Term Loan Commitments and the Term Loans outstanding from
time to time as if such Participant were a Lender; provided, that in the case of
Section 2.12, such Participant shall have complied with the requirements of said
Section; and provided, further, that no Participant shall be entitled to receive
any greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender (an "Assignor") may, in accordance with applicable law, at
any time and from time to time assign to any Lender or any Affiliate, Related
Fund or Control Investment Affiliate thereof or, to a Permitted Bank Transferee
(an "Assignee") all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit E (an "Assignment and Acceptance"), executed by such Assignee and such
Assignor; provided, that no such assignment to an Assignee (other than any
Lender or any Affiliate thereof) shall be in an aggregate principal amount of
less than $10,000,000 (other than, in each case, in the case of an assignment of
all of a Lender's interests under this Agreement). Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Term Loan Commitments
and/or Term Loans as set forth therein, and (y) the Assignor thereunder shall,
to the extent provided in such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of an Assignor's rights and obligations under this
Agreement, such Assignor shall cease to be a party hereto, except as to Sections
2.11, 2.12, 2.13, and 8.5 in respect of the period prior to such effective
date). For purposes of the minimum assignment amounts set forth in this
paragraph, multiple assignments by two or more Related Funds shall be
aggregated. Any Assignor shall give the Borrower prompt notice of any assignment
of such Assignor's rights and obligations hereunder. Notwithstanding anything to
the contrary stated herein, the Borrower shall have no obligation to pay to any
Assignee of STTC any increased costs pursuant to Section 2.12(c) to the extent
that such increased costs of such Assignee are greater than the increased costs
that would otherwise be owing to STTC.
45
(d) The Lender shall, on behalf of the Borrower, maintain at its address
referred to in Section 8.2 a copy of each Assignment and Acceptance delivered to
it and a register (the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower and the Lender
shall treat each Person whose name is recorded in the Register as the owner of
the Term Loans and any Notes evidencing such Term Loans recorded therein for all
purposes of this Agreement. Any assignment of any Term Loan, whether or not
evidenced by a Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Term Loan evidenced by
a Note shall be registered on the Register only upon surrender for registration
of assignment or transfer of the Note evidencing such Term Loan, accompanied by
a duly executed Assignment and Acceptance; thereupon one or more new Notes in
the same aggregate principal amount shall be issued to the designated Assignee,
and the old Notes shall be returned by the Lender to the Borrower marked
"canceled". The Register shall be available for inspection by the Borrower or
any Lender (with respect to any entry relating to such Lender's Term Loans) at
any reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other Person
is required by Section 8.6(c), by each such other Person) together with payment
to the Lender of a registration and processing fee of $3,500 (treating multiple,
simultaneous assignments by or to two or more Related Funds as a single
assignment) (except that no such registration and processing fee shall be
payable in the case of an Assignee which is already a Lender or is an Affiliate
or Related Fund of a Lender or a Person under common management with a Lender),
the Lender shall (i) promptly accept such Assignment and Acceptance and (ii) on
the effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Borrower. On or prior to such effective date, the Borrower, at its own
expense, upon request, shall execute and deliver to the Lender (in exchange for
the Term Note of the assigning Lender) Term Note, to the order of such Assignee
in an amount equal to the applicable Term Loans assumed or acquired by it
pursuant to such Assignment and Acceptance and, if the Assignor has retained
Term Loans upon request, a new Term Note to the order of the Assignor in an
amount equal to the Term Loans retained by it hereunder. Such new Term Note or
Term Notes shall be dated the Closing Date and shall otherwise be in the form of
the Term Note or Term Notes replaced thereby.
(f) For the avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Term Loans and
Term Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests in Term Loans and Term Notes,
including, without limitation, any pledge or assignment by a Lender of any Term
Loan or Term Note to any Federal Reserve Bank in accordance with applicable law.
(g) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing from time to time by the Granting Lender to the
Lender and the Borrower, the option to provide to the Borrower all or any part
of any Term Loan that such Granting Lender would otherwise be obligated to make
to the Borrower pursuant to this Agreement; provided,
46
that (i) nothing herein shall constitute a commitment by any SPC to make any
Term Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Term Loan, the Granting Lender shall be
obligated to make such Term Loan pursuant to the terms hereof. The making of a
Term Loan by an SPC hereunder shall utilize the Term Loan Commitment of the
Granting Lender to the same extent, and as if, such Term Loan were made by such
Granting Lender. Each party hereto hereby agrees that no SPC shall be liable for
any indemnity or similar payment obligation under this Agreement (all liability
for which shall remain with the Granting Lender). In furtherance of the
foregoing, each party hereto hereby agrees (which agreement shall survive the
termination of this Agreement) that, prior to the date that is one year and one
day after the payment in full of all outstanding commercial paper or other
indebtedness of any SPC, it will not institute against, or join any other person
in instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under the laws of the United States or any
state thereof. In addition, notwithstanding anything to the contrary in this
Section 8.6(g), any SPC may (A) with notice to, but without the prior written
consent of, the Borrower and the Lender and without paying any processing fee
therefor, assign all or a portion of its interests in any Term Loans to the
Granting Lender, or with the prior written consent of the Borrower and the
Lender (which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Term Loans, and (B) disclose
on a confidential basis any non-public information relating to its Term Loans to
any rating agency, commercial paper dealer or provider of any surety, guarantee
or credit or liquidity enhancement to such SPC; provided, that non-public
information with respect to the Borrower may be disclosed only with the
Borrower's consent which will not be unreasonably withheld. This paragraph (g)
may not be amended without the written consent of any SPC with Term Loans
outstanding at the time of such proposed amendment.
(h) In the event that there shall be more than one Lender party to this
Agreement, amendments, supplements, modifications or waivers hereto or the other
Loan Documents may only be made with the written consent of the Required
Lenders; provided, however, that no amendment, supplement, modification or
waiver shall:
(i) forgive the principal amount or extend the final scheduled date
of maturity of any Term Loan, extend the Maturity Date, reduce the stated
rate of any interest or fee payable hereunder or extend the scheduled date
of any payment thereof, or increase the amount or extend the expiration
date of any Term Loan Commitment of any Lender;
(ii) amend, modify or waive any provision of this Section 8.6(h) or
reduce any percentage specified in the definition of Required Lenders,
consent to the assignment or transfer by the Borrower of any of its rights
and obligations under this Agreement and the other Loan Documents, release
all or substantially all of the Collateral or release all or substantially
all of the Guarantors from their guarantee obligations under the Guarantee;
or
(iii) impose restrictions on assignments and participations that are
more restrictive than, or additional to, those set forth in Section 8.6;
47
in each case, without the consent of all the Lenders.
8.7 Adjustments; Set-off.
(a) Except to the extent that this Agreement provides for payments to be
allocated to a particular Lender or to the Lender under a particular Facility,
if any Lender (a "Benefitted Lender") shall at any time receive any payment of
all or part of the Obligations owing to it, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 6(f), or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Obligations, such Benefitted
Lender shall purchase for cash from the other Lender a participating interest in
such portion of each such other Lender's Obligations, or shall provide such
other Lender with the benefits of any such collateral, as shall be necessary to
cause such Benefitted Lender to share the excess payment or benefits of such
collateral ratably with each of the Lender; provided, however, that if all or
any portion of such excess payment or benefits is thereafter recovered from such
Benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of each Lender provided by law,
each Lender shall have the right, without prior notice to the Borrower, any such
notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees to notify promptly the
Borrower and the Lender after any such setoff and application made by such
Lender, provided, that the failure to give such notice shall not affect the
validity of such setoff and application.
8.8 Counterparts.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument.
Delivery of an executed signature page of this Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
hereof. A set of the copies of this Agreement signed by all the parties shall be
lodged with the Borrower and the Lender.
8.9 Severability.
Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition
48
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.10 Integration.
This Agreement and the other Loan Documents represent the entire agreement
of the Borrower and the Lender with respect to the subject matter hereof and
thereof, and there are no promises, undertakings, representations or warranties
by the Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers.
The Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York
located in the County of New York, the courts of the United States of America
for the Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 8.2 or at such other address of which the Lender
shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to xxx in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
49
8.13 Acknowledgments.
The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) the Lender has no fiduciary relationship with or duty to the Borrower
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Lender, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely that
of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among Lender
or the Borrower.
8.14 Confidentiality.
The Lender agrees to keep confidential all non-public information provided
to it by any Loan Party pursuant to this Agreement that is designated by such
Loan Party as confidential; provided, that nothing herein shall prevent the
Lender from disclosing any such information (a) to the Lender or any Affiliate
of any thereof, (b) to any Participant or Assignee (each, a "Transferee") or
prospective Transferee that agrees to comply with the provisions of this Section
or substantially equivalent provisions, (c) to any of its employees, directors,
agents, attorneys, accountants and other professional advisors, (d) upon the
request or demand of any Governmental Authority having jurisdiction over it, (e)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (f) if requested or
required to do so in connection with any litigation or similar proceeding, (g)
that has been publicly disclosed other than in breach of this Section, (h) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender or (i) in connection with the exercise of any remedy
hereunder or under any other Loan Document. Notwithstanding anything to the
contrary in the foregoing sentence or any other express or implied agreement,
arrangement or understanding, the parties hereto hereby agree that, from the
commencement of discussions with respect to the financing provided hereunder,
any party hereto (and each of its employees, representatives, or agents) is
permitted to disclose to any and all persons, without limitation of any kind,
the tax structure and tax aspects of the transactions contemplated hereby, and
all materials of any kind (including opinions or other tax analyses) related to
such tax structure and tax aspects.
8.15 Release of Collateral and Guarantee Obligations.
(a) Notwithstanding anything to the contrary contained herein or in any
other Loan Document, upon request of the Borrower in connection with any
Disposition of Property permitted by the Loan Documents, the Lender shall
(without notice to, or vote or consent of, any Affiliate of the Lender that is a
party to any Specified Hedge Agreement) take such actions as shall be required
to release its security interest in any Collateral being Disposed of in such
50
Disposition, and to release any guarantee obligations under any Loan Document of
any Person being Disposed of in such Disposition, to the extent necessary to
permit consummation of such Disposition in accordance with the Loan Documents;
provided, that the Borrower shall have delivered to the Lender, at least ten
Business Days prior to the date of the proposed release (or such shorter period
agreed to by the Lender), a written request for release identifying the relevant
Collateral being Disposed of in such Disposition and the terms of such
Disposition in reasonable detail, including the date thereof, the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with this Agreement and
the other Loan Documents and that the proceeds of such Disposition will be
applied in accordance with this Agreement and the other Loan Documents.
(b) Notwithstanding anything to the contrary contained herein or any other
Loan Document, when all Obligations (other than obligations in respect of any
Specified Hedge Agreement) have been paid in full, all Term Loan Commitments
have terminated or expired, upon request of the Borrower, the Lender shall
(without notice to, or vote or consent of, any Lender, or any Affiliate of any
Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in all Collateral, and to
release all guarantee obligations provided for in any Loan Document, whether or
not on the date of such release there may be outstanding Obligations in respect
of Specified Hedge Agreements. Any such release of guarantee obligations shall
be deemed subject to the provision that such guarantee obligations shall be
reinstated if after such release any portion of any payment in respect of the
Obligations guaranteed thereby shall be rescinded or must otherwise be restored
or returned upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrower or any Guarantor or any substantial part of its
property, or otherwise, all as though such payment had not been made.
8.16 Accounting Changes.
In the event that any "Accounting Change" (as defined below) shall occur
and such change results in a change in the method of calculation of financial
covenants, standards or terms in this Agreement, then the Borrower and the
Lender agree to enter into negotiations in order to amend such provisions of
this Agreement so as to equitably reflect such Accounting Change with the
desired result that the criteria for evaluating the Borrower's financial
condition shall be the same after such Accounting Change as if such Accounting
Change had not been made. Until such time as such an amendment shall have been
executed and delivered by the Borrower and the Lender, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
8.17 WAIVERS OF JURY TRIAL.
THE BORROWER AND THE LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR
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PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.
52
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWER: GLOBAL CROSSING (UK)
TELECOMMUNICATIONS LIMITED
By: /s/ Xxxx Xxxxxxx
--------------------------------
Name: Xxxx Xxxxxxx
Title: Director
LENDER: STT COMMUNICATIONS LTD.
Term Loan
Commitment: $100,000,000
By: /s/ Xxxx Xxxxxxxxxx
--------------------------------
Name: Xxxx Xxxxxxxxxx
Title: Chief Financial Officer
LOAN PARTY: GLOBAL CROSSING LIMITED
By: /s/ Xxx X'Xxxxx
--------------------------------
Name: Xxx X'Xxxxx
Title: Executive Vice President and CFO
53
SCHEDULE 3.3
CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES
1. Consent of Lender as holder of 100% of Notes outstanding under GCNA
Indenture.
2. Resolutions of the Boards of Directors of the Borrower and the Guarantors
(other than Parent).
3. Approval by the Ad Hoc Finance Committee of the Parent.
4. The security created by the Security Agreement and the charge over the
shares of the Borrower requires registration:
a. under Sections 395-397 of the Companies Xxx 0000 the prescribed
particulars of the registerable charges created by the Security
Agreement must be delivered for registration under that section
within 21 days of the date of execution of the Security Agreement;
b. at the Land Charges Registry or HM Land Registry, as appropriate, to
secure priority in respect of charges over any real property or
certain interests therein;
c. at the United Kingdom Patent Office to secure priority over third
parties in such patents acquired after the creation of the Security
Agreement; and
d. a memorandum of the particulars of the Chargee's interest over a
registered trademark evidenced by the Security Agreement should be
entered on the United Kingdom Trademarks Register although it is not
certain that such registration would protect the priority of the
Security Agreement against the interests of third parties therein
acquired after its creation;
e. Following any default, enforcement (or otherwise) under or pursuant
to the Security Agreement a liability to pay United Kingdom stamp
duty in connection with the execution and delivery or performance of
the Security Agreement will arise on any transfer of shares in a
company incorporated in the United Kingdom.
f. Following any default, enforcement (or otherwise) under or pursuant
to the Security Agreement a liability to pay United Kingdom stamp
duty reserve tax will arise in respect of any agreement to transfer
shares in a company incorporated in the United Kingdom for
consideration to the Lender (which liability for stamp duty reserve
tax would be cancelled if a transfer of such shares had been duly
stamped within six years of such agreement).
g. Following any default, enforcement (or otherwise) under or pursuant
to the Security Agreement or a liability to pay United Kingdom stamp
duty land tax will arise on any dealings in the United Kingdom in
respect of land that had been
subject to registration at the Land Charges Registry or HM Land
Registry, as appropriate.
2
SCHEDULE 3.12
SUBSIDIARIES
None.
SCHEDULE 3.15
FILING JURISDICTIONS
--------------------------------------------------------------------------------
Borrower Filings only in England, at the offices
specified in item 4 of Schedule 3.3
--------------------------------------------------------------------------------
Global Crossing (Bidco) Limited Filings only in England, at the office
specified in item 4(a) of Schedule 3.3
--------------------------------------------------------------------------------
Treasury Report Targets Schedule 5.2(b)
GCUK $M
Q1 Apr May Jun Jul Aug Sep Oct Nov Dec Total Q1 Q2 Q3 Q4
--------------------------------------------------------------------------------------------------------------
Adjusted EBITDA* 26.6 9.9 16.9 10.0 9.4 7.7 8.9 8.7 9.4 11.4 118.9 26.6 36.8 26.0 29.5
CAPEX/Capital Leases (11.4) (3.4) (4.1) (3.5) (2.8) (3.6) (2.8) (2.8) (3.6) (2.8) (40.8) (11.4) (11.0) (9.2) (9.3)
ENDING CASH BALANCE 55.6 50.7 57.7 23.6 23.4 37.0 21.6 25.6 43.3 24.5 24.5 55.6 23.6 21.6 24.5
*EBITDA including Intercompany Cost of Access true-up and estimated World Wide
Allocation, and excluding Incentive Compensation
US GAAP $M
Assumed exchange rate of 1.78 USD/GBP
Excludes interest payments on Term Loans
Global Crossing (UK) Telecommunications Ltd Schedule 6.1 (b)
Indebtedness as at 30th April 2004 - UK GAAP
Indebtedness Expressed in USD
Guarantee of 11% Senior Secured Notes due 2006 $200,000,000.00
-------------------------------------------------------------------------------
Indebtedness Expressed in GBP
Intercompany Payables -(Pound)364,020,371
Capital Lease Obligations -(Pound)39,513,529
---------------------
Total -(Pound)403,533,901
-------------------------------------------------------------------------------
Details:
GBP
---
Intercompany Payables
Global Crossing (Bidco) Limited -5,121,825
Global Crossing Communications International Limited -16,880,823
Global Crossing Conferencing Limited -153,291
Global Crossing Development Co. -15,841,826
Global Crossing Europe Limited -2,588,570
Global Crossing Ireland, Limited -1,973,279
Global Crossing Network Center Ltd. -23,008
Global Crossing North America, Inc -566
Global Crossing North America Holdings, Inc -1,045
GC Pan European Crossing Holdings B.V. -844
GC Pan European Crossing Nederland B.V. -44,288
GC Pan European Crossing UK Ltd. -310,427
Global Crossing Telecommunications, Inc. -7,358,392
Global Crossing Telecommunications, Inc. -22,151
Global Crossing Telecommunications, Inc. -68,227
Global Crossing Telecommunications, Inc. -11,759
Global Crossing Worldwide Customer Help Desk Canada, Ltd. -70,198
Geoconference Limited -191,576
Global Marine Systems Limited -142,267
IXnet UK Limited -752,856
South American Crossing Ltd. -6,360,908
---------------
-57,918,127
---------------
Global Crossing (Bidco) Limited -306,102,245
---------------
-364,020,371
---------------
Capital Leases Obligations
Network Rail (Note 1) -34,347,624
ECS -5,165,905
---------------
-39,513,529
---------------
Note 1: Excludes(Pound)1,899,537 of Accrued Interest but includes
(Pound)2,884,048 Accrued Additions not recognised by Network Rail
SCHEDULE 6.2(a)
EXISTING LIENS
