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EXHIBIT 10.7
CREDIT AGREEMENT
dated as of September 29, 2000
among
GT GROUP TELECOM SERVICES CORP.
as the Borrower
GT GROUP TELECOM INC.
as a Guarantor
GT GROUP TELECOM SERVICES (USA) CORP.
as a Guarantor
and
CISCO SYSTEMS CAPITAL CORPORATION,
as the Agent and a Lender,
and other
LENDERS that may become parties hereto
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TABLE OF CONTENTS
PAGE
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ARTICLE I DEFINITIONS......................................
SECTION 1.01 Defined Terms...............................
SECTION 1.02 Terms Generally.............................
ARTICLE II THE LOAN FACILITY...............................
SECTION 2.01 Commitment..................................
SECTION 2.02 Loans.......................................
SECTION 2.03 Requests for Loans..........................
SECTION 2.04 Funding of Loans............................
SECTION 2.05 Interest Elections..........................
SECTION 2.06 Guaranties..................................
SECTION 2.07 Termination, Reduction and Increase of
Commitments............................................
SECTION 2.08 Repayment of Loans; Evidence of Debt........
SECTION 2.09 Repayment of Loans..........................
SECTION 2.10 Prepayment of Loans.........................
SECTION 2.11 Fees........................................
SECTION 2.12 Interest....................................
SECTION 2.13 Alternate Rate of Interest..................
SECTION 2.14 Increased Costs.............................
SECTION 2.15 Break Funding Payments; Prepayment Fees.....
SECTION 2.16 Taxes.......................................
SECTION 2.17 Payments Generally; Pro Rata Treatment;
Sharing of Setoffs.....................................
SECTION 2.18 Mitigation Obligations; Replacement of the
Lenders................................................
ARTICLE III REPRESENTATIONS AND WARRANTIES.................
SECTION 3.01 Representations and Warranties..............
SECTION 3.02 Survival and Deemed Representations and
Warranties.............................................
ARTICLE IV CONDITIONS......................................
SECTION 4.01 Conditions Precedent to First Loan..........
SECTION 4.02 Conditions for Subsequent Loans.............
ARTICLE V COVENANTS........................................
SECTION 5.01 Affirmative Covenants.......................
SECTION 5.02 Negative Covenants..........................
SECTION 5.03 Stage I Financial Covenants.................
SECTION 5.04 Stage II Financial Covenants................
SECTION 5.05 Ongoing Financial Covenants.................
ARTICLE VI SECURITY........................................
SECTION 6.01 Guarantees and Security Required............
SECTION 6.02 Registration and Compliance with Laws.......
SECTION 6.03 Further Documentation.......................
ARTICLE VII EVENTS OF DEFAULT..............................
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE VIII THE AGENT.....................................
ARTICLE IX MISCELLANEOUS...................................
SECTION 9.01 Notices.....................................
SECTION 9.02 Waivers; Amendments.........................
SECTION 9.03 Expenses; Indemnity; Damage Waiver..........
SECTION 9.04 Successors and Assigns......................
SECTION 9.05 Survival....................................
SECTION 9.06 Counterparts; Integration; Effectiveness....
SECTION 9.07 Severability................................
SECTION 9.08 Right of Setoff.............................
SECTION 9.09 Governing Law...............................
SECTION 9.10 Headings....................................
SECTION 9.11 Confidentiality.............................
SECTION 9.12 Interest Rate Limitation....................
SECTION 9.13 Currency Conversions........................
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CREDIT AGREEMENT dated as of September 29, 2000
among
GT GROUP TELECOM SERVICES CORP., as the Borrower,
and
GT GROUP TELECOM INC., as a Guarantor
and
GT GROUP TELECOM SERVICES (USA) CORP., as a Guarantor
and
CISCO SYSTEMS CAPITAL CORPORATION, as the Agent and a Lender,
and
Other LENDERS party hereto.
WITNESSES, that for valuable consideration (the receipt and sufficiency of
which are hereby acknowledged), the Borrower, the Parent-Guarantor, GT (US), the
Agent and the Lenders hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
1.01.1 "1999 CREDIT AGREEMENT" means the US$15,000,000 credit agreement
dated July 27, 1999 between the Agent and the Borrower.
1.01.2 "ACCESS LINE" means a telephone line or equivalent unit of capacity
made available by a Credit Party to a bona fide active customer in good
standing, for the purpose of providing to or from such customer over such line
the transmission of voice, video, and other data and telecommunications
services, and "ACCESS LINES" means all such telephone lines or equivalent units
of capacity collectively, PROVIDED THAT for the purposes of Section 5.05(d), the
number of Access Lines attributable to a Credit Party that is not a Wholly-Owned
Subsidiary of the Borrower or the Parent Guarantor shall be based upon the
percentage of their combined ownership interest in such Credit Party.
1.01.3 "ACQUISITION" means, with respect to any person, any purchase or
other acquisition regardless of how accomplished or effected (including any such
purchase or other acquisition effected by way of amalgamation, merger or other
form of corporate reorganization), of (a) any other person (including any
purchase or acquisition of such number of the issued and outstanding securities
of, or such portion of an equity interest in, such other person that such other
person becomes a Subsidiary of the purchaser) or of all or substantially all of
the property of any other person, or (b) any division, business, operation or
undertaking of any other person or of all or substantially all of the property
of any division, business, operation or undertaking of any other person.
1.01.4 "ADDITIONAL ASSET" means any real property, improvement thereto or
tangible personal property used in the Credit Parties' respective businesses.
1.01.5 "AFFILIATE" means, with respect to a specified person, another
person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the person specified. The
Guarantors and their respective Affiliates shall be considered to be Affiliates
of the Borrower for all purposes hereof.
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1.01.6 "AGENT" means Cisco Systems Capital Corporation (or its successor),
in its capacity as the Agent for the Lenders hereunder.
1.01.7 "AGREEMENT" means this Credit Agreement.
1.01.8 "APPLICABLE LAW" means, with respect to any person, property,
transaction, event or other matter, any law, rule, statute, regulation, order,
judgment, decree, treaty, directive or other requirement having the force of law
relating or applicable to such person, property, transaction, event or other
matter, and shall also include any interpretation thereof by any person having
jurisdiction over it or charged with its administration or interpretation.
1.01.9 "ASSET DISPOSITION TRIGGER EVENT" means:
(i) any direct or indirect sale, transfer or other disposition or series
of related sales, transfers or dispositions (including pursuant to a sale and
leaseback transaction) of any property or asset of any Credit Party (other than
(a) dispositions of inventory, obsolete or used or surplus equipment in the
ordinary course of business, and (b) dispositions by one Credit Party to another
Credit Party); or
(ii) any casualty or other damage to, or any taking under power of eminent
domain or by condemnation, expropriation or similar proceeding of, any property
or asset of any Credit Party;
PROVIDED that (a) any such event or events involving Net Proceeds up to an
aggregate amount not to exceed $10,000,000 per fiscal year of the Borrower,
shall not constitute an "Asset Disposition Trigger Event", (b) any such event
referred to in clause (i) above shall not constitute an "Asset Disposition
Trigger Event" if the relevant Credit Party notifies the Agent within 60 days
after such event that it plans to reinvest the Net Proceeds of such event in
Additional Assets as promptly as practicable, but in any event within 180 days,
after such event and (c) any such event referred to in clause (ii) above shall
not constitute an "Asset Disposition Trigger Event" if the relevant Credit Party
notifies the Agent, on or prior to the date that is ten Business Days after such
event, that it plans to apply the Net Proceeds of such event to repair, restore
or replace the affected property or asset or to reinvest such Net Proceeds in
Additional Assets as promptly as practicable, but in any event within 180 days,
after such event; PROVIDED FURTHER that, if a Credit Party delivers a notice
with respect to any such event, as contemplated by clause (b) or (c) of the
foregoing proviso, and if at the expiration of the 180-day period referred to in
such clause less than all the Net Proceeds of such event have been reinvested or
applied as provided therein, then an "Asset Disposition Trigger Event" shall be
deemed to have occurred at the expiration of such 180-day period with Net
Proceeds equal to the Net Proceeds that have not been so reinvested or applied.
1.01.10 "ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Schedule 1.01.10 hereto), and accepted by the Agent, in
the form of Schedule 1.01.10 hereto or any other form approved by the Agent.
1.01.11 "BA RATE LOAN" means any Loan with respect to which interest is
calculated hereunder for the time being on the basis of the BA Reference Rate.
1.01.12 "BA REFERENCE RATE" means for any Interest Period the average
bankers' acceptance discount rate as quoted on the CDOR page of Xxxxxx Money
Monitor Rates Service (or such other page as may, from time to time, replace
such page on the service for the purpose of displaying quotations for bankers'
acceptances accepted by leading Canadian financial institutions) at
approximately 10:00 a.m. (Toronto time) on the first day of such Interest Period
for bankers' acceptances having three month terms [NOTE: CISCO MAY PREFER TO
REFER TO TELERATE IF QUOTE AVAILABLE THERE].
1.01.13 "BANK COMMITMENT" means, at any time, the aggregate amount of
credit committed to the Borrower under the Bank Credit Agreement.
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1.01.14 "BANK CREDIT AGREEMENT" means the amended and restated credit
agreement dated as of February 3, 2000 as amended and restated as of September
29, 2000 among the Borrower, the Parent Guarantor, GT(US), Canadian Imperial
Bank of Commerce, Xxxxxxx Sachs Credit Partners L.P., Xxxxxxx Xxxxx Canada
Credit Partners Co., Royal Bank of Canada, The Toronto-Dominion Bank and those
persons a party thereto from time to time as lenders.
1.01.15 "BORROWER" means GT Group Telecom Services Corp., a Canadian
corporation.
1.01.16 "BORROWING DATE" means a date on which the Borrower borrows any
amount pursuant to this Agreement.
1.01.17 "BURNABY DEBT" means Debt owing to 316465 B.C. Ltd., Citizens Bank
Canada, Xxxxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx in an aggregate principal amount
not exceeding $770,000, incurred in connection with the Borrower's right to
purchase 3887 and 0000 Xxxxxx Xxxxxx, Xxxxxxx, X.X.
1.01.18 "BUSINESS" means the Borrower's and the Parent Guarantor's
business of the provision of "telecommunications services" (as defined under the
Telecommunications Act (Canada)) including the provision of subscriber equipment
related thereto.
1.01.19 "BUSINESS ACQUISITION" means an Acquisition made in connection
with, or that otherwise relates directly to, the Business provided that no
Default or Event of Default is continuing at the time such Acquisition is made
or could reasonably be expected to be caused by or to result from such
Acquisition.
1.01.20 "BUSINESS INVESTMENT" means an Investment made in connection with,
or that otherwise relates directly to, the Business provided that no Default or
Event of Default is continuing at the time such Investment is made or could
reasonably be expected to be caused by or to result from such Investment.
1.01.21 "BUSINESS DAY" means any day that is not a Saturday, Sunday or
other day on which commercial banks in Toronto, Ontario or San Jose, California
are authorized or required by law to remain closed.
1.01.22 "CAPITAL EXPENDITURE" means any expenditure made by a Credit Party
in connection with the acquisition, construction or improvement of any property
(including any property acquired pursuant to a Capitalized Lease Obligation)
which is required to be capitalized in accordance with GAAP, other than
expenditures made in connection with the Xxxx Acquisition, but for greater
certainty does not include an Acquisition, Investment, capitalized Interest
Expenses or capitalized financing expenses.
1.01.23 "CAPITALIZED LEASE OBLIGATION" means, for any person, any payment
obligation of such person under an agreement for the lease or rental of or right
to use property that, in accordance with GAAP, is required to be capitalized.
1.01.24 "CDN. DOLLARS" or "CDN. $" or "$" means lawful money of Canada.
1.01.25 "CHANGE IN CONTROL" means any event or series of events which
result in a person (or group of persons under common Control) other than the
Permitted Holders becoming the beneficial owner or owners, directly or
indirectly, of securities of the Parent Guarantor to which are attached 50% or
more of the votes that may be cast to elect directors of the Parent Guarantor.
1.01.26 "CHANGE IN LAW" means (a) the adoption of any law, statute, code,
ordinance, treaty, rule, order, regulation, decree, requirement, policy,
guideline, or directive (whether or not having the force of law) after the date
of this Agreement, (b) any change in any law, statute, code, ordinance, treaty,
rule, order, regulation, decree, requirement, policy, guideline, or directive
(whether or not having the force of law) or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender (or, for purposes of Section 2.14(b), by any lending
office of such Lender or by such Lender's holding company, if any)
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with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
1.01.27 "CISCO" means Cisco Systems Capital Corporation.
1.01.28 "CISCO COMMITMENT" means, at any time, the aggregate amount of
credit committed to the Borrower under this Agreement.
1.01.29 "CISCO PRODUCTS" means networking and telecommunications equipment
and other goods, spare parts, accessories, software and services which Cisco
Systems manufactures, assembles, sells, licenses or provides.
1.01.30 "CISCO SYSTEMS" means Cisco Systems, Inc. or an Affiliate of Cisco
Systems, Inc.
1.01.31 "COLLATERAL" means any and all "Collateral", as defined in any
Security Document.
1.01.32 "COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT" means the amended
and restated collateral agency and intercreditor agreement dated as of September
29, 2000 among the Borrower, the Parent Guarantor, GT (US), the representatives
referred to therein, the Collateral Agent and the Security Beneficiaries setting
out their respective rights and obligations with respect to the Security.
1.01.33 "COLLATERAL AGENT" means Montreal Trust Company of Canada, or such
other person as may be appointed as such pursuant to the terms of the Collateral
Agency and Intercreditor Agreement.
1.01.34 "COMBINED CAP" means, at any time, the aggregate of (i)
$75,000,000, plus (ii) the Net Proceeds in excess of $360,000,000 from the High
Yield Debt, plus (iii) the Net Proceeds of all other debt or equity financings
after February 3, 2000 of any Credit Party, less 50% of the Net Proceeds from
all Debt referred to in Subsections 2.10(c)(i) and 2.10(c)(ii) to the extent
such Net Proceeds in the aggregate exceed Cdn. $600,000,000 (or any Equivalent
Amount).
1.01.35 "COMMITMENT" means, with respect to each Lender, the commitment of
such Lender to make Loans hereunder, expressed as an amount representing the
maximum aggregate principal amount of Loans that such Lender agrees to make
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.07 and (b) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 9.04. The initial amount of
each Lender's Commitment is set forth on Schedule 2.01, or in the Assignment and
Acceptance pursuant to which such Lender shall have assumed its Commitment, as
applicable. The aggregate amount of all Commitments shall not exceed the amount
of the Facility.
1.01.36 "COMMITMENT FEE" means one of the fees referred to in the fee
letter agreement dated as of September 29, 2000 between Cisco and the Borrower.
1.01.37 "COMMITMENT PERIOD" means the period from and including the
Condition Date to but excluding the Commitment Termination Date.
1.01.38 "COMMITMENT TERMINATION DATE" means December 31, 2002 or, if
earlier, the date the Commitments are terminated hereunder.
1.01.39 "CONDITION DATE" means the date on which all conditions precedent
to the advance of the First Loan are fulfilled or waived by the Agent in
writing.
1.01.40 "CONTESTED" means contested in good faith by appropriate
proceedings promptly initiated and diligently conducted.
1.01.41 "CONTINGENT OBLIGATION" means, with respect to any person, any
obligation of such person guaranteeing or having the economic effect of
guaranteeing any Debt ("PRIMARY OBLIGATIONS") of any other person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly, including any
obligation of such person as an account party in respect of a letter of credit
issued to assure payment by the primary obligor of any such primary obligation,
and any obligation of
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such person, whether or not contingent (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor, or
(ii) to advance or supply funds for the purchase or payment of any such primary
obligation or to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor or to purchase property or services, in each case primarily for the
purpose of assuring the obligee under any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation provided that
any guarantee of debt owing by one Credit Party to another Credit Party or any
obligation in connection with the Existing LCs (but only to the extent of the
cash collateralization of the Existing LCs) shall not be a "Contingent
Obligation".
1.01.42 "CONTRACTUAL OBLIGATION" means, as to any person, any provision 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 and, for greater certainty,
includes provisions of Material Contracts.
1.01.43 "CONTROL" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
person, whether through the ability to exercise voting power, by contract or
otherwise. "CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
1.01.44 "CREDIT DOCUMENTS" means this Agreement, the Guarantees, the
Security, the Security Documents, the Collateral Agency and Intercreditor
Agreement, the agreement referred to in Section 2.11 hereof, all certificates
delivered from time to time by the Borrower or a Guarantor to the Agent or any
Lender pursuant this Agreement or the Security, and any other document
acknowledged by the Borrower or a Guarantor to be a Credit Document.
1.01.45 "CREDIT PARTIES" means the Borrower, the Parent Guarantor and all
other Guarantors.
1.01.46 "CRTC" means the Canadian Radio-television and Telecommunications
Commission.
1.01.47 "DEBT" means, with respect to any person, without duplication, (i)
an obligation of such person for borrowed money, (ii) an obligation of such
person evidenced by a note, bond, debenture or other similar instrument, (iii)
an obligation of such person for the deferred purchase price of property or
services, excluding trade payables and other accrued current liabilities
incurred in the ordinary course of business in accordance with customary
commercial terms, (iv) a Capitalized Lease Obligation of such person, (v) a
Contingent Obligation of such person, (vi) an obligation of such person or of
any other person secured by a Lien on any property of such person, even though
such person has not otherwise assumed or become liable for the payment of such
obligation, in which case the amount of Debt constituted thereby shall be the
lesser of the value of such person's interest in such property and the amount of
the obligation secured, (vii) the net obligation of such person under a Hedging
Arrangement (for greater certainty, to the extent that such person has a
positive entitlement under a Hedging Arrangement, such amount will be deducted
from its "Debt"), (viii) the maximum redemption price of any shares in the
capital of such person which are subject to mandatory redemption in cash or
redemption at the option of the holder in cash at any time prior to the Maturity
Date, or (ix) any other item which would in accordance with GAAP be classified
as a liability on the balance sheet of such person PROVIDED THAT "Debt" shall
not include debt of a Credit Party to another Credit Party, deferred tax
liabilities, deferred revenue or any obligation in connection with the Existing
LCs (but only to the extent of the cash collateralization of the Existing LCs).
1.01.48 "DEBT SERVICE REQUIREMENT" means, for any period, the sum of all
mandatory principal payments in respect of Debt required to be made by the
Credit Parties on a consolidated basis during such period.
1.01.49 "DEFAULT" means any event, act or condition which with the giving
of notice, lapse of time, or both, would constitute an Event of Default.
1.01.50 "DESIGNATED VENDOR" means a vendor of goods or services to the
Borrower designated in writing by Cisco Systems as a "Designated Vendor"
pursuant to this Agreement.
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1.01.51 "DESIGNATED VENDOR PRODUCTS" means goods or services purchased, or
to be purchased, by the Borrower from a Designated Vendor using proceeds of a
Loan.
1.01.52 "EBITDA" shall be calculated on a consolidated basis and means,
for any period, Net Income for such period PLUS, to the extent deducted in
determining such Net Income, the sum (without duplication) of (i) consolidated
income tax expense (which shall, for greater certainty, include capital tax
expenses), (ii) Interest Expense, (iii) depreciation and amortization expense,
and (iv) extraordinary, unusual or non-recurring losses MINUS, to the extent
added in determining such Net Income, (i) interest income, (ii) extraordinary,
unusual or non-recurring gains, and (iii) income attributable to Investments
(other than an Investment in a Subsidiary) except to the extent that such income
was received in the form of cash dividends or other similar cash distributions.
1.01.53 "ENVIRONMENTAL LAWS" shall mean all Applicable Law in respect of
the natural environment, public or occupational health or safety, and the
manufacture, importation, handling, transportation, storage, disposal and
treatment of Hazardous Substances.
1.01.54 "ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of any Credit Party or any of
their respective subsidiaries directly or indirectly resulting from or based
upon (a) violation of any Environmental Law, (b) the generation, use, handling,
transportation, storage, treatment or disposal of any Hazardous Substance, (c)
exposure to any Hazardous Substance, (d) the release or threatened release of
any Hazardous Substance into the environment, (e) the presence of any Hazardous
Substance on, at or under property owned, occupied, operated or controlled by
any Credit Party and (f) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
1.01.55 "EQUITY" means, at any time, the amount which would, in accordance
with GAAP, then be included as shareholders' equity on a consolidated balance
sheet of the Credit Parties including without limitation equity attributable to
the issuance of preferred shares but not including equity attributable to the
issuance of shares as payment-in-kind dividends on existing shares and
calculated without reference to cash lodged as security with respect to the
Existing LCs.
1.01.56 "EQUIVALENT AMOUNT" means, with respect to a specified amount of
Cdn. Dollars, the amount of any other currency that may be purchased with such
Cdn. Dollars at the Bank of Canada noon rate for the purchase of such other
currency with Cdn. Dollars in effect on the Business Day with respect to which
such computation is required for the purpose of this Agreement or, in the
absence of such a buying rate on such date, using such other rate as the Agent
may reasonably select.
1.01.57 "EVENT OF DEFAULT" has the meaning assigned to such term in
Article VII.
1.01.58 "EXCESS CASH FLOW" means, for any period, the sum (without
duplication) of:
(a) Net Income for such period adjusted to exclude any gains or losses
attributable to any casualty or other insured damage to any Credit Party's
property or an Asset Disposition Trigger Event (to the extent Net Proceeds to
the Credit Parties therefrom were not reinvested in Additional Assets of the
Credit Parties within the 180 day period following such Asset Disposition
Trigger Event); PLUS
(b) depreciation, amortization and other non-cash charges or losses
deducted in determining such consolidated Net Income for such period; PLUS
(c) the sum of (i) the amount, if any, by which Working Capital decreased
during such period plus (ii) the amount, if any, by which the consolidated
long-term deferred revenues of the Credit Parties increased during such period
plus (iii) the aggregate principal amount of Capital Lease Obligations and other
Debt incurred by the Credit Parties during such period to finance Capital
Expenditures, to the extent that principal payments in respect of such Debt
would not be excluded from clause (f) below when made plus (iv) the amount of
any cash payments received by the Credit Parties during such period in
connection with the termination of Hedging Arrangements to the extent not
included in such Net Income; MINUS
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(d) the sum of (i) any non-cash gains included in determining such Net
Income for such period plus (ii) the amount, if any, by which Working Capital
increased during such period plus (iii) the amount, if any, by which the
consolidated long-term deferred revenues of the Credit Parties decreased during
such period plus (iv) the amount of any cash payments made by any Credit Party
during such period in respect of any obligations that constituted accrued or
accreted interest and financing charges in a previous period, plus (v) the
amount of any cash payments made by the Credit Parties during such period in
connection with the termination of Hedging Arrangements to the extent not
deducted in determining Net Income, plus cash expenses with respect to debt or
equity financings paid during such period; MINUS
(e) Capital Expenditures for such period; MINUS
(f) the aggregate principal amount of Debt repaid or prepaid by the Credit
Parties during such period, excluding (i) Debt in respect of revolving credit
facilities to the extent that the amount of such Debt repaid or prepaid remains
available to be borrowed by a Credit Party under such facilities (including
under any replacement facilities), (ii) repayments or prepayments of Debt
financed by incurring other Debt, to the extent that mandatory principal
payments in respect of such other Debt would not be excluded from this clause
(f) when made; MINUS
(g) all Restricted Payments made during such period.
1.01.59 "EXCLUDED TAXES" means, with respect to the Agent, the Collateral
Agent, any Lender or any other recipient of any payment to be made by or on
account of any obligation of any Credit Party hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by any jurisdiction under the
laws of which such recipient is organized or in which its principal office is
located or, in the case of any Lender, in which its applicable lending office is
located and (b) any branch profits taxes or any similar tax imposed by any
jurisdiction; provided that neither any Lender nor any such other recipient
shall be deemed to be located in any jurisdiction solely as a result of
receiving payments under, or taking any other action related to, any Loan under
this Agreement or any Loan under any other agreement.
1.01.60 "EXISTING LCS" shall mean (i) the letter of credit in the amount
of $253,133 in favour of Leasetec Canada Ltd., and (ii) the letter of credit in
the amount of $200,000 in favour of Onset Capital Corporation, both issued by
The Toronto-Dominion Bank for the account of the Borrower, as renewed from time
to time.
1.01.61 "FACILITY" means the senior secured credit facility in an
aggregate principal amount of $120,000,000 created pursuant to this Agreement
and the Credit Documents.
1.01.62 "FIRST LOAN" means the first Loan made to the Borrower under the
Facility.
1.01.63 "FIXED CHARGE COVERAGE RATIO" means, at any time, the ratio of (i)
EBITDA, (determined with respect to the two most recently-completed financial
quarters of the Parent Guarantor on an annualized basis), minus Capital
Expenditures (determined with respect to the most recently-completed four
financial quarters of the Parent Guarantor), divided by (ii) Debt Service
Requirement plus Interest Expense (both as determined based upon the most
recently-completed four financial quarters of the Parent Guarantor), all
determined on a consolidated basis.
1.01.64 "FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than Canada or a province of Canada.
1.01.65 "FUNDED EQUITY" means, at any time Equity of the Credit Parties
directly attributable to the issuance of securities, determined on a
consolidated basis (and for greater certainty shall be determined without
reference to any retained earnings or losses.
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1.01.66 "FUNDING PROCEDURES AND POLICIES" means the Cisco Systems Capital
Corporation "Funding Procedures and Policies" as in effect from time to time, as
communicated in writing to Borrower.
1.01.67 "GAAP" means accounting principles which are recognized as being
generally accepted in Canada as set out in the handbook published by the
Canadian Institute of Chartered Accountants, consistently applied.
1.01.68 "GOVERNMENTAL AUTHORITY" means the government of Canada, the
United States of America, any other nation or any political subdivision thereof,
whether state, provincial or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
1.01.69 "GT(US)" means GT Group Telecom Services (USA) Corp., a Nevada
corporation.
1.01.70 "GUARANTEES" shall mean all guarantees now or hereafter delivered
to the Agent of payment of Indebtedness.
1.01.71 "GUARANTOR" means the Parent Guarantor, GT(US) and any other
person which guarantees payment of any or all Indebtedness and delivers
Security.
1.01.72 "HAZARDOUS SUBSTANCE" shall mean any solid, liquid, gas, odour,
heat, sound, vibration or radiation, or combination thereof, that may impair the
natural environment, injure or damage property or plant or animal life or harm
or impair the health of any individual.
1.01.73 "HEDGING ARRANGEMENT" means a Secured Hedging Arrangement or an
Unsecured Hedging Arrangement.
1.01.74 "HIGH YIELD DEBT" means all Debt of the Parent Guarantor arising
under, with respect to, or in connection with the Notes.
1.01.75 "IN WRITING" or "WRITTEN" means any form of written communication
or a communication by means of facsimile or telex device.
1.01.76 "INDEBTEDNESS" means all present and future indebtedness and
liability now or hereafter owing by the Borrower pursuant to or in respect of
this Agreement, whether direct or indirect, absolute or contingent, matured or
unmatured, secured or unsecured, and includes all principal, interest, fees and
expenses owing by the Borrower hereunder.
1.01.77 "INDEMNIFIED TAXES" means Taxes, including Other Taxes, other than
Excluded Taxes.
1.01.78 "INTEREST COVERAGE RATIO" means, at any time, the ratio of (i)
EBITDA (determined with respect to the most recently-completed two financial
quarters of the Parent Guarantor on an annualized basis) to (ii) Interest
Expense (determined with respect to the most recently completed four financial
quarters of the Parent Guarantor), all determined on a consolidated basis.
1.01.79 "INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Loan in accordance with Section 2.05.
1.01.80 "INTEREST EXPENSE" means, for any period, the aggregate amount
accrued (whether or not payable or paid) by the Parent Guarantor during such
period in accordance with GAAP on account of (i) interest expense including
amortization of debt discount costs, capitalized interest, standby fees,
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptances, but excluding the amortization of the equity
portion of the Notes and (ii) the interest expense components of all Capitalized
Lease Obligations, all determined on a consolidated basis.
1.01.81 "INTEREST PAYMENT DATE" means each Quarterly Date.
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1.01.82 "INTEREST PERIOD" means a three-month period commencing on January
1, April 1, July 1 and October 1 of each year and ending on the then next
following Quarterly Date.
1.01.83 "INVESTMENT" means, with respect to any person, the making by such
person of (a) any direct or indirect investment in or purchase or other
acquisition of the securities of or an equity interest in any other person, (b)
any loan or advance to, or arrangement for the purpose of providing funds or
credit to (excluding extensions of trade credit in the ordinary course of
business in accordance with customary commercial terms) any other person, or (c)
any capital contribution to (whether by means of a transfer of cash or other
property or any payment for property or services for the account or use of) any
other person. For greater certainty an Acquisition shall not be treated as an
Investment.
1.01.84 "JUDGMENT CURRENCY" has the meaning set forth in Section 9.13
herein.
1.01.85 "LENDERS" means the persons listed on Schedule 2.01 and any other
person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
1.01.86 "LICENSES" means any and all licenses, permits, easements, public
and private rights-of-way and other access agreements, registrations,
municipal/local and other government approvals, consents or other authority
necessary for the Credit Parties to operate the Network.
1.01.87 "LIEN" means any mortgage, charge, pledge, hypothecation, lien
(statutory or otherwise), security interest or other encumbrance of any nature
however arising, or any other security agreement or arrangement creating in
favour of any creditor a right in respect of any particular property that is
prior to the right of any other creditor in respect of such property, and
includes the right of a lessor relative to a Capitalized Lease Obligation but,
for greater certainty, excludes the interest of a lessor under a lease which is
not a Capitalized Lease Obligation and, in the case of securities, any purchase
option, call or similar right of a third party with respect to such securities.
1.01.88 "LOAN REQUEST" means a request by the Borrower for a Loan in
accordance with Section 2.03.
1.01.89 "LOAN" means any drawdown under the Facility.
1.01.90 "LUCENT COMMITMENT" shall mean, at any time, the aggregate amount
of credit committed to the Borrower under the Lucent Credit Agreement.
1.01.91 "LUCENT CREDIT AGREEMENT" shall mean the amended and restated U.S.
$315,000,000 credit agreement dated as of February 3, 2000 as amended and
restated as of September 29, 2000 among the Borrower, as borrower, the Parent
Guarantor and GT (US) as guarantors, Lucent Technologies Inc. as administrative
agent, and those persons party thereto as lenders from time to time.
1.01.92 "MATERIAL ADVERSE EFFECT" means a material adverse effect on (i)
the business, property, condition (financial or otherwise) or prospects of the
Credit Parties, considered as a whole, (ii) the ability of any Credit Party to
perform any of its financial obligations under any Credit Document to which it
is a party or (iii) the rights and benefits available to the Lenders under any
Credit Document.
1.01.93 "MATERIAL CONTRACTS" means those contracts and agreements listed
in Schedule 1.01.
1.01.94 "MATURITY DATE" means February 1, 2008.
1.01.95 "NET INCOME" means, for any period, the consolidated net income
(loss) of the Credit Parties for such period, calculated in accordance with
GAAP.
1.01.96 "NET PROCEEDS" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only
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as and when received, (ii) in the case of a casualty, insurance proceeds, and
(iii) in the case of a condemnation, expropriation or similar event,
condemnation or expropriation awards and similar payments, net of (b) the sum of
(i) all reasonable fees and out-of-pocket expenses paid by the Credit Parties to
third parties (other than Affiliates) in connection with such event, (ii) in the
case of a sale or other disposition of an asset (including pursuant to a
casualty, condemnation or expropriation), the amount of all payments required to
be made by any Credit Party as a result of such event to repay Debt (other than
Debt under this Agreement or which is repayable under a comparable provision of
the Bank Credit Agreement or the Lucent Credit Agreement) secured by such asset
or otherwise subject to mandatory prepayment as a result of such event, (iii) in
the case of an underwritten offering of securities, the amount of all
underwriting discounts and commissions, and (iv) the amount of all taxes paid
(or reasonably estimated to be payable) by the Credit Parties, and the amount of
any reserves established by any Credit Party to fund contingent liabilities
reasonably estimated to be payable, in each case during the year that such event
occurred or the next succeeding year and that are directly attributable to such
event (as determined reasonably and in good faith by a Senior Officer of the
Borrower).
1.01.97 "NETWORK" means any and all assets comprising the
telecommunications network, including voice and data services, constructed or to
be constructed in Canada by the Credit Parties, and any and all items and parts
thereof.
1.01.98 "NOTES" means those 13 1/4 % senior discount notes issued or to be
issued by the Parent Guarantor pursuant to the terms of an indenture dated as of
February 1, 2000 between the Parent Guarantor and The Chase Manhattan Bank, as
trustee.
1.01.99 "ORIGINAL CURRENCY" has the meaning set forth in Section 9.13
herein.
1.01.100 "OTHER TAXES" means any and all present or future recording,
stamp, documentary, excise, transfer, sales, property or similar taxes, charges
or levies arising from any payment made under any Credit Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any of such
documents.
1.01.101 "PARENT GUARANTOR" means GT Group Telecom Inc., a Canadian
corporation.
1.01.102 "PERMITTED ACQUISITIONS" means, at any time, the following:
(i) Acquisitions made in lieu of Capital Expenditures as set out in the
Plan;
(ii) any Acquisition to the extent that the cost of such Acquisition is
funded by the issuance of equity in any Credit Party;
(iii) Business Acquisitions PROVIDED THAT the aggregate amount of the cash
portions of the prices of all Business Acquisitions and all Business Investments
made on or after February 3, 2000 shall not exceed the Combined Cap (or any
Equivalent Amount) at any time; and
(iv) other Acquisitions PROVIDED THAT the aggregate amount of all such
Permitted Acquisitions permitted pursuant to this paragraph (iv) and Permitted
Investments described in paragraph (viii) of the definition thereof from
February 3, 2000 shall not exceed $10,000,000 (or any Equivalent Amount).
1.01.103 "PERMITTED CAPITALIZED LEASE OBLIGATIONS" means any Capitalized
Lease Obligations relating to (i) arrangements between the Borrower and
360networks Inc. and/or its affiliates or other similar arrangements between the
Borrower and other parties which may be treated as capital leases; or (ii)
leases of real estate.
1.01.104 "PERMITTED DEBT" means, at any time and without duplication, the
following:
(i) Security Beneficiary Debt in an aggregate principal amount not to
exceed $1,350,000,000 (or an Equivalent Amount) provided that:
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(A)the remaining weighted average life to maturity of such Debt (other
than the Security Beneficiary Debt committed on the date hereof),
calculated in accordance with accepted financial practice, exceeds
the remaining weighted average life to maturity of the Term
Commitments (as defined in the Bank Credit Agreement); and
(B)covenants given in connection with such Debt are not more onerous to
the Borrower or any other Credit Party than, and not in addition to,
the covenants contained in this Agreement;
(ii) Purchase Money Obligations; provided that:
(A)the aggregate amount of such Debt (other than Permitted Capitalized
Lease Obligations) does not exceed $110,000,000 (or an Equivalent
Amount) at any time;
(B)the aggregate amount of such Debt (other than Permitted Capitalized
Lease Obligations) owing to any one person in respect of assets
employed in the Network does not exceed $30,000,000 (or any
Equivalent Amount) at any time; and
(C)for the purposes of determining compliance with clauses (A) and (B)
hereof, Debt owing to a manufacturer of Telecommunications Equipment
shall not be considered to be a Purchase Money Obligation where such
Debt has been outstanding for less than 90 days;
(iii) Debt owing in connection with any Hedging Arrangement;
(iv) Debt from one Credit Party to another Credit Party;
(v) High-Yield Debt;
(vi) Debt of the Parent Guarantor for other borrowed money in an aggregate
principal amount not to exceed $1 billion (or an Equivalent Amount) so long as
no Default or Event of Default is continuing at the date of incurrence thereof
or would be created thereby, provided that (A) the payment terms of such Debt do
not require any principal repayments while any Indebtedness remains outstanding
hereunder, (B) such Debt is unsecured, and (C) the covenants given in connection
with such Debt are not more onerous to the Borrower or any other Credit Party
than, and not in addition to, the covenants contained in this Agreement or the
Notes;
(vii) Unsecured Debt of a Credit Party that has been consented to in
advance by the Lenders;
(viii) Permitted Refinancing Debt;
(ix) unsecured Debt of a Credit Party that has become a Subsidiary of the
Parent Guarantor or the Borrower by virtue of an Acquisition and which is in
existence at the time of such Acquisition;
(x) the Burnaby Debt; and
(xi) Permitted Capitalized Lease Obligations in an aggregate amount not to
exceed $250,000,000 (or any Equivalent Amount).
1.01.105 "PERMITTED HOLDERS" means, collectively, Canadian Imperial Bank
of Commerce, GS Capital Partners III, L.P., NB Capital Partners Inc., MGN Group
L.L.C. and Xxxx Fiberlink Ltd. and their respective Affiliates.
1.01.106 "PERMITTED INVESTMENTS" means, at any time, the following:
(i) Investments permitted under the Plan;
(ii) Investments in obligations issued by the Government of Canada or the
United States of America, or an instrumentality or agency of either such
country, maturing within 365 days of the date of acquisition of such obligation,
and guaranteed fully as to principal, interest and premium (if any), by the
Government of Canada or the United States of America;
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(iii) Investments in certificates or other evidences of deposit issued or
acceptances accepted by or guaranteed by, or cash deposits with, any bank to
which the Bank Act (Canada) applies or by any company licensed to carry on the
business of a trust company in one or more provinces of Canada or by any bank or
trust company organized under the laws of the United States or any state thereof
or the District of Columbia or the United Kingdom, in each case, having combined
capital and surplus of not less than $750,000,000 (or the Equivalent Amount in
another currency), payable on demand or maturing within 365 days of the date of
purchase;
(iv) Investments in commercial paper given a long-term rating band of not
worse than A, or equivalent short-term rating, by an established national credit
rating agency in Canada or the United States and maturing not more than 365 days
from the date of acquisition thereof;
(v) loans, guarantees and reasonable advances to employees of the Credit
Parties made in the ordinary course of business in the aggregate principal
amount not exceeding $25,000,000 (or any Equivalent Amount in another currency)
at any time;
(vi) any Investment to the extent that the cost of such Investment is
funded by the issuance of equity in any Credit Party;
(vii) Business Investments provided that the aggregate amount of the cash
portions of the prices of all Business Investments and all Business Acquisitions
made on or after February 3, 2000 shall not exceed the Combined Cap (or any
Equivalent Amount) at any time; and
(viii) other Investments provided that the aggregate amount of all such
Permitted Investments permitted pursuant to this paragraph (viii) and Permitted
Acquisitions described in paragraph (iv) of the definition thereof from February
3, 2000 shall not exceed $10,000,000 (or any Equivalent Amount).
1.01.107 "PERMITTED LIENS" means, at any time, the following:
(i) Liens for taxes not overdue, or which are being contested if adequate
reserves with respect thereto are maintained by the applicable Credit Party in
accordance with GAAP and the enforcement of any related Lien is stayed;
(ii) undetermined or inchoate Liens arising in the ordinary course of
business which relate to obligations not overdue or a claim for which has not
been filed or registered pursuant to Applicable Law or which are being contested
if adequate reserves with respect thereto are maintained by the applicable
Credit Party in accordance with GAAP and the enforcement of any related Lien is
stayed;
(iii) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
construction or other similar Liens arising in the ordinary course of business
which relate to obligations not overdue or which are being contested if adequate
reserves with respect thereto are maintained by the applicable Credit Party in
accordance with GAAP and the enforcement of any related Lien is stayed;
(iv) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of
the business of any of the Credit Parties;
(v) zoning and building by-laws and ordinances and municipal by-laws and
regulations so long as the same are complied with;
(vi) statutory Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other social security legislation;
(vii) the reservations and exceptions contained in, or implied by statute
in, the original disposition from the Crown and grants made by the Crown of
interests so reserved or excepted;
(viii) Liens created by the Security;
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(ix) any Lien to secure any Purchase Money Obligation permitted under
Section 5.02(a) provided that such Lien is created not later than 180 days after
the related Purchase Money Obligation is incurred and does not affect any
property other than the property financed by the related Purchase Money
Obligation;
(x) Liens securing the Existing LCs;
(xi) Liens securing the Burnaby Debt;
(xii) Liens in favour of 360networks Inc. and/or its affiliates granted
pursuant to the Dark Fibre Sale and Indefeasible Right to Use Agreements dated
May 24, 2000 as in effect on the date of this Agreement (collectively, the "360
Agreements") between the Borrower and 360networks Inc. provided that such Liens
attach only to the assets that are the subject matter of the 360 Agreements and
arise only after the Acceptance Date (as defined by the 360 Agreements);
(xiii) the Lien in favour of the City of Vancouver granted in connection
with the municipal access agreement dated as of October 22, 1997; and
(xiv) Liens in respect of which the Lenders have given their specific
written consent.
1.01.108 "PERMITTED REFINANCING DEBT" means Debt incurred by a Credit
Party at any time while no Default or Event of Default is continuing and used to
refinance existing Permitted Debt referred to in clauses (i), (v) or (x) of the
definition thereof, PROVIDED THAT:
(i) the principal amount of such Permitted Refinancing Debt does not
exceed the then outstanding principal amount of the Permitted Debt being
refinanced together with the reasonable expenses associated with such
refinancing;
(ii) the weighted average life to the maturity of the Permitted
Refinancing Debt, calculated in accordance with accepted financial practice,
exceeds the weighted average life to maturity of the Permitted Debt being
refinanced; and
(iii) the terms, conditions and provisions creating or evidencing such
Permitted Refinancing Debt are not more restrictive, in aggregate, than the
terms, conditions and provisions applicable to the Permitted Debt being
refinanced.
1.01.109 "PERSON" is to be broadly interpreted and shall include an
individual, a corporation, a partnership, a trust, an unincorporated
organization, a joint venture, the government of a country or any political
subdivision thereof, or an agency or department of any such government, and the
executors, administrators or other legal representatives of an individual in
such capacity.
1.01.110 "PLAN" means the Borrower's five city phase one business plan
dated January 10, 2000 and relating to Vancouver (including Victoria), Edmonton,
the greater Calgary area, Montreal, and the greater Toronto area, copies of
which have been provided to the Agent.
1.01.111 "PRIME RATE" means the fluctuating rate of interest per annum
publicly announced from time to time by Canadian Imperial Bank of Commerce as
its reference rate in effect for determining Cdn. Dollar denominated commercial
loans made by such bank in Canada and commonly referred to by such bank as its
"prime rate." Each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
1.01.112 "PRIME RATE LOAN" shall mean any Loan with respect to which
interest is calculated hereunder for the time being on the basis of the Prime
Rate.
1.01.113 "PROPERTY" shall include any asset, property, revenue or
undertaking, whether tangible or intangible, real or personal.
1.01.114 "PURCHASE MONEY OBLIGATION" means any Debt (including without
limitation a Capitalized Lease Obligation) incurred or assumed to finance all or
any part of the acquisition price of any equipment or services acquired by any
Credit Party after the date of this Agreement or to finance
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all or any part of the cost of any improvement to any equipment of any Credit
Party, provided that such obligation is incurred or assumed prior to or within
180 days after the later of acquisition of such equipment or the completion of
such improvement and the date of this Agreement and does not exceed the lesser
of the acquisition price payable by such Credit Party for such equipment,
services or improvement and the fair market value of such equipment, services or
improvement; and includes any extension, renewal or refunding of any such
obligation so long as the principal amount thereof outstanding on the date of
such extension, renewal or refunding is not increased except by accrued and
unpaid interest and refinancing costs. For greater certainty, Purchase Money
Obligations shall not include Debt incurred or assumed in a transaction of sale
and leaseback of any property entered into more than 60 days after the later of
the acquisition of such property and the date of this Agreement.
1.01.115 "QUARTERLY DATE" means the last day of each of March, June,
September and December.
1.01.116 "RADIOCOMMUNICATION ACT OF CANADA" means the Radiocommunication
Act (Canada), R.S.C. 1985, c. R-2, as amended.
1.01.117 "REGISTER" has the meaning set forth in Section 9.04.
1.01.118 "RELATED PARTIES" means, with respect to any specified person,
such person's Affiliates and the respective directors, officers, employees,
agents and advisors of such person and such person's Affiliates.
1.01.119 "RELEASE" means an actual or potential discharge, deposit, spill,
leak, pumping, pouring, emission, emptying, injection, escape, leaching, seepage
or disposal of a Hazardous Substance which is or may be in breach of any
Environmental Laws.
1.01.120 "REQUIRED LENDERS" means at any time the Lenders having Loans and
Undrawn Amounts comprising in excess of 50% of the sum of all Loans outstanding
and all Undrawn Amounts at such time.
1.01.121 "RESTRICTED PAYMENT" means, with respect to any person, any
payment by such person (i) of any dividends on any shares of its capital other
than dividends consisting of shares of its capital, (ii) on account of, or for
the purpose of setting apart any property for a sinking fund or other analogous
fund for the purchase, redemption, retirement or other acquisition of any shares
of its capital or any warrants, options of rights to acquire any such shares or
the making by such person of any other distribution in respect of any shares of
its capital, or (iii) on account of the principal portion of any Debt excluding
any Indebtedness.
1.01.122 "REVENUES" means, for any period, the consolidated revenue of the
Parent Guarantor for such period, calculated in accordance with GAAP.
1.01.123 "SECURED HEDGING ARRANGEMENT" shall mean any arrangement between
a Credit Party and a Security Beneficiary which is a rate swap transaction,
basis swap, forward rate transaction, interest rate option, forward foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any similar transaction (including any option with respect to any of such
transactions or arrangements) designed and entered into to protect or mitigate
against risks in interest or currency exchange fluctuations and under which the
obligations of such Credit Party are secured in favour of the Collateral Agent.
1.01.124 "SECURITY" shall have the meaning specified in Article VI.
1.01.125 "SECURITY BENEFICIARIES" means all Secured Parties (as defined by
the Collateral Agency and Intercreditor Agreement) in their capacities as
Secured Parties under such agreement.
1.01.126 "SECURITY BENEFICIARY DEBT" means Debt (other than Debt owing in
connection with Secured Hedging Arrangements) owing to Security Beneficiaries
and secured by the Security.
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1.01.127 "SECURITY BENEFICIARY PERCENTAGE" means:
(a) at any time prior to the occurrence of an Event of Default which then
continues, the percentage that $180,000,000 is of the sum of the principal
amount of all Security Beneficiary Debt then outstanding and the aggregate
principal amount of undrawn credit committed by all Security Beneficiaries
(other than credit committed pursuant to Hedging Arrangements); and
(b) at any time after the occurrence of an Event of Default which then
continues, the percentage that the then outstanding Indebtedness is of all then
outstanding Security Beneficiary Debt.
1.01.128 "SECURITY DOCUMENT" means any document comprising any Security or
related to any Security.
1.01.129 "SENIOR DEBT" means, at any time and determined on a consolidated
basis, the aggregate amount of Debt of the Parent Guarantor secured by any Lien
or Liens (including for greater certainty the Debt of the Borrower under this
Agreement, the Bank Credit Agreement and the Lucent Credit Agreement) other than
Debt arising under the Notes.
1.01.130 "SENIOR DEBT LEVERAGE RATIO" means, at any time, the ratio of
Senior Debt to EBITDA (determined with respect to the most recently completed
two financial quarters of the Parent Guarantor on an annualized basis).
1.01.131 "SENIOR DEBT RATIO" means, at any time, the ratio of Senior Debt
to Total Capitalization.
1.01.132 "SENIOR OFFICER" means the president, chief executive officer,
chief financial officer, chief operating officer or any senior vice-president,
executive vice-president or vice-president.
1.01.133 "XXXX ACQUISITION" means the purchase by the Parent Guarantor of
certain of the assets and business of Xxxx Fiberlink Ltd. in accordance with and
pursuant to the asset purchase and subscription agreement dated as of December
22, 1999 among Xxxx Fibrelink Ltd., the Borrower and the Parent Guarantor.
1.01.134 "STAGE II DATE" means the first day of the financial quarter
following the first two consecutive financial quarters of the Parent Guarantor
in which EBITDA (determined with respect to each such financial quarter) has
been positive.
1.01.135 "SUBSIDIARY" of any person means any other person of which shares
or other equity units having ordinary voting power to elect a majority of the
board of directors or other individuals performing comparable functions, or
which are entitled to or represent more than 50% of the owners' equity or
capital or entitlement to profits, are owned beneficially or controlled,
directly or indirectly, by any one or more of such first person and the
Subsidiaries of such first person, and shall include any other person in like
relationship to a Subsidiary of such first person.
1.01.136 "SUPPLY AGREEMENT" means a supply contract now or hereafter
entered into between the Borrower and Cisco Systems.
1.01.137 "TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
1.01.138 "TELECOMMUNICATIONS BUSINESS" means the business of:
(i) transmitting, or providing products or services relating to the
transmission or storage of, voice, data or internet applications through owned
or leased transmission facilities, including wireless facilities;
(ii) creating, developing, marketing or providing communications-related
network equipment, software or other devices or products for use in a
telecommunications business; or
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(iii) evaluating, participating or pursuing any other activity or
opportunity that is primarily related to those identified in paragraphs (i) or
(ii) of this definition.
1.01.139 "TELECOMMUNICATIONS EQUIPMENT" means all assets, rights
(contractual or otherwise) and properties, whether tangible or intangible, used
or intended for use in connection with a Telecommunications Business.
1.01.140 "TOTAL CAPITALIZATION" means, at any time, the aggregate of (i)
Total Debt plus (ii) Funded Equity.
1.01.141 "TOTAL DEBT" means, at any time and determined on a consolidated
basis, the aggregate amount of Debt of the Parent Guarantor.
1.01.142 "TOTAL DEBT LEVERAGE RATIO" means, at any time and determined on
a consolidated basis, the ratio of Total Debt to EBITDA (determined with respect
to the most recently-completed two financial quarters of the Parent Guarantor on
an annualized basis).
1.01.143 "TOTAL DEBT RATIO" means, at any time, the ratio of Total Debt to
Total Capitalization.
1.01.144 "TRANSACTIONS" means the execution, delivery and performance by
each Credit Party of each of the Credit Documents to which it is to be a party,
the borrowing of Loans and the use of the proceeds thereof.
1.01.145 "UNDRAWN AMOUNT" means at any time the aggregate amount of all
Commitments, as reduced at or before such time by the provisions hereof and
less, without duplication, the aggregate principal amount of all Loans advanced
to the Borrower hereunder at or before such time.
1.01.146 "UNSECURED HEDGING ARRANGEMENT" shall mean any arrangement
between the Parent Guarantor and a counterparty which is a rate swap
transaction, basis swap, forward rate transaction, interest rate option, forward
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap transaction,
currency option or any other similar transaction (including any option with
respect to any of such transactions or arrangements) designed and entered into
to protect or mitigate against risks in interest or currency exchange
fluctuations and under which the obligations of the Parent Guarantor are
unsecured.
1.01.147 "U.S. DOLLARS" or "US$" refers to lawful money of the United
States of America.
1.01.148 "WHOLLY-OWNED SUBSIDIARY" means any Subsidiary of the Borrower or
of the Parent Guarantor of which all the issued and outstanding shares and
voting interests are owned beneficially and of record by the Borrower or Parent
Guarantor as the case may be.
1.01.149 "WORKING CAPITAL" means, at any time (i) the current assets of
the Parent Guarantor as of such date (excluding cash and Permitted Investments)
minus (ii) the current liabilities of the Parent Guarantor (excluding current
liabilities in respect of Debt), all determined on a consolidated basis in
accordance with GAAP.
SECTION 1.02 TERMS GENERALLY
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise:
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein);
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(b) any reference herein to any person shall be construed to include such
person's successors and assigns;
(c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof;
(d) all references herein to Articles, Sections, Exhibits and Schedules
shall be construed to refer to Articles and Sections of, and Exhibits and
Schedules to, this Agreement;
(e) the words "asset" and "property" shall be construed to have the same
meaning and effect and to refer to any and all tangible and intangible assets
and properties, including cash, securities, accounts, contract rights, licenses
and intellectual property; and
(f) all dollar amounts are expressed in Cdn. Dollars.
ARTICLE II
The Loan Facility
SECTION 2.01 COMMITMENT
(a) Subject to the provisions of this Agreement, the Lenders agree to make
the Loans to the Borrower at any time and from time to time during the
Commitment Period in an aggregate principal amount not to exceed $120,000,000.
The Facility is non-revolving and no principal amount repaid or prepaid may be
reborrowed.
(b) Notwithstanding any other provision herein or in any other Credit
Document, (i) no Lender shall be required to make any Loan at any time in an
amount exceeding such Lender's Commitment at such time and (ii) no Lender shall
be required to make any Loan that would result in the aggregate principal amount
of all outstanding Loans of all Lenders exceeding $120,000,000.
SECTION 2.02 LOANS
(a) Each Loan shall be made by the Lenders ratably in accordance with
their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.13, each Loan shall be a Prime Rate Loan or a BA
Rate Loan as the Borrower may request in accordance with subsection 2.03(iii)
hereof or convert in accordance with subsection 2.02(d) hereof. Each Lender at
its option may hold any BA Rate Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the provisions of this Agreement.
(c) BA Rate Loans and Prime Rate Loans may not be outstanding at the same
time.
(d) The Borrower shall, subject to the provisions of this Agreement, be
entitled to convert all BA Rate Loans to Prime Rate Loans and to convert all
Prime Rate Loans to BA Rate Loans.
(e) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request any Loan as a BA Rate Loan or convert any Loan
to a BA Rate Loan if the Interest Period with respect thereto would end after
the Maturity Date.
(f) Except for the proceeds of the First Loan, which shall be disbursed in
accordance with Section 4.01, the proceeds of each Loan shall be used by the
Borrower solely to purchase Cisco Products from Cisco Systems or to purchase
Designated Vendor Products from a Designated Vendor (to the extent permitted by
the designation by Cisco Systems of such Designated Vendor) and to pay any
non-refundable or non-creditable provincial sales tax included on any invoice in
respect of such Cisco Products or such Designated Vendor Products (except that
proceeds will not
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be used for goods and services tax, harmonized sales tax or other refundable or
similarly creditable sales tax).
SECTION 2.03 REQUESTS FOR LOANS
To request a Loan, the Borrower shall notify the Agent of such request by
telephone, not later than 2:00 p.m., Toronto time, five Business Days before the
date of the proposed Loan, provided that the Borrower may make no more than two
requests for Loans in any single calendar month. Each such telephonic Loan
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Agent of a written Loan Request in a form approved by the Agent
and signed by the Borrower. Each such telephonic and written Loan Request shall
specify the following information in compliance with Section 2.02:
(i) the aggregate amount of such Loan;
(ii) the date of such Loan, which shall be a Business Day;
(iii) in the case of the first Loan, whether such Loan is to be a Prime
Rate Loan or a BA Rate Loan.
If the Borrower does not specify whether the first Loan is to be a BA Rate
Loan or a Prime Rate Loan, then the first Loan shall be a Prime Rate Loan. Each
Loan Request shall be delivered to the Agent at least five Business Days prior
to the proposed Borrowing Date, shall include details with respect to the use of
the proceeds of the Loan (including a list of all relevant invoices in respect
of the Cisco Products, and copies of all relevant invoices in respect of
Designated Vendor Products, being purchased with the proceeds of the Loan) and
shall be in the form specified by the Agent or by the Funding Procedures and
Policies; and the Lenders shall have no obligation to make the Loan requested
unless the foregoing (including the proposed use of proceeds) are satisfactory
to Agent; PROVIDED no such notice shall be necessary to the extent a Loan
Request is prepared on Borrower's behalf by the Agent pursuant to Section
2.04(a). Promptly following receipt of a Loan Request in accordance with this
Section, the Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Loan.
SECTION 2.04 FUNDING OF LOANS
(a) Each Lender shall make each Loan to be made by it by transferring for
value immediately available Cdn. Dollars by 2:00 p.m., Toronto time in an
aggregate amount equal to the amount of any Loan to be made by it on such
Borrowing Date, to the account of the Agent designated by the Agent from time to
time (and until further notice, Account No. 000-000-0, Transit Xx. 0000, Xxxx
Xx. 000, Xxxxx Xx. XXXXXXX0 at Royal Bank of Canada, Royal Bank Plaza, 000 Xxx
Xxxxxx, Xxxxxxx. Provided that no costs in excess of costs associated with a
transfer to the accounts specified in the preceding sentence would be incurred
by the Borrower or any of the Lenders, the Agent may designate such other
accounts and offices as it may see fit for the purposes referred to in the
preceding sentence. Subject to any direction permitted hereunder and given to
the Agent by the Borrower, the Agent shall make all such amounts received by it
from the Lenders as aforesaid available to the Borrower for the purpose of
purchasing Cisco Products by promptly crediting the amounts so received to an
account of Cisco Systems as specified by Cisco Systems (pursuant to Section
2.02(f) above). Without limiting the generality of the foregoing, in the case of
any Loan made, or which could be made, hereunder for the purpose of paying the
purchase price of Cisco Products or Designated Vendor Products:
(i) the Lenders shall, pursuant to the Borrower's Loan Request, pay
the Loan proceeds directly to Cisco Systems and/or the applicable
Designated Vendors, as applicable; or
(ii) if the Agent does not receive, within 45 days after the invoice
date of any unpaid invoice issued by Cisco Systems or a Designated Vendor,
a Loan Request by the Borrower for a Loan to pay such invoice:
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(A)the Agent may deliver to the Borrower a notice by the Agent that
the Lenders intend to make a Loan to pay such invoice; and
(B)if the Agent does not receive from the Borrower, within 60 days
after such invoice date, a notice by the Borrower that it
disputes the Borrower's liability to Cisco Systems or such
Designated Vendor in respect to such invoice, the Lenders may,
without further notice to the Borrower and without further
request or direction from the Borrower, make the Loan to the
Borrower by paying the proceeds of the Loan directly to Cisco
Systems or such Designated Lender to pay the liability of the
Borrower to Cisco Systems or such Designated Lender evidenced by
such invoice.
To effect the Loan referred to in Subsection (ii), the Agent is hereby
authorized upon the written request of Cisco Systems to create a Loan Request,
in accordance with the provisions of Section 2.03, on behalf of Borrower for
transmission to the Lenders without being required to receive a signed Loan
Request from Borrower. The Borrower shall be liable for payment of all
Indebtedness in respect of such Loans whether made pursuant to a Loan Request
signed by the Borrower or a Loan Request signed by the Agent on behalf of the
Borrower. If Borrower provides written notice to Agent in accordance with
Subsection (ii)(B) that the Borrower disputes such liability , then no such Loan
shall be made until Borrower provides a signed Loan Request with respect to such
invoice. Borrower hereby irrevocably authorizes and directs Agent and the
Lenders to make direct payment to Cisco Systems of all Loan proceeds to be used
to purchase Cisco Products or to pay applicable taxes thereon. Borrower hereby
irrevocably authorizes and directs Agent and the Lenders to make direct payment
to a Designated Vendor of all Loan proceeds to be used to purchase Designated
Vendor Products from such Designated Vendor and to pay applicable taxes thereon.
The availability of Loans hereunder shall be subject to the Funding Procedures
and Policies.
(b) No Lender shall be responsible for any default by any other Lender in
its obligation to make a Loan available to the Borrower nor shall the Commitment
of any Lender be increased as a result of any such default, except as provided
in this Section 2.04(b). If any Lender shall fail to make available any Loan
when required under its Commitment, the Agent shall promptly notify the other
Lenders of such failure, and any Lender which has a Commitment, upon notice to
the Borrower, the Agent and the other Lenders which have Commitments, may make
available to the Borrower, no later than the earlier of (a) the Commitment
Termination Date and (b) two Business Days after the applicable Borrowing Date,
the amount (or if more than one Lender so elects, its pro rata share of the
amount as nearly as practicable in the opinion of the Agent) of the failed Loan.
The maturity date of the LIBOR Period applicable to such LIBOR Loans shall be
identical to the maturity date of the LIBOR Period for any LIBOR Loan that would
have been included in the failed Loan and that were included in the Loan made
available by the non-defaulting Lenders on the applicable Borrowing Date. The
Lenders, the Borrower and the Agent shall thereupon enter into documentation, in
form and substance satisfactory to the Agent, as may be appropriate to evidence
the adjustment of the Commitments necessitated by the additional Loan made by
any Lender. Nothing in this Section 2.04(b) shall be deemed to relieve any
Lender of its obligation to make available any Loan when required hereunder, or
to prejudice any rights which the Borrower, the Agent or any other Lender may
have against a defaulting Lender.
SECTION 2.05 INTEREST ELECTIONS
(a) The first Loan initially shall be either a Prime Rate Loan or a BA
Rate Loan as specified in the first Loan Request and, in the case of a BA Rate
Loan, shall have an initial Interest Period ending on the then next Quarterly
Date. Each subsequent Loan shall be of the same type as the Loan or Loans
outstanding when such subsequent Loan is made. The Borrower may, subject to
Subsection 2.02(c), voluntarily convert all outstanding Loans to the other type
as provided by this Agreement. Subject to Subsection 2.05(f), the Interest
Period of each BA Rate Loan shall end on the first Quarterly Date after the
commencement of such Interest Period and thereupon be extended to the then next
following Quarterly Date.
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(b) To make an election pursuant to this Section, the Borrower shall
notify the Agent of such election by telephone by the time that a Loan Request
would be required under Section 2.03. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Agent of a written Interest Election Request in a form approved
by the Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02:
(i) the Loans to which such Interest Election Request applies;
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day; and
(iii) whether the converted Loans are to be Prime Rate Loans or BA
Rate Loans.
(d) Promptly following receipt of an Interest Election Request, the Agent
shall advise each Lender of the details thereof and of such Lender's portion of
each resulting Loan.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a BA Rate Loan prior to the end of the Interest Period
applicable thereto, then unless such Loan is repaid as provided herein, at the
end of such Interest Period such Loan shall be converted to a Prime Rate Loan.
(f) Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing then, so long as such Event of Default is
continuing (i) no outstanding BA Rate Loan may be continued as a BA Rate Loan
and (ii) unless repaid, each BA Rate Loan shall be converted to a Prime Rate
Loan at the end of the Interest Period applicable thereto.
SECTION 2.06 GUARANTIES
The Parent Guarantor shall guarantee payment of all Indebtedness and such
Guarantee shall be secured by the Security.
SECTION 2.07 TERMINATION, REDUCTION AND INCREASE OF COMMITMENTS
(a) Unless previously terminated, the Commitments shall terminate on the
Commitment Termination Date and the Lenders shall have no obligation to make any
Loan after the Commitment Termination Date.
(b) The Commitment of each Lender shall be reduced on the date of each
Loan made by such Lender by an amount equal to such Loan.
(c) In the event that a prepayment or offer of prepayment is or would be
required pursuant to Subsection (b), (c), (d), (e) or (f) of Section 2.10, the
Commitments then in effect shall be reduced ratably by an aggregate amount equal
to the excess, if any, of (i) the amount of the required prepayment (or, in the
case of a required offer of prepayment, the amount of the required offer)
determined as if the aggregate principal amount of the Loans outstanding exceeds
the amount of the required prepayment or offer of prepayment, less (ii) the
aggregate principal amount of Loans actually prepaid (or, in the case of a
required offer of prepayment, the amount of the required offer or, in the case
of Subsection 2.10(f), the amount of the required future prepayment).
(d) The Borrower may at any time terminate, or from time to time reduce,
the Commitments.
(e) The Borrower shall notify the Agent of any election to terminate or
reduce the Commitments under paragraph (d) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any such notice, the Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section shall be
irrevocable. Any termination or reduction of the Commitments shall be permanent.
Each reduction of the Commitments pursuant to paragraph (c)
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or (d) of this Section shall be made ratably among the Lenders in accordance
with their respective Commitments.
(f) The aggregate amount of the Commitments will not exceed the amount of
the Facility. The Facility may be increased only upon agreement among the
parties hereto as evidenced by a valid and enforceable amendment to this
Agreement.
SECTION 2.08 REPAYMENT OF LOANS; EVIDENCE OF DEBT
(a) Borrower hereby unconditionally promises to pay to the Agent for the
account of each Lender the then unpaid principal amount of each Loan of such
Lender as provided in Sections 2.09 and 2.10.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) Agent shall maintain accounts in which it shall record (i) the amount
of each Loan made hereunder, whether the Loan is a BA Rate Loan or a Prime Rate
Loan and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Agent hereunder for the account of the Lenders and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligation of the Borrower to pay all Indebtedness in
accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Agent. Thereafter, the Loans evidenced by such promissory
note and interest thereon shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in such
form payable to the order of the payee named therein (or, if such promissory
note is a registered note, to such payee and its registered assigns).
SECTION 2.09 REPAYMENT OF LOANS
(a) [THE BORROWER SHALL, SUBJECT TO ARTICLE VII, REPAY THE PRINCIPAL
AMOUNT OF THE INDEBTEDNESS OUTSTANDING AS AT THE COMMITMENT TERMINATION DATE BY
PAYING:
(i) ON EACH QUARTERLY DATE FROM AND INCLUDING MARCH 31, 2003 TO AND
INCLUDING DECEMBER 31, 2003, 1.2225% OF THE PRINCIPAL AMOUNT OUTSTANDING AS
AT THE COMMITMENT TERMINATION DATE;
(ii) ON EACH QUARTERLY DATE FROM AND INCLUDING MARCH 31, 2004 TO AND
INCLUDING DECEMBER 31, 2004, 2.5% OF THE PRINCIPAL AMOUNT OUTSTANDING AS AT
THE COMMITMENT TERMINATION DATE;
(iii) ON EACH QUARTERLY DATE FROM AND INCLUDING MARCH 31, 2005 TO AND
INCLUDING DECEMBER 31, 2005, % OF THE PRINCIPAL AMOUNT OUTSTANDING AS
AT THE COMMITMENT TERMINATION DATE;
(iv) ON EACH QUARTERLY DATE FROM AND INCLUDING MARCH 31, 2006 TO AND
INCLUDING DECEMBER 31, 2006, % OF THE PRINCIPAL AMOUNT OUTSTANDING AS
AT THE COMMITMENT TERMINATION DATE; AND
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(v) ON EACH QUARTERLY DATE FROM AND INCLUDING MARCH 31, 2007 TO AND
INCLUDING DECEMBER 31, 2007, % OF THE PRINCIPAL AMOUNT OUTSTANDING AS
AT THE COMMITMENT TERMINATION DATE.]
(b) Subject to Article VII, the Borrower shall on the Maturity Date pay
all Indebtedness then outstanding.
(c) Any prepayment of a Loan shall be applied to reduce the subsequent
scheduled repayments of the Loans to be made pursuant to this Section in inverse
order of maturity.
SECTION 2.10 PREPAYMENT OF LOANS
(a) The Borrower shall have the right at any time and from time to time to
prepay any Loan in whole or in part, together with accrued interest thereon,
subject to the requirements of this Section; provided that, in the case of a BA
Rate Loan, such prepayment may only be made on the last day of the applicable
Interest Period.
(b) An Asset Disposition Trigger Event shall constitute an event of
failure under this Agreement and within 5 Business Days following any Asset
Disposition Trigger Event, the Borrower shall make an offer to the Agent to
prepay an aggregate principal amount of Loans equal to the Security Beneficiary
Percentage of the Net Proceeds resulting from such Asset Disposition Trigger
Event, and any such amount shall be applied in the manner specified in Section
2.10(e). For the avoidance of doubt, any failure of the Borrower to make such
offer to prepay or to effect such prepayment shall constitute an Event of
Default under this Agreement.
(c) If a Credit Party incurs after the date hereof any:
(i) unsecured Debt issued pursuant to a prospectus, offering
memorandum, registration statement or other similar document and that is
evidenced by a note, bond, debenture or other similar instrument and ranks
subordinate to or pari passu with the High-Yield Debt; or
(ii) secured Debt that is borrowed from a U.S. bank or other
financial institution pursuant to a credit facility,
an amount equal to the Security Beneficiary Percentage of 50% of the Net
Proceeds from all such Debt referred to in Subsections (i) and (ii) above, to
the extent such Net Proceeds in the aggregate exceed Cdn.$600,000,000 (or any
Equivalent Amount), shall be paid to the Agent within 5 Business Days following
the incurrence of such Debt.
(d) An amount equal to the Security Beneficiary Percentage of 25% of the
Excess Cash Flow for each financial year of the Borrower shall be paid to the
Agent not later than 30 days after the delivery of the audited financial
statements required pursuant to Section 5.01(a)(i) at the end of such financial
year.
(e) Subject to Section 2.10(f) below, all amounts received by the Agent
pursuant to Sections 2.10(c) or 2.10(d), and all prepayments made under Section
2.10(a), shall be applied in repayment on a pro rata basis to the outstanding
Loans; and all prepayments made pursuant to Section 2.10(b) or (g) shall be
applied in repayment on a pro rata basis to the outstanding Loans of the Lenders
that accept the related offer to prepay. For greater certainty, all prepayments
made pursuant to this Subsection shall be applied to reduce subsequent scheduled
repayments of the Loans to be made pursuant to Section 2.09 in inverse order of
maturity.
(f) If an Event of Default shall not have occurred and be continuing, and
if any repayment otherwise required at any time by Sections 2.10(c) or 2.10(d)
would result in the mandatory repayment of an amount on account of any Loan on
or prior to the fifth anniversary of the date such Loan was advanced hereunder
of an aggregate amount of such Loan exceeding 25% of the principal amount
thereof advanced hereunder after taking into account all mandatory (but not
voluntary) repayments on account of such Loan made prior to such time, then
notwithstanding Section 2.10(e) the Agent shall refund to the Borrower from such
repayment an amount equal to such excess which
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would otherwise have been applied in repayment of such Loan, such excess shall
be deemed not to have been a repayment by the Borrower, and an amount equal to
such excess shall be repaid on account of such Loan on the day after the fifth
anniversary of the advance of such Loan hereunder.
(g) In the event and on each occasion that any Credit Party (other than
the Borrower) optionally repays, or offers optionally to repay, any Debt for
borrowed money of a Credit Party (other than the Borrower) then such repayment
shall constitute an event of failure under this Agreement and the Borrower
shall, within three Business Days after the date of such repayment, offer to
prepay Loans in an aggregate amount equal to the product of (x) the sum of the
aggregate principal amount of the Loans outstanding at the time, multiplied by
(y) a fraction, the numerator of which is the aggregate principal amount of such
repayment, and the denominator of which is the aggregate principal amount of
Debt of the Credit Parties (other than the Borrower) outstanding as of such
date, determined on a consolidated basis in accordance with GAAP, immediately
prior to such repayment (excluding Debt in respect of the Loans); provided that
an offer of prepayment of Loans shall not be required pursuant to this paragraph
in respect of (i) repayments of Loans, (ii) any repayment of Debt to the extent
such repayment is refinanced by incurring other Debt that (A) has a scheduled
maturity date that is on or after the scheduled maturity date of the Debt being
refinanced, (B) has a weighted average life to maturity that is equal to or
longer than the remaining weighted average life to maturity of the Debt being
refinanced, determined immediately prior to giving effect to such repayment, (C)
does not include any provisions that may require mandatory repayment thereof
prior to scheduled maturity, other than scheduled repayments taken into
consideration in determining compliance with clause (B) above and other
provisions included in the Debt being refinanced, (D) is subordinated in right
of payment at least to the same extent as the Debt being refinanced, if
applicable, and (E) is not secured or guaranteed, other than by Liens on assets
securing or by guarantors of the Debt being refinanced and (iii) any repayment
of Debt at the scheduled final maturity thereof or in accordance with regularly
scheduled amortization requirements prior to maturity.
(h) the Borrower shall notify the Agent by telephone (confirmed by
telecopy) of any prepayment or offer of prepayment hereunder not later than 2:00
p.m., Toronto time, three Business Days before the date of prepayment. Each such
notice shall be irrevocable and shall specify the prepayment (which, in the case
of an offer of prepayment, shall be not less than five nor more than ten
Business Days following such notices), the principal amount of each Loan or
portion thereof to be prepaid or to which such offer of prepayment applies and,
in the case of a prepayment or an offer of prepayment pursuant to Sections
2.10(b), 2.10(c) or 2.10(d) a reasonably detailed calculation of the amount of
such prepayment or offer of prepayment. Promptly following receipt of any such
notice, the Agent shall advise the Lenders of the contents thereof. Each Lender
holding a Loan subject to an offer of prepayment pursuant to Sections 2.10(b) or
2.10 (g) shall, by notice to the Borrower and the Agent given not later than
2:00 p.m., Toronto time, one Business Day prior to the applicable prepayment
date, accept or reject such offer; provided that any Lender who fails to accept
or reject such offer in accordance with the foregoing shall be deemed to have
rejected such offer. Prepayments of Borrowings shall be accompanied by the
payment of accrued interest on the amount prepaid.
SECTION 2.11 FEES
The Borrower shall deliver to the Agent before any Loan is made hereunder
an agreement satisfactory to the Agent specifying fees payable by the Borrower
to the Agent and Lenders in respect of this Agreement including all Commitment
Fees.
SECTION 2.12 INTEREST
(a) The Borrower shall pay to the Agent interest accruing on: (i) each
Prime Rate Loan (and interest on overdue interest) at the Prime Rate plus the
applicable margin set forth in Section 2.12(b) below; (ii) each BA Rate Loan
(and interest on overdue interest) at the rate which is equivalent to the BA
Reference Rate for the Interest Period in effect for such Loan plus the
applicable margin as set forth in Section 2.12(b) below.
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(b) The applicable margins for Prime Rate Loans and BA Rate Loans are a
percentage per annum based on the Total Debt Leverage Ratio as follows:
TOTAL DEBT APPLICABLE MARGIN APPLICABLE MARGIN
LEVERAGE RATIO FOR PRIME RATE LOAN FOR BA RATE LOAN
-------------- ------------------- -----------------
> 12x 3.25% 4.25%
= or < 12x but > 10x 3.00% 4.00%
= or < 10x but > 8x 2.75% 3.75%
= or <8x but >6x 2.50% 3.50%
= or <6x 2.00% 3.00%
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder or with
respect to this Agreement is not paid when due, whether at stated maturity, upon
acceleration or otherwise, all Indebtedness (including all such overdue amounts)
shall, to the extent permitted by law, bear interest, after as well as before
judgment, at a rate per annum equal to the rate otherwise payable hereunder plus
2.00% per annum (subject to Subsection (d)(i)) payable quarter-annually not in
advance on each Interest Payment Date.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and at the maturity thereof; provided that
(i) interest accrued pursuant to paragraph (c) of this Section shall be payable
on demand, (ii) in the event of any repayment or prepayment of any Loan, accrued
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, and (iii) in the event of any conversion of any
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion.
(e) All interest and fees hereunder shall, unless otherwise provided, be
computed at an annual rate of interest expressed on the basis of a year of 365
days (or in a leap year, 366 days), and Commitment Fees and other fees and shall
be calculated and payable based on the actual number of days elapsed (including
the first day but excluding the last day). The applicable Prime Rate or BA
Reference Rate shall be determined by the Agent, and such determination shall be
conclusive absent manifest error.
(f) (i) The principle of deemed reinvestment of interest shall not apply
to any interest calculation hereunder; and (ii) the rates of interest stipulated
herein are intended to be nominal rates and not effective rates or yields.
(g) Interest shall accrue on each outstanding BA Rate Loan during each
Interest Period from the first day of such Interest Period to the last day
thereof.
SECTION 2.13 ALTERNATE RATE OF INTEREST
If prior to the commencement of any Interest Period for a BA Rate Loan:
(a) the Agent determines (which determination shall be conclusive absent
manifest error) that adequate and reasonable means do not exist for ascertaining
the BA Reference Rate for such Interest Period; or
(b) the Agent is advised by the Required Lenders that the BA Reference
Rate for such Interest Period will not adequately and fairly reflect the cost to
such Lenders of making or maintaining their Loans included in such Loan for such
Interest Period;
then the Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and such Loan shall
be made as a Prime Rate Loan.
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SECTION 2.14 INCREASED COSTS
(a) If any Change in Law shall:
(i) subject any Lender to any tax of any kind whatsoever with respect
to this Agreement or any Loans made by such Lender, or change the basis of
taxation of payments to such Lender of principal, interest, fees or any
other amount payable hereunder (except for changes in the rate of tax on
the overall net income of such Lender imposed by its jurisdiction of
incorporation or any political subdivision thereof);
(ii) impose, modify or deem applicable any reserve, special deposit
or similar requirement against assets of, deposits with or for the account
of, or credit extended by, any Lender (except any such reserve requirement
reflected in BA Rate); or
(iii) impose on any Lender any other condition affecting this
Agreement or BA Rate Loans made by such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any BA Rate Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will promptly pay to such Lender, on demand by the
Agent, such additional amount or amounts as will compensate such Lender, after
taking into account all applicable Taxes and Excluded Taxes, for such additional
costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days after
receipt thereof.
(d) Failure or delay on the part of any Lender or the Agent to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than 180 days prior to the date that such
Lender notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; PROVIDED FURTHER that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the 180-day period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.15 FAILURE BY BORROWER TO COMPLY WITH BORROWER'S NOTICE
(a) In the event the Borrower fails to borrow or prepay any Loan on the
date specified in any notice delivered by the Borrower pursuant to this
Agreement, the Borrower shall compensate each Lender for the actual loss, cost
and expense (as determined by such Lender) attributable to such event.
(b) A certificate of any Lender setting forth any amount or amounts that
such Lender is entitled to receive pursuant to paragraph (a) of this Section
shall be delivered to the Borrower and shall be
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conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 30 days after receipt thereof.
SECTION 2.16 TAXES
(a) Any and all payments by or on account of any obligation of any Credit
Party hereunder or under any other Credit Document shall be made free and clear
of and without deduction for any Indemnified Taxes; provided that if the
Borrower or any other Credit Party shall be required to deduct any Indemnified
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Agent or the
Lender receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower or such other Credit Party shall make
such deductions and (iii) the Borrower or such other Credit Party shall pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Credit Parties shall pay any Other Taxes not required
to be deducted or withheld as set forth in paragraph (a) above to the relevant
Governmental Authority in accordance with applicable law.
(c) Each Credit Party shall indemnify the Agent, the Collateral Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes paid by such agent or any Lender on or with respect to
any payment by or on account of any obligation of a Credit Party hereunder or
under any other Credit Document (including Indemnified Taxes imposed or asserted
on or attributable to amounts payable under this Section) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to a Credit Party by a Lender, or by the
Agent or the Collateral Agent on its own behalf or on behalf of a Lender, shall
be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes by a
Credit Party to a Governmental Authority, such Credit Party shall deliver to the
Agent the original or a certified copy of a receipt issued by such Governmental
Authority evidencing such payment, a copy of the return reporting such payment
or other evidence of such payment reasonably satisfactory to the Agent.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which a Credit Party is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to such Credit Party (with a copy to
the Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by such Credit Party as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Borrower shall be obliged to make any payment to any Lender
pursuant to Section 2.16(a) and such Lender shall receive any tax benefit which
it would not have received if there had been no such payment, such Lender agrees
to pay to the Borrower the amount of such tax benefit after the same has been
obtained; provided, however, that this shall place such Lender in no worse
position than it would have been if the Borrower had not been required to make
such payment. Each Lender shall have complete discretion as to whether or not it
will seek any tax benefit and as to the allocation of its income, and no Lender
shall be obliged to disclose any information to the Borrower regarding its
income or taxes.
SECTION 2.17 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SETOFFS
(a) The Borrower shall make each payment required to be made by it
hereunder or under any other Credit Document (whether of principal, interest or
fees, or of amounts payable under Section 2.14, 2.15 or 2.16 or otherwise) prior
to 2:00 p.m., Toronto time, on the date when due, in immediately available
funds, without deduction, setoff or counterclaim. Any amounts received after
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such time on any date may, in the discretion of the Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Agent to an account or
accounts designated by the Agent in writing or in a manner otherwise designated
by the Agent in writing, except that payments pursuant to Section 2.11, 2.14,
2.15, 2.16, and 9.03 shall, unless otherwise directed by the Agent in writing,
be made directly to the persons entitled thereto and payments pursuant to other
Credit Documents shall, unless otherwise directed by the Agent in writing, be
made to the persons specified therein. The Agent shall distribute any such
payments received by it for the account of any other person to the appropriate
recipient promptly following receipt thereof. If any payment under any Credit
Document shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments under each Credit Document shall be made in Cdn.
Dollars.
(b) If at any time insufficient funds are received by and available to the
Agent to pay fully all amounts of principal, interest and fees then due
hereunder, such funds shall be applied (i) first, towards payment of interest
and fees then due hereunder, ratably among the parties entitled thereto in
accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to
such parties.
(c) If any Lender shall, by exercising any right of setoff or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Loans resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lenders receiving such greater
proportion shall purchase (for cash at face value) participations in the Loans
of other Lenders to the extent necessary so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate
amount of principal of and accrued interest on their respective Loans; PROVIDED
that (i) if any such participations are purchased and all or any portion of the
payment giving rise thereto is recovered, such participations shall be rescinded
and the purchase price restored to the extent of such recovery, without
interest, and (ii) the provisions of this paragraph shall not be construed to
apply to any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Borrower or any of its
subsidiaries or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under Applicable Law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.
(d) Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Agent for the account of the Lenders
hereunder that the Borrower will not make such payment, the Agent may assume
that the Borrower has made such payment on such date in accordance herewith and
may, in reliance upon such assumption, distribute to the Lenders the amount due.
In such event, if the Borrower has not in fact made such payment, then each of
the Lenders severally agrees to repay to the Agent forthwith on demand by the
Agent, the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Agent, at a rate determined by the Agent in
accordance with banking industry rules on interbank compensation.
(e) Without limiting the generality of paragraph (a) above, the Borrower's
obligations to make each payment required to be made by it hereunder or under
any other Credit Document (whether of principal, interest, fees or otherwise)
shall be absolute and unconditional and shall not be subject to any delay,
reduction, setoff, defense or recoupment for any reason, including any failure
of the Network or any part thereof, or any dispute with, breach of
representation or warranty by or claim
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against any supplier, manufacturer, installer, vendor or distributor, including
Cisco Systems. The provisions of this paragraph shall not be construed to
constitute a waiver by the Borrower of any rights that the Borrower may have
under any Supply Agreement or (except for rights that the Borrower may have been
able to assert hereunder if not for the preceding sentence) any other rights at
law or in equity with respect to any item purchased from Cisco Systems by the
Borrower.
SECTION 2.18 MITIGATION OBLIGATIONS; REPLACEMENT OF THE LENDERS
(a) If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment; provided that if such costs
and expenses would exceed the increased costs or additional amounts to be
eliminated or avoided by such designation or assignment, then such Lender shall
not be required to make such designation or assignment and the Borrower shall
not be required to pay such costs and expenses.
(b) If any Lender requests compensation under Section 2.14, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (i) the Borrower
shall have received the prior written consent of the Agent, which consent shall
not unreasonably be withheld and (ii) such Lender shall have received payment of
an amount equal to the outstanding principal of its Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts). A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
(c) Despite any other provision of this Agreement, Subsections 2.18(a) and
2.18(b) shall not apply to Cisco if, in Cisco's discretion, they would have a
prejudicial effect on Cisco, and shall not, in any event, require Cisco to open
any new office or branch or to effect any assignment to Cisco Systems, Inc.,
Cisco Systems Canada Co., any Affiliate of Cisco Systems, Inc. or any Subsidiary
of Cisco.
ARTICLE III
Representations and Warranties
SECTION 3.01 REPRESENTATIONS AND WARRANTIES
To induce the Lenders to establish and maintain the Commitments and to make
Loans available to the Borrower, each of the Guarantors and the Borrower
represents and warrants to the Agent and to each Lender that:
(a) CORPORATE STATUS AND POWER. Each of the Credit Parties is a
corporation duly incorporated, organized and validly existing under the laws of
its jurisdiction of incorporation, and has full corporate power and authority to
own its property, to carry on the business carried on by it, to
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enter into and perform its obligations under the Credit Documents to which it is
or will be a party, and in the case of the Borrower, to obtain Loans hereunder.
(b) QUALIFICATION AND COMPLIANCE WITH LAW. Each of the Credit Parties is
duly qualified in all jurisdictions where the nature of the property owned by it
or the business carried on by it makes such qualification necessary, and has
full legal right under the laws of all such jurisdictions to own its property
and to carry on the business carried on by it and each of the Credit Parties is
in compliance with all Applicable Law except to the extent that the failure to
comply therewith would not, in the aggregate, have, or reasonably be expected to
have, a Material Adverse Effect.
(c) AUTHORIZATION; CONSENTS; ENFORCEABLE OBLIGATIONS. Each of the Credit
Parties has taken all corporate action necessary to be taken by it to authorize
the execution and delivery of and the performance of its obligations under the
Credit Documents to which it is or will be a party, and in the case of the
Borrower the obtaining of Loans hereunder. Except as has been obtained and is in
full force and effect, no consent, waiver or authorization of, or filing with or
notice to, any person (including any creditors or shareholders of any of the
Credit Parties) is required to be obtained in connection with the execution and
delivery of and the performance by any of the Credit Parties of its obligations
under the Credit Documents to which it is or will be a party, or in the case of
the Borrower the obtaining of Loans hereunder. Each of the Credit Documents has
been duly executed and delivered by each of the Credit Parties that is a party
thereto, and constitutes a legal, valid and binding obligation of each such
Credit Party enforceable against such Credit Party in accordance with its terms
subject to (i) applicable bankruptcy, insolvency, moratorium and other similar
laws affecting the rights of creditors generally, (ii) the fact that equitable
remedies such as injunctions and specific performance may only be granted in the
discretion of the courts before which they are sought and (iii) the fact that
the holding and disposition of shares of the Borrower by the Lenders or their
agents, including the Collateral Agent, pursuant to the Security, may be subject
to restrictions under the Telecommunications Act (Canada) and/or the
Radiocommunication Act of Canada and the regulations pursuant thereto.
(d) NO CONFLICTS. Subject to clause 3.01(c)(iii) above, the execution and
delivery by each of the Credit Parties of the Credit Documents to which it is or
will be a party and the performance of its obligations thereunder, and in the
case of the Borrower the obtaining of Loans hereunder, will not conflict with or
result in a breach of any Applicable Law, and will not conflict with, or result
in a breach of, or constitute a default under, or permit the termination of, or
cause any material right of any of the Credit Parties to be adversely affected
under, any of the provisions of the articles of incorporation, other constating
documents or by-laws of such Credit Party or any agreement, License, instrument,
judgement, injunction or other Contractual Obligation to which such Credit Party
is a party or by which it is bound, or result in the creation or imposition of
any Lien (other than the Security) upon any property of any Credit Party. None
of the Credit Parties is in default in the performance or observance of any
provision of any agreement or instrument evidencing any Debt of any Credit Party
or pursuant to which any such Debt has been created, which default entitles the
holder or holders of such Debt (or a trustee therefor), with or without the
giving of notice of such default or the lapse of time, to declare or otherwise
cause any such Debt to be due and payable except to the extent that such
acceleration would not, in the aggregate, have or reasonably be expected to
have, a Material Adverse Effect.
(e) BURDENSOME PROVISIONS. None of the Credit Parties is a party or
subject to any agreement, instrument or restriction which has had, or which may
reasonably be expected to have, a Material Adverse Effect. There is no provision
in any agreement or instrument to which any of the Credit Parties is a party or
is subject which has had, or which may reasonably be expected to have, a
Material Adverse Effect.
(f) LITIGATION, ETC. Except as disclosed in writing by the Borrower to
the Agent prior to the initial Borrowing Date with specific reference to this
paragraph (f), or with respect to events occurring subsequent to the date of
this Agreement, as the Borrower has otherwise disclosed in writing from
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time to time to the Agent with specific reference to this paragraph (f), there
is no action, suit or proceeding (whether or not purportedly on behalf of any of
the Credit Parties) pending or, to the knowledge of the Borrower, threatened,
against or affecting any of the Credit Parties before any court or before or by
any governmental department, commission or agency, in Canada or elsewhere, or
before any arbitrator or board, and none of the Credit Parties is in default
with respect to any order or award of any arbitrator or government department,
commission or agency, except to the extent that such actions, suits, proceedings
or default would not, if adversely determined, in the aggregate have, or
reasonably be expected to have, a Material Adverse Effect.
(g) FINANCIAL STATEMENTS. The Parent Guarantor has delivered to the Agent
a true and complete copy of its most recent financial statements as at September
30, 1999 for the financial year then ended, and such financial statements
present fairly the consolidated financial position of the Parent Guarantor, in
accordance with GAAP, as of the date thereof and for the financial period then
ended. All financial statements of the Parent Guarantor delivered to the Agent
after the date of this Agreement pursuant to Section 5.01(a)(i) will present
fairly the consolidated financial position of the Parent Guarantor in accordance
with GAAP as of the dates thereof and for the financial periods then ended.
(h) CHANGES. Since the date of the most recent audited consolidated
financial statements of the Parent Guarantor delivered to the Agent, there has
occurred no event which (individually or with any other events) has had, or
which may reasonably be expected to have, a Material Adverse Effect.
(i) TAX STATUS. Except as the Borrower has previously disclosed in
writing to the Agent with specific reference to this paragraph (i), each of the
Credit Parties has filed all tax returns which are required to be filed by it,
and has paid when required by Applicable Law all Taxes (if any) which have
become due as shown on such returns or on any assessment received by it and
there is no material outstanding matter of dispute or difference between any of
the Credit Parties and any federal, provincial, state, territorial or municipal
taxing authority, agency or department that is not being contested by such
Credit Party. Each of the Borrower and the Parent Guarantor is a corporation
resident in Canada within the meaning of the Income Tax Act (Canada).
(j) CORPORATE STRUCTURE. Each of the Borrower and GT(US) is a
Wholly-Owned Subsidiary of the Parent Guarantor, and together are the only
Subsidiaries of the Parent Guarantor. Neither the Borrower nor GT(US) has any
Subsidiaries.
(k) DEFAULT. No Default or Event of Default is continuing.
(l) TITLE TO PROPERTY. Each of the Credit Parties is the legal and
beneficial owner of its property with good and marketable title to its property,
subject only to Permitted Liens, with the leases and licenses for any leased or
licensed property to which such Credit Party is a lessee or licensee being in
good standing and in full force and effect.
(m) USE OF REAL PROPERTY. All real property owned or leased by a Credit
Party is identified in Schedule 3.01(m). All such real property may be used by
the Credit Parties pursuant to Applicable Law for the present use and operation
of the material elements of the business conducted, or intended to be conducted,
on such real property except where any such noncompliance with any Applicable
Law would not individually or in the aggregate have, or be reasonably likely to
have, a Material Adverse Effect.
(n) LICENSES. Each of the Credit Parties holds in good standing all
Licenses which it requires, or which are required by Applicable Law for it, to
hold, own, lease, license or use the property included in the business carried
on by it and to carry on such business, except for such Licenses the absence of
which has not had, and which would not reasonably be expected to have, a
Material Adverse Effect.
(o) FINANCIAL YEAR END. The financial year end of each of the Credit
Parties is September 30th.
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(p) PENSION PLANS. All pension plans (if any) established by either of
the Guarantors or the Borrower or any of their respective Subsidiaries for any
of their employees are duly registered where required by, and in good standing
under, Applicable Law, and all required contributions under such plans have been
made and the respective pension funds are funded in accordance with the rules of
the applicable pension plans and Applicable Law and no past service or
experience deficiency funding liabilities exists thereunder.
(q) ENVIRONMENTAL MATTERS. Except as the Borrower has previously
disclosed in writing to the Agent with specific reference to this paragraph (q),
to the best knowledge of the Borrower and each Guarantor, (i) the business
carried on and the property owned or used at any time by any of the Credit
Parties and their respective predecessors (including the lands owned or occupied
by any of them and the waters on or under such lands) have at all times been
carried on, owned or used in compliance with all Environmental Laws; (ii) none
of the Credit Parties is subject to any proceedings alleging the violation of
any Environmental Law, and no part of its business or property is the subject of
any proceeding to evaluate whether remedial action is needed as a result of the
Release from or presence of any Hazardous Substance on any lands owned or
occupied by it; (iii) there are no circumstances that could reasonably be
expected to give rise to any civil or criminal proceedings or liability
regarding the Release from or presence of any Hazardous Substance on any lands
used in or related to the business or property of any of the Credit Parties or
on any lands on which any of the Credit Parties has disposed or arranged for the
disposal of any materials arising from the business carried on by it, or
regarding the violation of any Environmental Law by any of the Credit Parties or
by any other person for which it is responsible; (iv) all Hazardous Substances
disposed of, treated or stored on lands owned or occupied by any of the Credit
Parties have been disposed of, treated and stored in compliance with all
Environmental Laws; (v) there are no proceedings and there are no circumstances
or material facts which could give rise to any proceeding in which it is or
could be alleged that any of the Credit Parties are responsible for any domestic
or foreign clean up or remediation of lands contaminated by Hazardous Substances
or for any other remedial or corrective action under any Environmental Laws;
(vi) each of the Credit Parties has maintained all environmental and operating
documents and records relating to its business and property in the manner and
for the time periods required by any Environmental Laws and has never had
conducted an environmental audit of its business or property; and (vii) the
Borrower is not aware of any pending or proposed changes to any Environmental
Laws which would render illegal or materially adversely affect its business or
property.
(r) SECURITIES PLEDGES AND OTHER SECURITY. Security certificates with
blank powers of attorney representing all of the issued and outstanding shares
in the authorized capital of each of the Credit Parties (other than the Parent
Guarantor), and security certificates with blank powers of attorney representing
all of the issued and outstanding shares in the authorized capital of each of
the Subsidiaries of the Credit Parties, have been delivered and pledged to the
Collateral Agent pursuant to the Security and the Liens created under the
Security constitute a first priority perfected Lien (subject only to Permitted
Liens) in all of the property of the Credit Parties. Cisco is or will be a
Security Beneficiary and is or will be entitled to the benefits of all Security
in accordance with the provisions of the Collateral Agency and Intercreditor
Agreement and payment of all Indebtedness is or will be secured by the Security.
(s) YEAR 2000 COMPLIANCE. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of any Credit Party's computer
systems and equipment containing embedded microchips (including systems and
equipment supplied by others or with which any Credit Party's systems interface)
has been completed except to the extent that the failure to do so would not, or
would not reasonably be expected to, have a Material Adverse Effect.
(t) MATERIAL CONTRACTS. All Material Contracts are in full force and
effect, and no party thereto is in breach of its respective obligations
thereunder except to the extent that all such breaches in the aggregate do not,
and could not be reasonably expected to, result in a Material Adverse Effect.
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(u) INTELLECTUAL PROPERTY. Each of the Credit Parties owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by such
Credit Party does not infringe upon the rights of any other person, except for
any such infringements that, in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect.
(v) INSURANCE. Each Credit Party has provided the Agent with a copy of
each insurance policy maintained by or on behalf of such Credit Party and its
Subsidiaries as of the date of this Agreement. All premiums in respect of such
insurance have been paid or are not yet due.
(w) LABOR MATTERS. No Credit Party is a party to a collective bargaining
or any other agreement with a union. There are no strikes, lockouts or slowdowns
against any Credit Party pending or, to the knowledge of any Credit Party,
threatened. The hours worked by and payments made to employees of the Credit
Parties have not been in violation of any applicable federal, provincial, state,
local or foreign law dealing with such matters. All payments due from any Credit
Party, or for which any claim may be made against any Credit Party, on account
of wages and employee health and welfare insurance, workers' compensation and
other benefits, have been paid or accrued as a liability on the books of the
applicable Credit Party.
(x) DISCLOSURE. Each Credit Party has disclosed to the Agent all
agreements, instruments and corporate or other restrictions to which any of the
Credit Parties is subject, and all other matters known to any of them, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No representation or warranty made by any Credit Party
in any Credit Document or in any Supply Agreement or in any other document
furnished to the Agent or any Lender from time to time in connection herewith or
therewith contains or will contain any untrue statement of a material fact or
omits or will omit to state any material fact necessary to make the statements
herein or therein, in light of the circumstances under which they are made, not
misleading. All projections and pro forma information delivered hereunder to the
Agent or any Lender from time to time by any of the Credit Parties were prepared
in good faith based on assumptions believed by the Borrower to be reasonable at
the time of delivery. There is no fact known to the Borrower or any Guarantor on
the date of this Agreement which has had, or which has a reasonable possibility
of having, a Material Adverse Effect.
SECTION 3.02 SURVIVAL AND DEEMED REPRESENTATIONS AND WARRANTIES
All representations and warranties contained in this Agreement and the
other Credit Documents shall survive the execution and delivery of this
Agreement and the other Credit Documents and the obtaining of Loans from time to
time. The Borrower and each of the Guarantors shall be deemed to make each of
the representations and warranties contained in Section 3.01 (except Subsection
3.01(j)) or in each of the other Credit Documents as at the time of the delivery
of each Loan Request and as at the time each Loan is made unless, before such
representation and warranty is deemed to be made, the Borrower delivers to the
Agent a written notice that such representation or warranty cannot be made and
disclosing the reasons therefor, and the Agent consents thereto.
ARTICLE IV
Conditions
SECTION 4.01 CONDITIONS PRECEDENT TO FIRST LOAN
No Lender shall be obligated to make the First Loan unless each of the
following conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Agent shall have received the relevant Loan Request.
(b) The Agent (or its counsel) shall have received from each party hereto
a counterpart of the Credit Documents signed on behalf of the parties thereto.
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(c) The following documents in form, substance and execution acceptable to
the Lenders shall have been delivered to the Agent:
(i) A certificate by a Senior Officer of each of the Credit Parties
containing inter alia:
(A)a certified copy of the constating documents and by-laws of each
Credit Party, and of all corporate proceedings (including a
directors' resolution) taken and required to be taken by each
Credit Party to authorize the execution and delivery of the
Credit Documents to which it is a party and the performance by
it of the transactions contemplated in such Credit Documents;
(B)a certificate of incumbency for each Credit Party setting forth
specimen signatures of the persons authorized to execute the
Credit Documents to which it is a party;
(C)a certificate of status or certificate of good standing, as the
case may be, for each Credit Party;
(ii) the opinion of counsel (including Ontario counsel and local
counsel) for each of the Credit Parties, such opinion to be in form, scope
and substance satisfactory to the Agent and to address, among other things,
withholding tax issues, enforceability of all Credit Documents, and the
enforceability, perfection, priority and registration of the Security as
security for payment of all Indebtedness (or, to the extent satisfactory to
the Agent, reliance letters in favour of the Agent with respect to opinions
previously rendered with respect to documents executed prior to the date
hereof);
(iii) such other documents relative to the Credit Documents and the
transactions contemplated in the Credit Documents as the Agent and the
Lenders may reasonably require; and
(iv) copies of all documents (other than fee letters and supply
agreements) required by the Agent to which any Security Beneficiary is a
party;
(d) The Lender shall have become a party to the Collateral Agency and
Intercreditor Agreement and a beneficiary of the Security.
(e) The Parent Guarantor and each of the other Credit Parties shall have
obtained all consents and waivers as shall be necessary to permit the
consummation of the Transactions, to the extent that consummation thereof would
otherwise be restricted or prohibited under the terms of any material indenture
or other agreement to which the Parent Guarantor or any of the other Credit
Parties is a party or by which it is bound, in each case without the imposition
of any burdensome conditions.
(f) Each Credit Party shall be in compliance with each of the covenants
set forth in Article V as of the initial Borrowing Date and would have been in
compliance with all such covenants had such covenants been in effect from the
date of this Agreement to and including the initial Borrowing Date, and the
Agent shall have received a certificate of a Senior Officer of each Credit Party
certifying such compliance.
(g) The Credit Parties shall be in compliance with each then existing
Supply Agreement, which shall be valid and in full force and effect.
(h) Except as identified on Schedule 4.01(h), there shall exist no action,
suit, investigation or proceeding pending or to the knowledge of any Credit
Party threatened in any court or before any arbitrator or government
instrumentality that might be expected to have in a Material Adverse Effect, or
that purports to affect the legality, validity or enforceability of any of the
Credit Documents or the Transactions contemplated thereby or the Lenders' rights
thereunder.
(i) There shall exist no Default or Event of Default on the applicable
Borrowing Date and the making of the applicable Loan would not result in the
occurrence of a Default or Event of Default, and
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the Borrower shall have delivered to the Agent, a certificate of a Senior
Officer of the Borrower to such effect.
(j) The representations and warranties contained in Article III shall be
true on and as of the applicable Borrowing Date with the same effect as if such
representations and warranties had been made on and as of the applicable
Borrowing Date, and the Borrower shall have delivered to the Agent a certificate
of a Senior Officer of the Borrower to such effect, provided that, if the
Borrower shall have delivered to the Agent a notice referred to in Section 3.02
that any such representation or warranty deemed to be made cannot be made, and
if the Agent shall have consented to the advance of such Loan despite the
inability of the applicable Credit Party to make such representation or
warranty, then such condition will be deemed waived in respect of such Loan.
(k) All accrued fees and expenses of the Agent, the Collateral Agent and
the Lenders payable by a Credit Party on or prior to the initial Borrowing Date
(excluding the fees and expenses of counsel to the Agent) shall have been paid.
(l) The Agent shall have received, in form and substance satisfactory to
the Agent the most recent business plan of the Borrower, including financial
projections.
(m) The Agent shall have received confirmation of all insurance maintained
by the Credit Parties, and such insurance shall comply with the requirements of
the Credit Documents.
(n) The Borrower shall have entered into the Material Contracts.
(o) There shall not have occurred any change in the financial condition of
the Borrower or any Guarantor since the time of their last financial statements
provided to the Agent which in the in the aggregate has had, or which has a
reasonable possibility of having, a Material Adverse Effect.
(p) The purchase by the Borrower being financed by such Loan is a bona
fide purchase by the Borrower, the purchase by the Borrower complies with all
Laws applicable to the Borrower.
(q) No request or requirement of the Minister of National Revenue or other
Governmental Authority for payment to the Receiver General for Canada pursuant
to Subsection 224(1.1) or any successor section of the Income Tax Act (Canada)
shall have been received by the Agent, a Lender, or any of their respective
agents in respect of the Borrower.
The Agent shall notify the Borrower and the Lenders of the initial
Borrowing Date. Notwithstanding the foregoing, the obligations of the Lenders to
make Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 9.02) at or prior to 2:00
p.m., Toronto time, on December 31, 2000 (and, in the event such conditions are
not so satisfied or waived by such date, the Commitments shall terminate at such
time).
The First Loan shall be advanced directly to the Agent for application
against amounts owing by the Borrower under the 1999 Credit Agreement.
SECTION 4.02 CONDITIONS FOR SUBSEQUENT LOANS
No Lender shall be obligated to make any Loan following the First Loan
unless each of the following conditions is satisfied (or waived in accordance
with Section 9.02):
(a) The Agent shall have received the relevant Loan Request.
(b) The Agent shall have received, at the time of receipt of the
applicable Loan Request, a certificate signed by a Senior Officer of the
Borrower confirming compliance with the conditions set forth in paragraph (d) of
this Section;
(c) There is no moratorium or other government action which restricts the
ability of the Borrower to make payments when due under the Facility;
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(d) The representations and warranties of each Credit Party set forth in
the Credit Documents shall be true and correct in all material respects on and
as of the date of such Loan, provided that if the Borrower shall have delivered
to the Agent a notice referred to in Section 3.02 that any such representation
or warranty deemed to be made cannot be made, and if the Agent shall have
consented to the advance of such Loan despite the inability of the applicable
Credit Party to make such representation or warranty, then such condition will
be deemed waived in respect of such Loan;
(e) At the time of and immediately after giving effect to such Loan no
Default or Event of Default shall have occurred and be continuing;
(f) The purchase by the Borrower being financed by such Loan is a bona
fide purchase by the Borrower, the purchase by the Borrower complies with all
Laws applicable to the Borrower.
(g) No request or requirement of the Minister of National Revenue or other
Governmental Authority for payment to the Receiver General for Canada pursuant
to Subsection 224(1.1) or any successor section of the Income Tax Act (Canada)
shall have been received by the Agent, a Lender, or any of their respective
agents in respect of the Borrower.
(h) All conditions specified in Section 4.01, to the extent not previously
satisfied for any reason, shall have been satisfied or waived by the Lenders.
ARTICLE V
Covenants
Until the Commitments have expired or been terminated and until all
Indebtedness has been paid in full, each of the Credit Parties which signs this
Agreement covenants and agrees with the Agent and the Lenders that:
SECTION 5.01 AFFIRMATIVE COVENANTS
It shall and, in the case of the covenants and agreements set forth in
paragraphs (c), (d), (e), (f), (g), (i) and (j), it shall cause each of its
Subsidiaries to:
(a) FINANCIAL STATEMENTS. Furnish to the Agent (with a copy for each of
the Lenders):
(i) as soon as available, but in any event within 105 days after the
end of each financial year of the Parent Guarantor, a copy of the audited
consolidated balance sheet of the Parent Guarantor as at the end of such
financial year and the related audited consolidated statements of income,
shareholders' equity, retained earnings and cash flow of the Parent
Guarantor for such financial year, setting forth in each case in
comparative form the figures for the previous financial year of the Parent
Guarantor and reported on by an independent auditor reasonably acceptable
to the Lenders and the Parent Guarantor shall ensure that the financial
statements are prepared in such a manner that the auditor's report does not
contain any qualification other than a qualification which is acceptable to
the Lenders acting reasonably; and
(ii) as soon as available, but in any event not later than 60 days
after the end of each financial quarter (including the last quarter) of
each financial year of the Parent Guarantor, a copy of the unaudited
consolidated balance sheet of the Parent Guarantor as at the end of such
quarter and the related unaudited consolidated statements of income,
shareholders' equity, retained earnings and cash flow of the Parent
Guarantor for such quarter and the portion of the financial year through
the end of such quarter, setting forth in each case in comparative form the
figures for the previous financial year of the Parent Guarantor,
accompanied by a certificate of the chief financial officer of the Parent
Guarantor stating that in his opinion such financial statements present
fairly the consolidated financial position of the Parent Guarantor at the
date of such statements and for the reporting period included in such
statements, subject to normal year-end audit adjustments.
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(b) CERTIFICATES; OTHER INFORMATION. Furnish to the Agent (with a copy for
each of the Lenders):
(i) concurrently with the delivery of the consolidated financial
statements referred to in Section 5.01(a)(i), a certificate of a Senior
Officer of the Parent Guarantor setting out the amount and calculation of
Excess Cash Flow for the applicable financial year;
(ii) concurrently with the delivery of the consolidated financial
statements referred to in Section 5.01(a)(i) and Section 5.01(a)(ii), a
compliance certificate of a Senior Officer of the Parent Guarantor in the
form attached hereto as Schedule 5.01(b) and Exhibit A thereto stating
that, to the best of such officer's knowledge and without personal
liability, the Credit Parties during such period have observed or performed
all of their respective covenants and other agreements contained in the
Credit Documents to be observed or performed by them, and that such officer
has no knowledge of any Default or Event of Default except as specified in
such certificate, such certificate to also include calculations to evidence
compliance by the Parent Guarantor with the financial covenants set forth
in Section 5.03, Section 5.04 and Section 5.05, as applicable and an
explanation of any change in GAAP or in the application thereof since the
date of the Parent Guarantor's most recent audited financial statements
delivered to the Agent and, if any such change has occurred, specifying the
effect of such change on the financial statements accompanying such
compliance certificate;
(iii) as soon as available, but in any event not later than 90 days
after the commencement of each financial year of the Parent Guarantor, a
copy of the consolidated corporate budget (both capital and operating) of
the Credit Parties for such financial year, prepared and shown on a
month-by-month basis for the period covered by such budget, and a statement
setting forth the principal assumptions upon which such budget is based,
which budget shall also contain a summary of all proposed capital
expenditures and dispositions by major category, and forecasted
consolidated balance sheets and statements of income for each of the Credit
Parties for each month for the period covered by such budget, and
forecasted consolidated statements of changes in financial position for
each of the Credit Parties for each month covered by such budget, all in
form satisfactory to the Lenders acting reasonably;
(iv) promptly upon acquisition thereof, particulars of each Subsidiary
acquired by any Guarantor or the Borrower;
(v) promptly, such additional financial and other information
relating to any of Credit Parties as the Agent may from time to time
reasonably (with respect to frequency as well as scope) request.
(c) PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy (i) at or
before maturity and before it becomes delinquent, all its Debt, and (ii) in
accordance with standard business practices, all other liabilities of whatever
nature, except in both cases when the amount or validity thereof is being
contested, and (A) adequate reserves with respect thereto are maintained by the
Credit Parties in accordance with GAAP, (B) such contest effectively suspends
collection of the contested Debt or liability and the enforcement of any Lien
securing such Debt or liability, and (C) the failure to make payment pending
such contest could not reasonably be expected to have a Material Adverse Effect.
(d) MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Preserve and keep
in full force and effect its corporate existence (subject to Section 5.02(c));
engage primarily in business of the same nature as now carried on by it; carry
on and conduct its business in a proper, efficient and businesslike manner, in
accordance with good business practice; take all reasonable action to obtain and
maintain in full force and effect all rights, privileges, franchises and
Licenses necessary or desirable in the conduct of its business, the absence of
which would, in the aggregate have, or be reasonably likely to have, a Material
Adverse Effect; and comply with all Contractual Obligations and Applicable Law
except to the extent that the failure to comply therewith would not, in the
aggregate, have, or be reasonably likely to have, a Material Adverse Effect.
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(e) MAINTENANCE OF PROPERTY. Keep all property useful and necessary in
its business in good working order and condition, normal wear and tear excepted
except to the extent that the failure to do so would not individually or in the
aggregate have, or be reasonably likely to have, a Material Adverse Effect.
(f) INSURANCE. Maintain with financially sound and reputable insurance
companies insurance on all of their property (including all risk property
insurance, comprehensive general liability insurance, and business interruption
insurance) in each case in such amounts and against such risks as are usually
insured against in the applicable jurisdictions by persons engaged in the same
or similar business to those of the Credit Parties, and as are acceptable to the
Lenders, acting reasonably, with mortgage and lender's loss payable endorsements
in favour of the Collateral Agent, and furnish to the Agent, upon written
request, full information as to, and certified copies of all policies
respecting, the insurance carried.
(g) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep proper
books and records of account in which full, true and correct entries in
accordance with GAAP and all Applicable Law shall be made of all its dealings
and transactions; and permit representatives of the Agent to visit and inspect
any of its property and to examine and make abstracts from any of its books and
records at any reasonable time, on reasonable notice and as often as may
reasonably be requested, and to discuss its business, property, condition
(financial or otherwise) with Senior Officers of any Guarantor or the Borrower
and their independent chartered accountants.
(h) OWNERSHIP OF BORROWER, RESIDENCY OF THE BORROWER AND PARENT
GUARANTOR. The Borrower shall at all times remain a Wholly-Owned Subsidiary of
the Parent Guarantor. The Parent Guarantor and the Borrower shall at all times
remain corporations resident in Canada within the meaning of the Income Tax Act
(Canada).
(i) GUARANTEES AND SECURITY BY FUTURE SUBSIDIARIES. Notify the Agent in
writing not later than 10 days after any person becomes a Subsidiary of a Credit
Party after the date of this Agreement (giving full information with respect to
such person's assets and liabilities and asking whether the Agent desires a
Guarantee and Security by such Subsidiary) and deliver, and cause such
Subsidiary to deliver, to the Agent, in form and substance satisfactory to the
Agent, not later than 14 days after receipt by the Borrower of a written request
by the Agent therefor, a Guarantee by such Subsidiary of payment of all
Indebtedness and the Security relative to such Subsidiary referred to in Article
VI together with the related corporate documentation and legal opinions referred
to in Section 4.01(c) or otherwise required by the Agent, acting reasonably. For
greater certainty, no failure or omission on the part of the Agent to request
any such Guarantee or Security at any time in respect of any Subsidiary shall
prejudice or otherwise affect the right of the Agent to request a Guarantee and
Security at any other time or in respect of any other Subsidiary.
(j) NOTICES. Promptly give notice to the Agent:
(i) of the occurrence of any Default or Event of Default;
(ii) of:
(A)any default or event of default under any Contractual
Obligation of any Credit Party; or
(B)the cancellation of any one or more Contractual Obligations
or of a Credit Party's interests in any such Contractual
Obligation; or
(C)any litigation, investigation or proceeding which may exist
or be threatened at any time between any Credit Party and any
Governmental Authority or in respect of any Credit Party by
or before any Governmental Authority;
which in any such case individually or in the aggregate has, or has a reasonable
likelihood of having, a Material Adverse Effect;
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(iii) of any other event, circumstance, act or omission which in
any such case individually or in the aggregate has, or is reasonably
likely to have, a Material Adverse Effect;
(iv) of any suit, litigation or other proceeding which is commenced
or threatened against any Credit Party which involves an uninsured claim
which the Borrower believes could reasonably exceed $1,000,000 (or the
Equivalent Amount in any other currency or currencies), or in which any
injunctive or similar relief is sought, and of all material developments
in respect thereof;
(v) of the occurrence of the acceleration, default or demand
pursuant to the terms of any Debt of any Credit Party which is in the
aggregate in excess of $5,000,000 (or the Equivalent Amount in any other
currency or currencies);
(vi) of any material default or event of default under (i) any
Permitted Lien which either secures an amount in excess of $5,000,000
(or the Equivalent Amount in any other currency or currencies) or could
have a material effect on the value of any of the property of the Credit
Parties or on the ability of any Credit Parties to conduct its business
in the ordinary course or (ii) any Debt secured by any such Permitted
Lien; and
(vii) should any licensor terminate, cancel, withdraw or fail to
grant or renew, or should any Credit Party allow to lapse, any License
and the same individually or in the aggregate has, or is reasonably
likely to have, a Material Adverse Effect.
Each notice pursuant to this Subsection shall be accompanied by an
officer's certificate of the Borrower setting forth details of the occurrence
referred to in such certificate and stating the potential effect of such
occurrence on the business, operations, property and financial condition of the
Credit Parties and what action the Credit Parties have taken and propose to take
with respect to such occurrence.
(k) USE OF PROCEEDS. Except for the proceeds of the First Loan, which
shall be disbursed in accordance with Subsection 4.01, the proceeds of Loans
will be used only for the purposes specified by Subsection 2.02(f).
(l) COUNSEL FEES. The Borrower shall pay to the Agent all fees and
expenses of U.S. counsel, Ontario counsel and local counsel to the Agent within
30 days after receipt of an invoice for such fees and expenses.
SECTION 5.02 NEGATIVE COVENANTS
It shall not, without the Agent's prior written consent, and shall cause
each of its Subsidiaries not to, without the Agent's prior written consent:
(a) DEBT. Create, incur, assume or suffer or permit to exist any Debt
except Permitted Debt.
(b) LIENS. Create, incur, assume or suffer or permit to exist any Lien
upon any of its property, whether now owned or held or hereafter acquired,
except for Permitted Liens.
(c) AMALGAMATIONS, ETC. Enter into any transaction of amalgamation or
consolidation or merger or liquidate, wind-up or dissolve itself (or suffer any
liquidation, winding-up or dissolution or any proceedings therefor) or continue
itself under the laws of any other statute or jurisdiction, except that, subject
to the Credit Parties taking such action, and executing and delivering to the
Agent and the Collateral Agent such undertakings, certificates, agreements and
other documents as the Agent or Collateral Agent may require, acting reasonably,
to affirm and assure the continued validity, enforceability, effectiveness and
priority of the Security and the covenants, agreements and obligations of the
Credit Parties under the Credit Documents, and provided that no Default or Event
of Default is then continuing or would be created thereby, and provided that the
same would not have, or have a reasonable likelihood of having, a Material
Adverse Effect, any Subsidiary of the Borrower or any Subsidiary of the Parent
Guarantor (other than the Borrower) may be amalgamated or consolidated or merged
or liquidated, wound-up or dissolved with or into the Borrower or the Parent
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Guarantor, provided that the Borrower or the Parent Guarantor, as the case may
be, shall be the continuing corporation, or with or into any one or more other
Subsidiaries.
(d) INVESTMENTS. Make any Investments in any one or more persons other
than Permitted Investments.
(e) ACQUISITIONS. Make any Acquisitions other than Permitted
Acquisitions.
(f) RESTRICTED PAYMENTS. Make any Restricted Payment, except that, so
long as no Default or Event of Default is continuing or would be created
thereby, (i) any Credit Party may pay dividends on any shares of its capital to
any other Credit Party; (ii) the Borrower or the Parent Guarantor may repay when
due (but not voluntarily prepay except as provided in (iii) or Subsection
5.02(o)) amounts on account of the principal portion of any Permitted Debt
(other than the High-Yield Debt except where such repayment is made by way of
Permitted Refinancing Debt), and (iii) the Borrower or the Parent Guarantor may
voluntarily prepay amounts on account of (A) the Burnaby Debt, (B) any Purchase
Money Obligation, and (C) Debt described in paragraph (ix) of the definition of
Permitted Debt.
(g) TRANSACTIONS WITH AFFILIATES. Except as specifically permitted
hereunder, enter into any transaction, including the purchase, sale or exchange
of any property or the rendering of any services, with any of its shareholders
or with any Affiliate, or with any of its or their directors or officers, or
enter into, assume or suffer to exist any employment, consulting or analogous
agreement or arrangement with any such shareholder or Affiliate or with any of
its directors or officers, except a transaction or agreement or arrangement
which is in the ordinary course of business of the Credit Party in question and
which is on fair and reasonable terms and not less favourable terms to such
Credit Party than it would obtain in a comparable arms-length transaction.
(h) AMENDMENTS. Amend any of its constating documents or by-laws or the
Bank Credit Agreement, the Lucent Credit Agreement, any other Credit Agreement
(as defined by the Collateral Agency and Intercreditor Agreement) or any
documents related to any of them in a manner that would be prejudicial to the
interests of any of the Lenders hereunder or in conflict with any of the Credit
Documents. For greater certainty, any increase in commitments or credit
available under either the Bank Credit Agreement or the Lucent Credit Agreement
shall be deemed not to be prejudicial to the interests of the Lenders provided
the aggregate commitment or credit available thereunder and all other
outstanding or committed Security Beneficiary Debt is less than or equal to
$1,350,000,000 (or any Equivalent Amount). Any increase in the amount of a
scheduled principal payment or payments of Security Beneficiary Debt or a change
in the due date therefor shall be deemed to be prejudicial to the interests of
the Lenders unless such increase occurs as a result of, and solely reflects an
increase in commitment of credit permitted hereunder and the extension of credit
pursuant to such increased commitment.
(i) CONSENSUAL LIMITATIONS. Create, incur, assume or suffer or permit to
exist any consensual limitation or restriction on its ability to make any
payments to the Agent or the Lenders, or provide security to the Collateral
Agent, or perform or observe any of its other covenants and agreements, as and
when required under the Credit Documents.
(j) MATERIAL CONTRACTS AND LICENSES. Permit any License or Material
Contract to be amended, modified or terminated, nor waive any right thereunder
to the extent such amendment, modification, termination or waiver would in the
aggregate have, or be reasonably likely to have, a Material Adverse Effect.
(k) DISPOSITIONS. Permit any direct or indirect sale, transfer or other
disposition or series or related sales, transfers or dispositions (including
pursuant to a sale and leaseback transaction) of any property or asset of any
Credit Party (other than dispositions of inventory or used, obsolete or surplus
equipment in the ordinary course of business, and dispositions by one Credit
Party to another Credit Party) except where (i) no Default or Event of Default
is continuing or would be created thereby, (ii) the Net Proceeds therefrom
represent the fair market value of the property or assets in
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question, (iii) following such sale, transfer or disposition, the aggregate Net
Proceeds from all such sales, transfers and dispositions made after February 3,
2000 do not exceed $100,000,000 (or the Equivalent Amount in any other
currency), (iv) such disposition is a sale to a purchaser not related to a
Credit Party, and (v) the Borrower makes the applicable prepayment or offer of
prepayment if required under Section 2.10(b).
(l) CHANGE IN BUSINESS. Engage in any business other than the Business.
(m) DEBT RATING. Issue high-yield unsecured debt or U.S. institutional
term debt, if it can reasonably be expected that such issuance would cause the
Parent Guarantor's credit rating, as determined by an established national
credit rating agency in the United States, to fall below the equivalent of the
Parent Guarantor's current Standard & Poors rating of B.
(n) NO CHANGE OF PARENT GUARANTOR'S FINANCIAL YEAR. Change the Parent
Guarantor's financial year from October 1 to September 30.
(o) PRO RATA PREPAYMENT OF SECURITY BENEFICIARY DEBT. Prepay, either
voluntarily or pursuant to a mandatory prepayment requirement, any Security
Beneficiary Debt unless such payments are made pro rata to pay each Security
Beneficiary (other than the holders of Security Beneficiary Debt pursuant to
Secured Hedging Arrangements) the amount to which it is entitled pursuant to the
applicable provisions of the Collateral Agency and Intercreditor Agreement.
SECTION 5.03 STAGE I FINANCIAL COVENANTS
Until the Stage II Date, the Parent Guarantor covenants and agrees that so
long as any Indebtedness is outstanding, or the Borrower is entitled to obtain
any Loan, the Parent Guarantor shall:
(a) SENIOR DEBT RATIO. Not permit the Senior Debt Ratio at any time from:
(i) February 3, 2000 to December 30, 2000 to be more than 0.35 to
1.0;
(ii) December 31, 2000 to December 30, 2001 to be more than 0.45 to
1.0; and
(iii)December 31, 2001 to September 30, 2002 or thereafter to be more
than 0.50 to 1.0; and
(b) TOTAL DEBT RATIO. Not permit the Total Debt Ratio at any time from:
(i) February 3, 2000 to December 30, 2001 to be more than 0.75 to 1.0;
and
(ii) December 31, 2001 to September 30, 2002 or thereafter to be more
than 0.75 to 1.0.
SECTION 5.04 STAGE II FINANCIAL COVENANTS
From and after the Stage II Date, the Parent Guarantor covenants and agrees
that so long as any Indebtedness is outstanding, or the Borrower is entitled to
obtain any Loan, the Parent Guarantor shall:
(a) SENIOR DEBT RATIO. Not permit the Senior Debt Ratio at any time to be
greater than 0.45 to 1.0;
(b) TOTAL DEBT RATIO. Not permit the Total Debt Ratio at any time to be
greater than 0.75 to 1.0;
(c) SENIOR DEBT LEVERAGE RATIO. Not permit the Senior Debt Leverage Ratio
at any time from:
(i) the Stage II Date to December 30, 2003 to exceed 8.00 to 1.00;
(ii) December 31, 2003 to December 30, 2004 to exceed 4.00 to 1.00;
(iii) December 31, 2004 to December 30, 2005 to exceed 3.00 to 1.00;
and
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(iv) December 31, 2005 and thereafter to exceed 3.00 to 1.00;
(d) TOTAL DEBT LEVERAGE RATIO. Not permit the Total Debt Leverage Ratio
at any time from:
(i) the Stage II Date to December 30, 2003 to exceed 12.00 to 1.00;
(ii) December 31, 2003 to December 30, 2004 to exceed 7.00 to 1.00;
(iii) December 31, 2004 to December 30, 2005 to exceed 5.00 to 1.00;
and
(iv) December 31, 2005 and thereafter to exceed 5.00 to 1.00;
(e) INTEREST COVERAGE RATIO. Cause the Interest Coverage Ratio at all
times from:
(i) the Stage II Date to December 30, 2003 to exceed 0.75 to 1.00;
(ii) December 31, 2003 to December 30, 2004 to exceed 1.25 to 1.00;
and
(iii) December 31, 2004 and thereafter to exceed 1.75 to 1.00; and
(f) FIXED CHARGE COVERAGE RATIO. Cause the Fixed Charge Coverage Ratio at
all times from:
(i) October 1, 2004 to December 30, 2005 to exceed 0.50 to 1.00; and
(ii) December 31, 2005 and thereafter to exceed 1.00 to 1.00.
SECTION 5.05 ONGOING FINANCIAL COVENANTS
The Parent Guarantor covenants and agrees that so long as any Indebtedness
is outstanding or the Borrower is entitled to obtain any Loan, the Parent
Guarantor shall:
(a) REVENUES. Not permit Revenues:
(i) for the four financial quarters ending December 31, 2000 to be
less than Cdn.$95,000,000;
(ii) for the four financial quarters ending March 31, 2001 to be less
than Cdn.$115,000,000;
(iii)for the four financial quarters ending June 30, 2001 to be less
than Cdn.$125,000,000;
(iv)for the four financial quarters ending September 30, 2001 to be
less than Cdn.$175,000,000;
(v) for the four financial quarters ending December 31, 2001 to be
less than Cdn.$215,000,000;
(vi)for the four financial quarters ending March 31, 2002 to be less
than Cdn.$275,000,000;
(vii)for the four financial quarters ending June 30, 2002 to be less
than Cdn.$330,000,000;
(viii)for the four financial quarters ending September 30, 2002 to be
less than Cdn.$400,000,000;
(ix)for the four financial quarters ending December 31, 2002 to be
less than Cdn.$450,000,000;
(x) for the four financial quarters ending March 31, 2003 to be less
than Cdn.$510,000,000;
(xi)for the four financial quarters ending June 30, 2003 to be less
than Cdn.$590,000,000;
(xii)for the four financial quarters ending September 30, 2003 to be
less than Cdn.$775,000,000;
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(xiii) for its financial year ending September 30, 2004 to be less
than Cdn.$1,050,000,000;
(xiv)for its financial year ending September 30, 2005 to be less than
Cdn.$1,300,000,000; and
(xv)for its financial year ending September 30, 2006 or thereafter to
be less than Cdn.$1,600,000,000; and
(b) CAPITAL EXPENDITURES. Not permit the Capital Expenditures during the
Parent Guarantor's financial year ending:
(i) September 30, 2000 to exceed $375,000,000;
(ii) September 30, 2001 to exceed Cdn.$690,000,000;
(iii) September 30, 2002 to exceed Cdn.$375,000,000;
(iv) September 30, 2003 to exceed Cdn.$250,000,000;
(v) September 30, 2004 to exceed Cdn.$220,000,000;
(vi) September 30, 2005 to exceed Cdn.$145,000,000; or
(vii) September 30, 2006 and thereafter to exceed $185,000,000,
provided that (A) to the extent that actual Capital Expenditures during any
financial year are less than the corresponding maximum threshold amount set out
above, an additional amount equal to the difference (the "UNUSED AMOUNT") may be
spent on Capital Expenditures during the first two quarters of the then next
following financial year (or, in the case of the Unused Amount from the
financial year ending September 30, 2000, may be spent on Capital Expenditures
during the entire next financial year) and, to the extent that actual Capital
Expenditures during such two quarter period are less than the Unused Amount, an
additional amount equal to 50% of the difference may be spent on Capital
Expenditures during the remainder of such financial year (excluding the
financial year ending September 30, 2001), and Capital Expenditures made during
such financial year shall not be counted as against the applicable maximum
threshold amount set out above until such additional amounts (if any) have been
exceeded (PROVIDED THAT any unused portions of such additional amounts may not
be carried forward pursuant to this proviso (A)), (B) to the extent that any
Acquisition is made in lieu of a Capital Expenditure set out in the Plan, the
maximum threshold amount set out above with respect to the financial year in
which such Acquisition was made shall be reduced by the amount of such
Acquisition, and (C) from February 3, 2000 to the Maturity Date, Capital
Expenditures in any financial year may exceed the applicable maximum threshold
amount set out above where (x) the Borrower has provided the Agent with a
certificate of a Senior Officer certifying that such excess Capital Expenditures
could not reasonably be expected to create a Default or Event of Default, and
(y) the aggregate amount of all such excess Capital Expenditures made from
February 3, 2000 to the Maturity Date does not exceed the Combined Cap less
$600,000,000; and
(c) EBITDA. Not permit EBITDA for its financial year ending:
(i) September 30, 2000 to be less than negative $95,000,000;
(ii) September 30, 2001 to be less than negative $135,000,000;
(iii) September 30, 2002 to be less than $4,500,000; and
(iv) September 30, 2003 or thereafter to be less than $215,000,000;
(d) ACCESS LINES. Cause the aggregate number of Access Lines installed
and in service on or by:
(i) September 30, 2000 to exceed 185,134;
(ii) September 30, 2001 to exceed 1,459,269;
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(iii) September 30, 2002 to exceed 2,987,480;
(iv) September 30, 2003 to exceed 5,403,202; and
(v) September 30, 2004 and thereafter to exceed 8,298,474.
ARTICLE VI
Security
SECTION 6.01 GUARANTEES AND SECURITY REQUIRED
(a) The Borrower and the Parent Guarantor shall ensure that the Lenders
are beneficiaries (to substantially the same extent as the current and future
lenders under the Bank Credit Agreement and the Lucent Credit Agreement) of the
following security (together with all other security granted by any Credit Party
in favour of the Collateral Agent for the benefit of any Security Beneficiaries
in their capacities as such, the "SECURITY") and shall cause payment of all
Indebtedness at all times to be secured by the following Security:
(i) the Collateral Agency and Intercreditor Agreement;
(ii) a general security agreement from the Borrower in favour of the
Collateral Agent constituting a first-priority Lien (subject only
to Permitted Liens) on all of the present and future property of
the Borrower;
(iii)a securities pledge agreement from the Borrower in favour of the
Collateral Agent constituting a first-priority Lien (subject only
to Permitted Liens) on all of the present and future shares in
the capital of its Subsidiaries (if any) acknowledged by such
Subsidiaries, together with such resolutions and consents as the
Agent may determine are legally required or advisable and the
security certificates duly issued by each of such Subsidiaries
evidencing such pledge of securities duly endorsed in blank for
transfer;
(iv)an assignment of all Material Contracts from the Borrower and each
Guarantor in favour of the Collateral Agent with such consents or
acknowledgements as the Lenders may require;
(v)an unlimited guarantee and postponement of claims from each of the
Parent Guarantor and GT (US) guaranteeing to the Agent the due
payment of all Indebtedness;
(vi)to the extent required by Subsection 5.01(i), an unlimited
guarantee and postponement of claim from each Subsidiary of a
Credit Party guaranteeing to the Agent the due payment of all
Indebtedness;
(vii)a general security agreement from each Guarantor in favour of the
Collateral Agent constituting a first-priority Lien (subject only
to Permitted Liens) on all of the present and future property of
such Guarantor;
(viii)a securities pledge agreement from each Guarantor in favour of
the Collateral Agent constituting a first-priority Lien (subject
only to Permitted Liens) on all of the present and future shares
in the capital of its Subsidiaries (including the Borrower),
acknowledged by such Subsidiaries, together with the security
certificates duly issued by each of such Subsidiaries evidencing
such pledge of securities duly endorsed in blank for transfer;
(ix)charge/mortgages of land in favour of the Collateral Agent
constituting a first-priority Lien (subject only to Permitted
Liens) over all real property owned by any Credit Parties from
time to time, in each case in such principal amount as the
Collateral Agent may reasonably require;
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(x) an assignment of insurance proceeds in favour of the Collateral
Agent with respect to all property insurance from time to time
held by the Credit Parties, with all such policies of insurance to
name the Collateral Agent as first mortgagee and loss payee as its
interests may appear and to contain a standard mortgage clause in
form and content satisfactory to the Agent, all as required
pursuant to Section 5.01(f); and
(xi)such hypothecs and other security documents as may be necessary
for the purpose of creating and preserving in the Province of
Quebec and in any other relevant jurisdiction the Liens
constituted by any of the foregoing.
(b) GT (US) hereby undertakes to deliver to the Agent, within 45 days
after the date hereof, in form and substance satisfactory to the Agent, an
unlimited guarantee and postponement of claim guaranteeing to the Agent the due
payment of all Indebtedness, a general security agreement in favour of the
Collateral Agent and all such additional documents and legal opinions as may
reasonably be required by the Agent with respect thereto.
SECTION 6.02 REGISTRATION AND COMPLIANCE WITH LAWS
The Guarantees and Security shall comply with all Applicable Law and the
Security (or financing statements with respect thereto) shall be registered or
filed from time to time in all places where, in the opinion of the Agent,
registration or filing is required or advisable to perfect or protect all Liens
created thereby.
SECTION 6.03 FURTHER DOCUMENTATION
The Borrower and each Guarantor shall from time to time at their expense
duly authorize, execute and deliver, and cause each of their respective
Subsidiaries to duly authorize, execute and deliver, to the Agent such further
instruments and documents and take such further action as the Agent may request
for the purpose of obtaining or preserving the full benefits granted or intended
to be granted to the Collateral Agent, the Agent and the Lenders by the
Guarantees and Security and of the rights and remedies therein granted,
including without limitation the filing of financing statements or other
documents under any Applicable Law with respect to the Liens created thereby.
Unless prohibited by Applicable Law, each Guarantor and the Borrower (on behalf
of themselves and their Subsidiaries) authorize the Agent or the Collateral
Agent to file any such financing statement or similar documents without the
signature of the Borrower, the applicable Guarantor or the applicable
Subsidiary, or to execute such financing statement as attorney for the Borrower,
the applicable Guarantor or the applicable Subsidiary in the event that the
Borrower, the applicable Guarantor or the applicable Subsidiary fails to do so
promptly upon request by the Agent. The Borrower and each Guarantor acknowledge
that the Security has been prepared on the basis of Applicable Law in effect on
the date hereof, and that changes to Applicable Law may require the execution
and delivery of different forms of documentation, and accordingly the Agent
shall have the right to require that the Security be amended, supplemented or
replaced (and the Borrower and each Guarantor shall duly authorize, execute and
deliver, and cause each of their respective Subsidiaries to duly authorize,
execute and deliver, to the Agent on request any such amendment, supplement or
replacement with respect to any of the Security to which the Borrower, such
Guarantor or such Subsidiary is a party), (i) to reflect any change in
Applicable Law, whether arising as a result of statutory amendments, court
decisions or otherwise, (ii) to facilitate the creation and registration of
appropriate forms of security or financing statements in all applicable
jurisdictions, or (iii) if the Borrower or any Guarantor or any of their
respective Subsidiaries amalgamates with any other person or enters into any
corporate reorganization, to confer upon the Agent or the Collateral Agent, as
applicable, Liens similar to the Liens created or intended to be created by the
Security.
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ARTICLE VII
Events of Default
Each of the following events or circumstances shall constitute an Event of
Default hereunder:
(a) if the Borrower fails to pay any principal amount with respect to
Loans when due and payable hereunder;
(b) if a Credit Party fails to pay any interest, fee or other amount
(except principal) when due and payable under any of the Credit Documents,
and such failure continues for 10 Business Days or more;
(c) if the Borrower defaults in the performance or observance of any
provision or covenant contained in Section 5.01(f), 5.01(i) or Section
5.02, 5.03, 5.04 or 5.05;
(d) except as provided in Subsections (a), (b) and (c) above, if any
of the Credit Parties defaults in the performance or observance of any term
or covenant contained in any Supply Agreement or in any of the Credit
Documents to which it is a party and such default continues for 30 days or
more after the earlier of the date on which it first has actual knowledge
of such default and the date on which written notice of such default is
given to it by the Agent or a Lender;
(e) if any representation or warranty contained in any Supply
Agreement or in any of the Credit Documents or in any certificate delivered
thereunder by or on behalf of any of the Credit Parties shall be untrue in
any material respect on the date as of which it was made or deemed to be
made;
(f) if there shall be outstanding any Debt or Debts (other than the
Loans) exceeding an aggregate of $5,000,000 (or the Equivalent Amount in
any other currency or currencies) which any of the Credit Parties shall
have failed to pay when due and payable, or if any amount or amounts
exceeding an aggregate of $5,000,000 (or the Equivalent Amount in any other
currency or currencies) owing by any of the Credit Parties shall have
become due and payable or may then be declared to be due and payable prior
to the stated maturity date thereof or prior to the regularly scheduled
date for payment thereof as a result of any default or event of default
(however described) or other failure by any one or more of the Credit
Parties to perform or observe any obligation;
(g) if any Credit Document shall, at any time after its respective
execution and delivery and for any reason, cease in any way to be in full
force and effect or if the Security or any part of the Security shall, at
any time after its execution and delivery and for any reason, cease to
constitute a Lien of the nature and priority specified in or contemplated
by this Agreement or if the validity or enforceability of any Credit
Document is disputed by any of the Credit Parties or their Subsidiaries;
(h) if any Credit Party institutes proceedings for its winding up,
liquidation or dissolution (except to the extent permitted under Section
5.02(c)), or takes action to become a voluntary bankrupt, or consents to
the filing of a bankruptcy proceeding against it, or files a proposal, a
notice of intention to make a proposal, a petition or answer or consent
seeking reorganization, readjustment, arrangement, composition or similar
relief under any bankruptcy law or any other similar applicable law or
consents to the filing of any such petition, or consents to the appointment
of a receiver, liquidator, trustee or assignee in bankruptcy or insolvency
of all or a substantial part of the property of any Credit Party, or makes
an assignment for the benefit of creditors, or admits its inability to pay
its debts generally as they become due or commits any other act of
bankruptcy, or suspends or threatens to suspend transaction of its usual
business, or any action is taken by any Credit Party in furtherance of any
of the aforesaid;
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(i) if a court having jurisdiction enters a decree or order adjudging
any Credit Party a bankrupt or insolvent, or approving as properly filed a
petition seeking reorganization, readjustment, arrangement, composition or
similar relief under any bankruptcy law or any other similar applicable
law, or a decree or order of a court having jurisdiction for the
appointment of a receiver, receiver and manager, liquidator, trustee or
assignee in bankruptcy or insolvency of all or a substantial part of the
undertaking or property of any Credit Party, or for the winding up,
dissolution or liquidation of its affairs, is entered and such decree,
order or petition is not contested and the effect thereof stayed, or if any
material part of the property of any Credit Party is sequestered or
attached and is not returned to the possession of such Credit Party or
released from such attachment, in each case within 30 days thereafter;
(j) if a receiver, manager, receiver and manager, trustee, custodian
or other similar official is appointed in respect of any Credit Party or
any material part of its property and, in the case of any such involuntary
appointment, the same is not being contested or the effect thereof has not
been stayed within 30 days thereof;
(k) if any proceeding, voluntary or involuntary, is commenced, or an
order or petition is issued, respecting any Credit Party pursuant to any
statute relating to bankruptcy, insolvency, reorganization of debts,
liquidation, winding-up or dissolution, including any proceeding, proposal,
notice of intention to make a proposal, order or petition under the
Bankruptcy and Insolvency Act (Canada), the United States Bankruptcy Code,
the Companies' Creditors Arrangement Act (Canada), the Winding-Up and
Restructuring Act (Canada) or any similar legislation in any other
jurisdiction and, in the case of any such involuntary proceeding or any
such order or petition issued in response to an involuntary proceeding, the
same is not being contested or the effect thereof has not been stayed
within 30 days thereafter;
(l) if a final judgment for an amount (net of applicable insurance
coverage which is acknowledged in writing by the insurer to the
satisfaction of the Agent, acting reasonably) in excess of $5,000,000 (or
the Equivalent Amount in any other currency or currencies) is rendered
against a Credit Party and, within 10 Business Days after entry thereof,
such judgment has not been discharged or execution thereof stayed pending
appeal or if, within 15 days after the expiration of any such stay, such
judgment has not been discharged;
(m) if an encumbrancer takes possession of any property of one or more
Credit Parties the value of which in the opinion of the Agent exceeds
$5,000,000 (or the Equivalent Amount in any other currency or currencies),
or if a distress or execution or any similar process is levied or enforced
against any property of one or more Credit Parties, the value of which in
the opinion of the Agent exceeds $5,000,000 (or the Equivalent Amount in
any other currency or currencies), and such distress, execution or similar
process remains unsatisfied for such period as would permit such property
or any part thereof to be sold thereunder, provided that such possession or
process has not been stayed and is not being contested by the applicable
Restricted Party (or if contested is not dismissed within 20 days);
(n) if a Credit Party ceases or threatens to cease to carry on in the
ordinary course its business or a substantial part thereof, except to the
extent permitted under Section 5.02(c);
(o) if there shall occur a government confiscation or expropriation
of any asset (including any License) or assets that could reasonably be
expected to have a Material Adverse Effect;
(p) if any Change of Control occurs; or
(q) if an Event of Default (as defined by the Bank Credit Agreement
or the Lucent Credit Agreement) occurs and is continuing or an Event of
Default (or other event which entitles a Security Beneficiary to accelerate
payment of Security Beneficiary Debt) occurs and is continuing pursuant to
any other Credit Agreement (as defined by the Collateral Agency and
Intercreditor Agreement),
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then, and in any such event (other than an event with respect to a Credit Party
described in clause (h), (i), (j) or (k) of this Article), and at any time
thereafter during the continuance of such event, the Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i) terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Credit Parties described in clause (h), (i), (j) or
(k) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest thereon
and all fees and other obligations of the Borrower accrued hereunder, shall
automatically become due and payable, without presentment, demand, protest,
noting of protest, dishonour or other notice of any kind, all of which are
hereby waived by the Borrower. All rights, power and remedies of the Agent, the
Collateral Agent and Lenders in connection with the Credit Documents may be
exercised at any time and from time to time after the occurrence of an Event of
Default, are cumulative and not exclusive, and shall be in addition to any other
rights, power or remedies provided by law or equity.
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ARTICLE VIII
The Agent
Each of the Lenders hereby irrevocably appoints the Agent as their agent
and authorizes such agent to enter into, and to take such actions on its behalf
and to exercise such powers as are delegated to such agent by the provisions of
the Credit Documents, together with such actions and powers as are reasonably
incidental thereto.
Any person serving as Agent hereunder shall have the same rights and powers
in its capacity as a Lender as any other Lender and may exercise the same as
though it were not an Agent, and such Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with a
Guarantor, the Borrower or any of their respective Affiliates as if it were not
an Agent hereunder.
The Agent shall not have any duties or obligations except those expressly
set forth in the Credit Documents. Without limiting the generality of the
foregoing, (a) the Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Credit Documents that such Agent is required to exercise as
directed in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Credit Documents,
the Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any Guarantor, the Borrower or
any of their respective Affiliates that is communicated to or obtained by the
Agent or any of its Affiliates in any capacity. The Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders (or such other number or percentage of the Lenders as shall
be necessary under the circumstances as provided in Section 9.02) or in the
absence of its own gross negligence or wilful misconduct. The Agent shall not be
liable for any indirect, incidental, consequential, special, exemplary or
punitive damages or damages for lost profits or revenues. The Agent shall be
deemed not to have knowledge of any Default unless and until written notice
thereof is given to the Agent by a Credit Party or a Lender, and the Agent shall
not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Credit
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Credit Document, (iv) the validity, enforceability, effectiveness
or genuineness of any Credit Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article IV or
elsewhere in any Credit Document, other than to confirm receipt of items
expressly required to be delivered to such Agent.
The Agent shall be entitled to rely upon, and shall not incur any liability
for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper person. The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to be made by the
proper person, and shall not incur any liability for relying thereon. The Agent
may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Agent shall not be obligated to
take any legal or other action hereunder which might in its judgment involve or
cause it to incur any expense or liability unless it shall have been furnished
with acceptable indemnification.
The Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-Agents appointed by such Agent. The
Agent and any such sub-Agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-Agent
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and to the Related Parties of each Agent and any such sub-Agent, and shall apply
to their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor Agent as provided
in this paragraph, an Agent may resign at any time by notifying the Lenders and
the Borrower. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor with the approval of the Borrower (not to be
unreasonably withheld or delayed). If no successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a
bank with an office in Toronto, or an Affiliate of any such bank. Upon the
acceptance of its appointment as Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. The fees payable by the Borrower to a
successor Agent shall be the same as those payable to its predecessor unless
otherwise agreed between the Borrower and such successor. After an Agent's
resignation hereunder, the provisions of this Article and Section 9.03 shall
continue in effect for the benefit of such retiring Agent, its sub-Agents and
their respective Related Parties in respect of any actions taken or omitted to
be taken by any of them while it was acting as Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Credit Document or related agreement or any
document furnished hereunder or thereunder.
Each of the Lenders irrevocably authorizes the Agent to enter into the
Collateral Agency and Intercreditor Agreement on its behalf, and acknowledges
and agrees that it shall be bound by the terms thereof as if it were a direct
signatory thereto.
ARTICLE IX
Miscellaneous
SECTION 9.01 NOTICES
Except in the case of notices and other communications expressly permitted
to be given by telephone, all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, or sent by telecopy, as follows:
(a) if to the Parent Guarantor, the Borrower or any other Guarantor
to the attention of General Counsel, 00 Xxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxxxx X0X 0X0 (Telecopy No. (000) 000-0000) with, in the case of a notice
of Default, a copy to Xxxxxxx Xxxxxxxx & Xxxxxxxx, 0000 XxXxxx Xxxxxxx
Xxxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxx X0X 0X0, Attention of Xxxxxx X. Xxxxx
(Telecopy No. (000) 000-0000);
(b) if to the Collateral Agent, to Montreal Trust Company of Canada,
c/o Computershare Investor Services Inc., 000 Xxxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxxxx X0X 0X0, Attention of Manager, Corporate Trust
(Telecopy No. (000) 000-0000);
(c) if to the Agent, to such address and number as is provided to the
Borrower and the Lenders upon appointment of such Agent;
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(d) if to Cisco, to Cisco Systems Capital Corporation, Mailstop
XX-XXXX-1/2, 3rd Floor, 000 Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx
00000-0000, to the attention of Loan Administration (Telecopy No. (508)
526-7269); and,
(e) if to any other Lender, to it at its address (or telecopy number)
as designated by it from time to time.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
delivered by hand, overnight courier service or telecopy.
SECTION 9.02 WAIVERS; AMENDMENTS
(a) No failure or delay by the Agent, the Collateral Agent or any Lender
in exercising any right or power hereunder or under any other Credit Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the Agent,
the Collateral Agent and the Lenders hereunder and under the other Credit
Documents are cumulative and are not exclusive of any rights or remedies that
they would otherwise have. No waiver of any provision of any Credit Document or
consent to any departure by any Credit Party therefrom shall in any event be
effective unless the same shall be permitted by paragraph (b) of this Section,
and then such waiver or consent shall be effective only in the specific instance
and for the purpose for which given. Without limiting the generality of the
foregoing, the making of a Loan shall not be construed as a waiver of any
Default, regardless of whether the Agent, the Collateral Agent or any Lender may
have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Credit Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by the
Credit Parties and the Required Lenders or, in the case of any other Credit
Document, pursuant to an agreement or agreements in writing entered into by the
Agent or Collateral Agent, as applicable thereunder, and the Credit Party or
Credit Parties that are parties thereto, in each case with the consent of the
Required Lenders; provided that no such agreement shall (i) increase the
Commitment of any Lender without the written consent of such Lender, (ii) reduce
the principal amount of any Loan, reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment of the principal amount of
any Loan, or any interest thereon, or any fees payable hereunder, or reduce the
amount of, waive or excuse any such payment, or postpone the scheduled date of
expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or Section 2.17(c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) change any of the provisions of this Section
or the definition of "REQUIRED LENDERS" or any other provision of any Credit
Document specifying the number or percentage of the Lenders required to waive,
amend or modify any rights thereunder or make any determination or grant any
consent thereunder, without the written consent of each Lender, (vi) release a
Guarantor from any Guarantee, or limit its liability in respect of such
Guarantee, without the written consent of each Lender or (vii) release or
discharge all or any substantial part of the Collateral from the Liens of the
Security Documents (except as expressly provided in the Security Documents),
without the written consent of each Lender or (viii) change any provision of any
Credit Document in a manner that by its terms adversely affects the rights in
respect of payments due to the Lenders holding certain Loans differently than
those holding certain other Loans, without the written consent of all Lenders;
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Agent or the Collateral Agent without its prior
written consent.
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(c) The Lenders acknowledge that pursuant to the provisions of this
Agreement, certain Permitted Debt may be secured by Liens on certain Collateral.
Any intercreditor agreement or other security or lien sharing agreement to be
entered into will reflect the sharing of Liens as contemplated by this Agreement
and shall require the written approval of the Required Lenders (not to be
unreasonably withheld).
SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE WAIVER
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses
incurred by the Lenders, the Agent and the Collateral Agent, including the
reasonable fees, charges and disbursements of counsel for and any consultants
and appraisers retained by the Lenders or such agents, in connection with
Cisco's due diligence investigation related to the extension of credit hereunder
and the negotiation, preparation and execution of this Agreement, the
Guarantees, the Security and ancillary documents related thereto (whether or not
the transactions contemplated hereby or thereby shall be consummated); provided
that the aggregate amount of expenses that the Borrower shall be obligated to
pay pursuant to this clause (i) shall be subject to the limitations, if any,
separately agreed between the Borrower and Cisco pursuant to the agreement
referred to in Section 2.11; and (ii) all out-of-pocket expenses incurred by the
Agent, the Collateral Agent, or any Lender, including the fees, charges and
disbursements of any counsel for either agent or any Lender, in connection with
the administration of the Credit Documents, or any amendments, modifications or
waivers of the provisions thereof, or the enforcement or protection of its
rights in connection with the Credit Documents including its rights under this
Section, or in connection with the Loans made hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or any investigation of any alleged
Defaults hereunder.
(b) The Credit Parties, jointly and severally, shall indemnify the Agent,
the Collateral Agent and each Lender, and each Related Party of any of the
foregoing persons (each such person being called an "INDEMNITEE") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Credit Document or any other agreement or
instrument contemplated hereby, the performance by the parties to the Credit
Documents of their respective obligations thereunder or the consummation of the
Transactions or any other transactions contemplated hereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) any actual or alleged presence or release
of any Hazardous Substance on or from any property charged by Security or any
other property owned or operated by any Credit Party, or any Environmental
Liability related in any way to any Credit Party or any of its subsidiaries, or
(iv) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Agent or the Collateral Agent under paragraphs (a) or (b) of
this Section, each Lender severally agrees to pay to the Agent or the Collateral
Agent, as the case may be, such Lender's pro rata share (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Agent or the Collateral Agent in its capacity as such.
For purposes hereof, a Lender's "pro rata share" shall be determined based on
its share of the sum of the total principal amount of the Loans then outstanding
and on the then unused Commitments and, in the case of amounts payable to the
Collateral Agent, based also on the provisions of the Collateral Agency and
Intercreditor Agreement.
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(d) To the extent permitted by applicable law, no Credit Party shall
assert, and each hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, incidental, exemplary, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable not later than 30
days after written demand therefor.
SECTION 9.04 SUCCESSORS AND ASSIGNS
(a) The provisions of this Agreement shall be binding on and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Credit Parties may not assign or otherwise
transfer any of their rights or obligations hereunder without the prior written
consent of the Agent and each Lender (and any attempted assignment or transfer
by a Credit Party without such consent shall be null and void). Nothing in this
Agreement, expressed or implied, shall be construed to confer on any person
(other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, the Related
Parties of each of the Agent, the Collateral Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans and other Indebtedness at the time owing to it);
PROVIDED that (i) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment or Loans, the amount of the Commitment or Loans of
the assigning Lender subject to each such assignment (determined as of the date
the Assignment and Acceptance with respect to such assignment is delivered to
the Agent) shall not be less than $5,000,000 unless the Borrower otherwise
consents, (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement, except that this clause (ii) shall not be construed to prohibit
the assignment of (A) a proportionate part of all the assigning Lender's rights
and obligations in respect of Commitments or Loans or (B) a proportionate part
of the assigning Lender's outstanding Loans without assigning any Commitment,
(iii) the parties to each assignment shall execute and deliver to the Agent an
Assignment and Acceptance, and (iv) the assignee, if it shall not be a Lender,
shall deliver to the Agent an administrative questionnaire in form required by
the Agent; and provided further that any consent of the Borrower otherwise
required under this paragraph shall not be required if an Event of Default has
occurred and is continuing. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its future obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Section 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Agent shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitment of, and principal
amount of the Loans owing to, each Lender pursuant to the terms hereof from time
to time (the "REGISTER"). The entries in the Register shall be conclusive, and
each Guarantor, the Borrower, the Agent, the Collateral Agent and the Lenders
may treat each person
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whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the
contrary. The Register shall be available for inspection by the Borrower and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
administrative questionnaire (unless the assignee shall already be a Lender
hereunder) and any written consent to such assignment required by paragraph (b)
of this Section, the Agent shall accept such Assignment and Acceptance and
record the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or any other
Credit Party or the Agent, sell participations to one or more banks or other
entities (a "PARTICIPANT") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Credit Parties, the Agent, the Collateral Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Credit
Documents and to approve any amendment, modification or waiver of any provision
of the same; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. The Borrower agrees that each Participant shall be
entitled to the benefits of Section 2.14, 2.15 and 2.16 to the same extent as if
it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 9.08 as though it were a
Lender, provided such Participant agrees to be subject to Section 2.17(c) as
though it were a Lender.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to the U.S.
Federal Reserve Bank or similar entity in any other applicable jurisdiction, and
this Section shall not apply to any such pledge or assignment of a security
interest; PROVIDED that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05 SURVIVAL
All covenants, agreements, representations and warranties made by the
Credit Parties in the Credit Documents and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement or any
other Credit Document shall be considered to have been relied upon by the other
parties hereto and shall survive the execution and delivery of the Credit
Documents and the making of any Loans, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that either the Agent,
the Collateral Agent or any Lender may have had notice or knowledge of any
Default or incorrect representation or warranty at the time any credit is
extended hereunder, and shall continue in full force and effect as long as any
Indebtedness is outstanding and unpaid and so long as the Commitments have not
expired or terminated. The provisions of Section 2.14, 2.15, 2.16 and 9.03 and
Article VIII shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the payment of the
Indebtedness, the expiration or termination of the Commitments or the
termination of this Agreement or any provision hereof.
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SECTION 9.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS
This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement and the other Credit Documents constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. This Agreement shall become effective when it shall have been
executed by the Agent and when the Agent shall have received counterparts hereof
which, when taken together, bear the signatures of each of the other parties
hereto, and thereafter shall be binding on and inure to the benefit of the
parties hereto and their respective successors and assigns.
SECTION 9.07 SEVERABILITY
Any provision of this Agreement held by a court of competent jurisdiction
to be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction. The parties shall endeavour in good faith negotiations to replace
the invalid, illegal or unenforceable provision with valid provisions, the
economic effect of which is as close as possible to that of the invalid, illegal
or unenforceable provision.
SECTION 9.08 RIGHT OF SETOFF
If an Event of Default shall have occurred and be continuing, each Lender
and each of its Affiliates is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other obligations at any time owing by such Lender or Affiliate to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09 GOVERNING LAW
This Agreement and all certificates and other documents delivered to the
Agent and the Lenders hereunder, unless otherwise specified therein, shall be
construed and interpreted in accordance with the laws of Ontario. The Borrower
and each of the Guarantors hereby voluntarily and irrevocably submits itself to
the jurisdiction of the courts of Ontario to enable the Agent or the Lenders or
any of them to commence and carry to a conclusion any suit, action or proceeding
for the collection of any and all amounts payable by the Borrower or the
Guarantor hereunder and/or the enforcement of any other right or security given
to the Agent, the Collateral Agent or the Lenders or any of them by the Borrower
or the Guarantor in connection with any amount payable hereunder. The Borrower
and each Guarantor hereby further agrees that any final judgment or decree
against it and/or its property in any such suit, action or proceeding shall be
conclusive on it and such property and all parties in interest, and may be
enforced in any court or tribunal in any other country by suit on the judgment
or decree, a certified copy of which shall be conclusive evidence thereof.
SECTION 9.10 HEADINGS
Article and Section headings and the Table of Contents used herein are for
convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
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SECTION 9.11 CONFIDENTIALITY
(a) Each of the Agent and the Lenders (each a "LENDER PARTY") agrees to
take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information respecting the Credit Parties and their
businesses ("CUSTOMER INFORMATION"). Each Credit Party agrees that a Lender
Party may disclose from time to time all Customer Information in its possession
to such Lender Party's legal counsel, agents and other professional advisors, to
its Subsidiaries and affiliates, to any potential assignees or participants of
the rights and/or obligations of such Lender Party hereunder, to any
underwriters or placement agents for any securities to be issued by such Lender
Party or any of its Subsidiaries or affiliates (or any transferee of any such
Subsidiaries or affiliates) and to any rating agency rating such securities and
to their respective legal counsel, agents and other professional advisors. Each
Credit Party also consents to the disclosure of Customer Information by a Lender
Party, or any of its Subsidiaries or affiliates, (i) at the request of any
governmental agency or authority having jurisdiction over a Lender Party or such
Subsidiary or affiliate, (ii) pursuant to subpoena or other court process, (iii)
to the extent reasonably required in connection with any litigation to which a
Lender Party or any of its Subsidiaries or affiliates is a party, (iv) to the
extent reasonably required in connection with the exercise of any remedy
hereunder or under any other Credit Document, (iv) when otherwise required to do
so in accordance with Applicable Law, and (v)(A) to the extent such information
is made available by a Credit Party or was or becomes generally available to the
public other than as a result of disclosure by a Lender Party, or (B) was or
becomes available on a non-confidential basis from a source other than a Credit
Party, provided that such source is not bound by a confidentiality agreement
with a Credit Party known to such Lender Party. A Lender Party shall provide
prior notice to the Borrower of any proposed public announcements or other
public disclosure or filings of or relating to this Agreement and the terms and
provisions hereof as permitted by this subsection (a) ("LENDER PUBLIC
DISCLOSURE"), and no Lender Public Disclosure may be made in respect of the
repayment terms, fees, interest rates and other pricing information with respect
hereto without the prior consent of the Borrower (such consent not to be
unreasonably withheld). Prior to making any required filing with the U.S.
Securities and Exchange Commission or any other federal, state, provincial or
foreign governmental agency or authority as part of any Lender Public
Disclosure, a Lender Party shall request confidential treatment of the repayment
terms, fees, interest rate and other pricing information with respect hereto to
the extent permitted by Applicable Law.
(b) Each Credit Party agrees to take normal and reasonable precautions and
exercise due care to maintain the confidentiality of this Agreement and the
other Credit Documents and the terms and provisions thereof. Each Lender Party
agrees that a Credit Party may disclose from time to time the existence of this
Agreement and the other Credit Documents and the terms and provisions thereof to
a Credit Party's legal counsel, agents and other professional advisors, and to
its Subsidiaries and affiliates, as reasonably required in connection with
negotiations with a prospective acquirer of a Credit Party or substantially all
of a Credit Party's assets or a prospective merger partner, to any prospective
equity investor in a Credit Party, to any bank or other financial institution
providing financing to a Credit Party or any of its Subsidiaries or affiliates,
to any underwriters or placement agents for any securities to be issued by a
Credit Party or any of its Subsidiaries or affiliates and to any rating agency
rating such securities and to their respective legal counsel, agents and other
professional advisors. Each Lender Party also consents to the disclosure of this
Agreement and the other Credit Documents and the terms and provisions thereof by
a Credit Party, or any of its Subsidiaries or affiliates, (i) at the request of
any governmental agency or authority having jurisdiction over a Credit Party or
such Subsidiary or affiliate, (ii) pursuant to subpoena or other court process,
(iii) to the extent reasonably required in connection with any litigation to
which a Credit Party or any of its Subsidiaries or affiliates is a party, (iv)
when otherwise required to do so in accordance with Applicable Law, and (v)(A)
to the extent such information is made available by a Lender Party or was or
becomes generally available to the public other than as a result of disclosure
by a Credit Party, or (B) was or becomes available on a non-confidential basis
from a source other than a Lender Party, provided that such source is not bound
by a confidentiality agreement with a Lender Party known to
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such Credit Party. The foregoing permitted disclosure does not include
disclosure to any other vendor providing vendor financing to a Credit Party or
any of its Subsidiaries (whether directly or indirectly). A Credit Party shall
provide prior notice to the Lender Parties of any proposed public announcements
or other public disclosure or filings of or relating to this Agreement or the
other Credit Documents and the terms and provisions thereof as permitted by this
subsection (b) ("CREDIT PARTY PUBLIC DISCLOSURE"), and no Credit Party Public
Disclosure may be made in respect of the repayment terms, fees, interest rates
and other pricing information with respect hereto without the prior consent of
the Lender Parties (such consent not to be unreasonably withheld). Prior to
making any required filing with the U.S. Securities and Exchange Commission or
any other federal, state, provincial or foreign governmental agency or authority
as part of any Credit Party Public Disclosure, a Credit Party shall request
confidential treatment of the repayment terms, fees, interest rate and other
pricing information with respect hereto to the extent permitted by Applicable
Law.
SECTION 9.12 INTEREST RATE LIMITATION
Notwithstanding anything herein to the contrary, if at any time the
interest rate applicable to any Loan or other Indebtedness, together with all
fees, charges and other amounts which are treated as interest on such Loan under
applicable law (collectively the "CHARGES"), shall exceed the maximum lawful
rate (the "MAXIMUM RATE") which may be contracted for, charged, taken, received
or reserved by the Lenders holding such Loan in accordance with Applicable Law,
the rate of interest payable in respect of such Loan or other Indebtedness
hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan or other Indebtedness but
were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Maximum Rate to the date
of payment, shall have been received by such Lender.
SECTION 9.13 CURRENCY CONVERSIONS
Any payment made hereunder or under any of the Credit Documents in any
currency other than the currency in which such payment is required to be made
pursuant to the applicable agreement or instrument shall discharge the
obligation to make such payment only to the extent to which the amount so
received by the payee in the currency in which payment is made is sufficient,
when converted at the rate of exchange prevailing on the date of receipt or, if
not received on a Business Day or if receipt is after 4:00 p.m. local time of
the payee on any Business Day, on the next following Business Day to produce the
amount due in the currency in which such payment is so required to be made
thereunder.
If for the purposes of obtaining or enforcing judgment in any court in any
jurisdiction it becomes necessary to convert into any currency (the "JUDGMENT
CURRENCY") an amount which is payable, pursuant to the provisions of the
applicable Credit Document, in another currency (the "ORIGINAL CURRENCY"), then
the date selected by that court as the date as of which the rate of exchange for
conversion is to be determined is referred to herein as the "CURRENCY CONVERSION
DATE". If there is any change in the rate of exchange between the Judgment
Currency and the Original Currency between the Currency Conversion Date and the
time of actual receipt by the payee of the amount due pursuant to the applicable
Credit Document or under such judgment, the person obligated to make such
payment shall, notwithstanding any such judgment, and as a separate and
additional obligation, pay all such additional amounts as may be necessary, to
ensure that the amount received by the payee in the Judgment Currency, when
converted at the rate of exchange prevailing at the time of receipt, (or, if the
receipt date is not a Business Day or if receipt is after 4:00 p.m. local time
of the payee on any Business Day, on the next following Business Day) will
produce the amount due in the Original Currency.
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For purposes of this Section, the term "RATE OF EXCHANGE" includes any
premiums or costs payable in connection with the currency conversion effected.
[SIGNATURES TO FOLLOW ON NEXT PAGE.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
GT GROUP TELECOM SERVICES CORP., as the Borrower
By:/s/ XXXXXX XXXXX
-------------------------------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President, Treasury
GT GROUP TELECOM INC., as a Guarantor
By:/s/ XXXXXX XXXXX
-------------------------------------------------------------
Name: Xxxxxx Xxxxx
Title: Vice President, Treasury
GT GROUP TELECOM SERVICES (USA) CORP., as a Guarantor
By:/s/ XXXXXX XXXXX
-------------------------------------------------------------
Name: Xxxxxx Xxxxx
Title: Senior Vice President & General Counsel
CISCO SYSTEMS CAPITAL CORPORATION, as a Lender and as the Agent
By:/s/ XXXXX X. XXXXXXXX
-------------------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chief Credit Officer
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