EXHIBIT 10.16(a)
AMENDMENT TO NOTE AGREEMENT
This AMENDMENT TO NOTE AGREEMENT (this "AMENDMENT") is made and entered
into effective as of September 28, 2001, by and among METROMEDIA FIBER NETWORK
SERVICES, INC. (the "ISSUER"), a Delaware corporation, each of the purchasers
which is a party hereto (as evidenced by the signature pages of this Agreement)
or which may from time to time become a party to the Note Agreement as a
purchaser or any successor or assignee thereof (individually, a "PURCHASER" and,
collectively, the "PURCHASERS"), and NORTEL NETWORKS INC., a Delaware
corporation, as administrative agent for itself and the other Purchasers (in
such capacity, together with its successors in such capacity, the
"ADMINISTRATIVE AGENT").
RECITALS:
A. Pursuant to that certain Note Agreement dated as of September 19, 2001,
by and among the Issuer, the Purchasers and the Administrative Agent (as
amended, the "Note Agreement"), the Purchasers agreed to purchase notes issued
by the Issuer in the aggregate principal amount of $231,036,842.
B. The parties hereto desire to amend the Note Agreement in certain
respects.
AGREEMENTS:
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. TERMS DEFINED. Unless otherwise defined or stated in this Amendment,
each capitalized term used in this Amendment has the meaning given to such term
in the Note Agreement (as amended by this Amendment).
2. AMENDMENT TO SECTION 1.01.
(a) The following definitions set forth in SECTION 1.01 of the Note
Agreement are hereby amended and restated to read in their entirety as follows:
"'HOLDINGS SUBORDINATED NOTES' means (a) the $300,000,000 6.15%
Series A Convertible Subordinated Notes due 2010 and (b) the $675,281,000
6.15% Series B Convertible Subordinated Notes due 2010, both issued by
Holdings pursuant to an Indenture dated as of October 1, 2001."
"'MATERIAL AGREEMENT' means, collectively, (a) the Holdings Senior
Notes and the Holdings Subordinated Notes (and any indenture relating
thereto), (b) the Note Documents, (c) the Vendor Agreements, (d) the
Verizon Agreement and the Verizon Debt Agreement, (e) any agreement with a
vendor or contractor pursuant to which Holdings reasonably anticipates
that Holdings and its Subsidiaries will
purchase in the aggregate more than $50,000,000 of equipment or
construction services, (f) any agreement providing for the sale or lease
of fiber by Holdings or any Restricted Subsidiary for aggregate
consideration of $50,000,000 or more, (g) the Holdings Convertible Debt or
Equity Documents, (h) the Holdings Notes Documents, (i) the agreements and
instruments entered into pursuant to SECTION 3.01, and (j) the other
agreements listed in SCHEDULE 4.01(K)."
"'VERIZON AGREEMENT' means the Fiber Optics Private Network
Agreement dated as of October 7, 1999 between Verizon Global Networks Inc.
(formerly known as Xxxx Atlantic Global Networks, Inc.) and the Issuer, as
the same has been amended pursuant to (a) a letter agreement dated June
20, 2000 between Holdings, the Issuer and Verizon Global Networks Inc.
under which a portion of the Contract Minimum under said Fiber Optics
Private Network Agreement is allocated to and assumed by Genuity Network
Inc., (b) Amendment No. 1 thereto, and (c) an Amendment No. 2 thereto to
be executed and delivered on the Closing Date as contemplated by the last
sentence of SECTION 3.01(K). References in this Agreement to the 'Verizon
Agreement' shall refer to said Fiber Optics Private Network Agreement as
so allocated between Verizon Global Networks Inc. and Genuity Networks,
Inc."
(b) CLAUSE (A)(II) of the definition of "Net Available Proceeds" in
SECTION 1.01 of the Note Agreement is hereby amended and restated to read in its
entirety as follows:
"(ii) such Net Available Proceeds shall be net of any repayments of
Indebtedness by Holdings and its Restricted Subsidiaries to the extent
that such Indebtedness is secured by a Lien (other than a Lien under, or
subject to the provisions of, the Junior Security Documents) on the
property that is the subject of such Asset Sale and, in the case of any
sale of allocated capacity on the Japan-US Cable Network, net of any
amounts required under Section 5.24 of the Verizon Indenture (as the
Verizon Indenture is in effect on the Closing Date and without giving
effect to any modifications or supplements thereto after the Closing Date)
to be deposited into the Disbursement Account under and as defined in the
Verizon Intercreditor Agreement; and"
3. ADDITIONAL AMENDMENT TO SECTION 1.01. The following definitions are
hereby added to SECTION 1.01 of the Note Agreement to read in their entirety as
follows, which definitions shall appear in alphabetical order in SECTION 1.01:
"'VERIZON INDENTURE' has the meaning specified in the Holdings Notes
Agreement."
"'VERIZON INTERCREDITOR AGREEMENT' has the meaning specified in the
Holdings Notes Agreement."
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4. AMENDMENT TO SECTION 2.03. The reference to the date "September 28,
2001" contained in SECTION 2.03(E) of the Note Agreement is hereby amended to
mean and refer to the date "October 1, 2001".
5. AMENDMENT TO SECTION 3.01(k). SECTION 3.01(k) of the Note Agreement is
hereby amended and restated to read in its entirety as follows:
"(k) VERIZON DEBT AGREEMENT. Evidence that Holdings shall have
received net cash proceeds in an amount at least equal to $50,000,000 from
the issuance at par of secured Indebtedness, pursuant to agreements
(including all related shareholder, registration right and other
agreements) in form and substance satisfactory to the Purchasers, with the
terms and conditions applicable to such Indebtedness being satisfactory in
form and substance to each Purchaser, it being understood that such
Indebtedness shall be incurred by Holdings to finance the monetary
obligations referred to in Section 3.01(m) of the Holdings Notes Agreement
and shall be secured by the Japan-US Cable Network and related assets and
that, in connection therewith, Verizon, Inc. (or the respective affiliate
party thereto) shall have entered into intercreditor arrangements
satisfactory to the Holdings Notes Agent with respect to the Japan-US
Cable Network and such related assets. In addition, to the extent that the
Verizon Agreement shall be modified or supplemented in connection with the
execution and delivery of the Verizon Debt Agreement, each Purchaser shall
have received a copy of such modification or supplement and such
modification or supplement shall be satisfactory in form and substance to
each Purchaser."
6. AMENDMENT TO SECTION 4.01(j). CLAUSE (i) of SECTION 4.01(j) of the Note
Agreement is hereby amended and restated to read in its entirety as follows:
"(i) LITIGATION. Other than as set forth on Schedule 4.01(j) hereto,
there are no actions, suits or proceedings at law or in equity or by or
before any Governmental Authority now pending or, to the knowledge of any
Obligor, threatened against or affecting Holdings or any Restricted
Subsidiary or any business, property or rights of Holdings or any
Restricted Subsidiary (A) that involve any Basic Document or the
Transactions or (B) as to which there is a reasonable likelihood of an
adverse determination and that, if adversely determined, individually or
in the aggregate, has had or could reasonably be expected (individually or
in the aggregate) to have a Material Adverse Effect."
7. AMENDMENT TO SECTION 6.01(a). CLAUSE (ii) of SECTION 6.01(a) of the
Note Agreement is hereby amended and restated to read in its entirety as
follows:
"(ii) existing Indebtedness of Holdings as listed on SCHEDULE 6.01
hereto;"
8. AMENDMENT TO SECTION 6.02(b). SECTION 6.02(b) of the Note Agreement is
hereby amended and restated to read in its entirety as follows:
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"(b) Liens existing on the date hereof listed on SCHEDULE 6.02
hereto;"
9. AMENDMENT TO SECTION 6.02 (d) AND (h). CLAUSES (d) AND (h) of SECTION
6.02 of the Note Agreement is hereby amended and restated to read in its
entirety as follows:
"(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business
that are not overdue for a period of more than 30 days or that are being
contested in good faith and by appropriate proceedings so long as the
aggregate amount of all such Liens shall not at any time exceed the sum of
(i) $5,000,000 PLUS (ii) with respect to any such Liens outstanding on the
Closing Date (but not any such Liens arising after the Closing Date), an
additional $2,100,000;
(h) Liens securing Indebtedness permitted under SECTION 6.01(a)(v)
and (ix) and 6.01(b)(iv), so long as (i) in the case of SECTIONS
6.01(a)(v) and 6.01(b)(iv), such Liens cover only the assets engineered,
constructed, installed, acquired, developed or improved with such
Indebtedness and (ii) in the case of SECTION 6.01(a)(ix), such Liens cover
only Property constituting 'Verizon Collateral' in accordance with the
requirements of the Verizon Intercreditor Agreement;"
10. AMENDMENT TO SECTION 6.05(a). CLAUSES (ii) and (iv) of SECTION 6.05(a)
of the Note Agreement are hereby amended and restated to read in their entirety
as follows:
"(ii) cash and Cash Equivalents, PROVIDED that all such cash and
Cash Equivalents of the Obligors (other than up to $1,000,000 that may be
held in operating deposit accounts and up to the amounts permitted by
Section 6.05(a) of the Holdings Note Agreement to secure obligations in
respect of letters of credit) is held in the Collateral Accounts under and
as defined in the Senior Security Agreement;"
"(iv) Investments by the Obligors in Metromedia Fiber Network
(Bermuda) Ltd., a Bermuda company and a Wholly Owned Restricted
Subsidiary, required under the consortium arrangements for the undersea
cables of TAT-14, APCN-2 of which Metromedia Fiber Network (Bermuda) Ltd.
is a member, in an aggregate amount (A) not to exceed $28,000,000 during
the period commencing on the date hereof through and including December
31, 2001 and (B) not to exceed $38,000,000 during the period commencing on
the date hereof through and including December 31, 2002;"
11. AMENDMENT TO SECTION 6.06(a). A new paragraph is hereby inserted at
the end of SECTION 6.06(a) of the Note Agreement to read as follows:
"Notwithstanding the foregoing, Holdings will not, and will not
permit any of its Subsidiaries to, sell any ownership interest in any
allocated capacity in
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respect of the Japan-US Cable Network if the same would require that
Holdings make an offer to purchase the notes issued under the Verizon Debt
Agreement pursuant to Section 5.24 of the Verizon Indenture (as the
Verizon Indenture is in effect on the Closing Date and without giving
effect to any modifications or supplements thereto after the Closing
Date)."
12. AMENDMENT TO SECTION 6.08(1). CLAUSE (A) of SECTION 6.08(i) of the
Note Agreement is hereby amended and restated to read in its entirety as
follows:
"(A) restrictions in effect on the date hereof and set forth on
SCHEDULE 6.08 hereto;"
13. AMENDMENT TO SECTION 6.12. SECTION 6.12 of the Note Agreement is
hereby amended and restated to read in its entirety as follows:
"Section 6.12 MODIFICATIONS TO CERTAIN AGREEMENTS. None of the
Obligors will, nor will it cause or permit any Restricted Subsidiary to,
permit any waiver, supplement, modification, amendment, termination or
release of (a) the Holdings Senior Notes or the Holdings Subordinated
Notes (or any indenture relating thereto), (b) the Holdings Convertible
Debt or Equity Documents, (c) the Verizon Debt Agreement or the Verizon
Agreement, if, in the case of any modification to the Verizon Agreement,
the same would result in (or would reasonably be expected to result in)
the reduction of the aggregate amounts payable under the Verizon Agreement
to Holdings and its Restricted Subsidiaries during calendar years 2001 and
2002 by more than 10% in either of such years, (d) any of the Holdings
Notes Documents in any manner that would increase the amount of any
Indebtedness thereunder, increase the rate of interest applicable to any
Indebtedness thereunder, shorten the maturity date or the date for payment
of any Indebtedness thereunder or otherwise be materially adverse to
Holdings or any of its Subsidiaries or the Holders, or (e) any other
Material Agreement, or its articles, charter or by-laws, in each case to
the extent that any such waiver, supplement, modification, amendment,
termination or release under this CLAUSE (E) could reasonably be expected
(individually or in the aggregate) to have a Material Adverse Effect.
Without limiting the generality of the foregoing, Holdings will not issue
any shares of Disqualified Stock. "
14. AMENDMENT TO SECTION 6.13(h). SECTION 6.13(h) of the Note Agreement is
hereby amended and restated to read in its entirety as follows:
"(h) MAXIMUM CAPITAL EXPENDITURES. The Issuer will cause Holdings to
not permit the aggregate amount of Capital Expenditures of Holdings and
its Restricted Subsidiaries during any period set forth below to exceed
the amount set forth opposite such period:
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Maximum Capital
Period Expenditures
------ ------------
Fiscal quarter ending September 30, 2001 $426,000,000
Fiscal quarter ending December 31, 2001 $126,000,000
Fiscal year ending December 31, 2002 $88,000,000
Fiscal year ending December 31, 2003 $98,000,000
Fiscal year ending December 31, 2004 $720,000,000
Fiscal year ending December 31, 2005 $104,000,000
Fiscal year ending December 31, 2006 $169,000,000
If the aggregate amount of Capital Expenditures for any fiscal
quarter or fiscal year (herein, a "FISCAL PERIOD") set forth above shall
be less than the amount set forth opposite such Fiscal Period, then 50% of
the shortfall shall be added to the amount of Capital Expenditures
permitted for the immediately succeeding (but not any other) Fiscal Period
and, for purposes hereof, the amount of Capital Expenditures made during
any Fiscal Period shall be deemed to have been made first from the
carryover from any previous Fiscal Period and last from the permitted
amount for such Fiscal Period.
The $426,000,000 figure set forth in the Schedule above for the
fiscal quarter ending September 30, 2001 has been prepared under the
assumption that not less than $201,000,000 of the equipment purchased
from, or delivered by, Nortel Networks during such fiscal quarter would be
treated as Capital Expenditures under GAAP. To the extent that, by reason
of the execution and delivery of this Agreement such assumption is
incorrect, then such $426,000,000 figure shall be reduced on a
dollar-for-dollar basis by the amount of such equipment so purchased or
delivered that is not treated as a Capital Expenditure under GAAP."
15. AMENDMENTS TO SCHEDULE 4.01(k) AND SCHEDULE 4.01(v). Each of SCHEDULE
4.01(k) and SCHEDULE 4.01(v) of the Note Agreement is hereby amended and
restated to read in its entirety as set forth on SCHEDULE 4.01(k) and SCHEDULE
4.01(v), respectively, attached hereto.
16. AMENDMENT TO NOTE AGREEMENT. The Note Agreement is hereby amended by
adding SCHEDULES 4.01(j) 6.01, 6.02 and 6.08 thereto, each as set forth on
SCHEDULES 4.01(j), 6.01, 6.02 and 6.08, respectively, attached hereto.
17. CONDITIONS PRECEDENT. The effectiveness of this Amendment is subject
to the satisfaction of each of the following conditions precedent, all of which
conditions precedent must be satisfied (unless otherwise agreed by the
Administrative Agent) on or before September 28, 2001: The Administrative Agent
shall have received all of the following, each dated (where
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applicable and unless otherwise indicated) the date of this Amendment, in form
and substance satisfactory to the Administrative Agent:
(a) AMENDMENT. This Amendment executed by the parties hereto; and
(b) ADDITIONAL INFORMATION. Such additional agreements, documents,
instruments and information (if any) as the Administrative Agent may reasonably
request in connection with this Amendment.
18. REPRESENTATIONS AND WARRANTIES. The Issuer hereby represents and
warrants to, and agrees with, the Administrative Agent and the Purchasers that,
as of the date of and after giving effect to this Amendment (a) the execution,
delivery and performance of this Amendment has been authorized by all requisite
corporate action on the part of the Issuer and will not violate the Issuer's
corporate charter or bylaws; (b) the term Note Documents as defined in the Note
Agreement and as used in any of the Note Documents includes, without limitation,
this Amendment; (c) all representations and warranties set forth in the Note
Documents are true and correct as if made again on and as of such date (except
if and to the extent that such representations and warranties were expressly
made only as of another specific date); (d) no Default or Event of Default has
occurred and is continuing; (e) there are no offsets, counterclaims or defenses
of any type to the Obligations under the Note Agreement; and (f) the Note
Agreement, the Security Documents and the other Note Documents (as amended by
this Amendment) are and remain legal, valid, binding and enforceable obligations
of the Issuer and the other Obligors (as applicable) which are parties thereto
in accordance with their terms.
19. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
20. COUNTERPARTS. This Amendment may be executed in any manner of
counterparts, all of which when taken together shall constitute one agreement,
and any of the parties hereto may execute this Amendment by signing any such
counterpart.
21. NO ORAL AGREEMENTS. THIS AMENDMENT, TOGETHER WITH THE NOTE AGREEMENT
AND THE OTHER NOTE DOCUMENTS AS WRITTEN, REPRESENT THE FINAL AGREEMENTS BETWEEN
AND AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER THEREOF AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN (A)
THE ISSUER OR ANY OTHER OBLIGOR AND (B) THE ADMINISTRATIVE AGENT OR ANY
PURCHASER.
22. AGREEMENT REMAINS IN EFFECT, NO WAIVER. Except as expressly provided
herein, all terms and provisions of the Note Agreement and the other Note
Documents shall remain unchanged and in full force and effect and are hereby
ratified and confirmed. No waiver by the Administrative Agent or any Purchaser
of any Default or Event of Default shall be deemed to be a waiver of any other
Default or Event of Default. No delay or omission by the Administrative Agent or
any Purchaser in exercising any power, right
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or remedy shall impair such power, right or remedy or be construed as a waiver
thereof or an acquiescence therein, and no single or partial exercise of any
such power, right or remedy shall preclude other or further exercise thereof or
the exercise of any other power, right or remedy under the Note Agreement, the
Note Documents or otherwise.
23. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties made in this Amendment or any other Note Document shall survive the
execution and delivery of this Amendment and the other Note Documents, and no
investigation by the Administrative Agent or any Purchaser or any closing shall
affect the representations and warranties or the right of the Administrative
Agent and the Purchasers to rely upon such representations and warranties.
24. REFERENCE TO NOTE AGREEMENT. This Amendment shall constitute a Note
Document. Each of the Note Documents, including the Note Agreement and any and
all other agreements, documents or instruments now or hereafter executed and/or
delivered pursuant to the terms hereof or pursuant to the terms of the Note
Agreement as amended hereby, are (if and to the extent necessary) hereby amended
so that any reference in such Note Documents to the Note Agreement shall mean a
reference to the Note Agreement as amended hereby.
25. SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
26. SUCCESSORS AND ASSIGNS. This Amendment is binding upon and shall inure
to the benefit of the Issuer, the Purchasers, the Administrative Agent and their
respective successors and assigns; provided, however, that the Issuer may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Purchasers.
27. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
ISSUER:
METROMEDIA FIBER NETWORK
SERVICES, INC.
By: /s/ Xxxx Xxxxx
----------------------------------
Name: Xxxx Xxxxx
--------------------------------
Title: President and CEO
-------------------------------
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NORTEL NETWORKS INC.,
as the Administrative Agent and as
Purchaser
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxxx X. Xxxxx
--------------------------------
Title: Director, Customer Finance
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