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EXHIBIT 10.34
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CREDIT AGREEMENT
dated as of November 15, 1999
by and among
FACILICOM INTERNATIONAL, L.L.C.
as Borrower
and
NORTEL NETWORKS INC.
as Administrative Agent
and
THE LENDERS NAMED HEREIN
$40,000,000 REVOLVING LOAN FACILITY
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TABLE OF CONTENTS
Page
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ARTICLE 1 - Definitions 1
Section 1.1 Definitions, etc 1
Section 1.2 Other Definitional Provisions. 24
Section 1.3 Accounting Terms and Determinations. 24
Section 1.4 Financial Covenants and Reporting. 25
ARTICLE 2 - Loans 25
Section 2.1 Commitments 25
Section 2.2 Notes. 26
Section 2.3 Repayment of Loans. 26
Section 2.4 Interest. 26
Section 2.5 Borrowing Procedure. 27
Section 2.6 Optional Prepayments, Conversions and Continuations of Loans. 28
Section 2.7 Mandatory Prepayments. 28
Section 2.8 Minimum Amounts. 28
Section 2.9 Certain Notices. 29
Section 2.10 Use of Proceeds. 30
Section 2.11 Computations. 30
Section 2.12 Termination or Reduction of Commitments. 30
ARTICLE 3 - Payments 31
Section 3.1 Method of Payment. 31
Section 3.2 Pro Rata Treatment. 31
Section 3.3 Sharing of Payments, etc. 31
Section 3.4 Non-Receipt of Funds by the Administrative Agent. 32
Section 3.5 Taxes. 32
Section 3.6 Withholding Tax Exemption 33
Section 3.7 Reinstatement of Obligations. 34
Section 3.8 No Force Majeure, Disputes. 34
ARTICLE 4 - Yield Protection and Illegality 34
Section 4.1 Additional Costs. 34
Section 4.2 Limitation on Types of Loans. 36
Section 4.3 Illegality 36
Section 4.4 Treatment of Affected Loans. 36
Section 4.5 Compensation. 37
Section 4.6 Capital Adequacy. 37
Section 4.7 Additional Interest on Eurodollar Loans. 38
Section 4.8 Replacement of Lenders. 38
Section 4.9 Change of Applicable Lending Office. 39
ARTICLE 5 - Security 39
Section 5.1 Collateral. 39
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Section 5.2 Guaranties. 39
Section 5.3 Landlord Waivers or Subordinations. 39
Section 5.4 Further Assurances. 39
Section 5.5 Setoff. 39
ARTICLE 6 - Conditions Precedent 40
Section 6.1 Initial Extension of Credit. 40
Section 6.2 All Extensions of Credit. 43
Section 6.3 Closing Certificates. 43
ARTICLE 7 - Representations and Warranties 44
Section 7.1 Existence. 44
Section 7.2 Financial Statements. 44
Section 7.3 Corporate Action; No Breach. 45
Section 7.4 Operation of Business; Licenses and Permits. 45
Section 7.5 Intellectual Property. 45
Section 7.6 Litigation and Judgments. 46
Section 7.7 Rights in Properties; Liens. 46
Section 7.8 Enforceability. 46
Section 7.9 Approvals. 46
Section 7.10 Debt. 47
Section 7.11 Taxes. 47
Section 7.12 Margin Securities. 47
Section 7.13 ERISA 47
Section 7.14 Disclosure 47
Section 7.15 Loan Parties. 47
Section 7.16 Compliance with Laws. 48
Section 7.17 Investment Company Act. 48
Section 7.18 Public Utility Holding Company Act. 48
Section 7.19 Environmental Matters. 48
Section 7.20 Year 2000 Compliance. 49
Section 7.21 Labor Disputes and Acts of God. 49
Section 7.23 Insurance. 50
Section 7.24 Common Enterprise. 50
Section 7.25 Burdensome Agreements. 50
ARTICLE 8 - Affirmative Covenants 50
Section 8.1 Reporting Requirements. 50
Section 8.2 Maintenance of Existence; Conduct of Business. 52
Section 8.3 Maintenance of Properties and Permits. 53
Section 8.4 Taxes and Claims. 53
Section 8.5 Insurance. 53
Section 8.6 Inspection Rights. 54
Section 8.7 Keeping Books and Records. 54
Section 8.8 Compliance with Laws. 54
Section 8.9 Maintenance of and Compliance with Agreements. 54
Section 8.10 Further Assurances. 55
Section 8.11 ERISA. 55
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Section 8.12 Non-Consolidation. 55
Section 8.13 Year 2000 Compliance. 55
Section 8.14 Delivery of Certain Amendments. 56
Section 8.15 Ownership of Telecommunications Assets and Telecommunications
Business; Holdings to Remain a Holding Company. 56
ARTICLE 9 - Negative Covenants 56
Section 9.1 Debt. 56
Section 9.2 Limitation on Liens. 56
Section 9.3 Mergers, etc. 57
Section 9.4 Restricted Payments. 57
Section 9.5 [Intentionally omitted.]. 58
Section 9.6 Limitation on Issuance of Capital Stock. 58
Section 9.7 Transactions with Affiliates. 58
Section 9.8 Disposition of Property. 58
Section 9.9 [INTENTIONALLY OMITTED.] 59
Section 9.10 [INTENTIONALLY OMITTED.] 59
Section 9.11 Environmental Protection. 59
Section 9.12 Intercompany Transactions. 59
Section 9.13 Master Purchase Agreement. 59
Section 9.14 Modification of Certain Agreements. 60
Section 9.15 ERISA. 60
ARTICLE 10 - Financial Covenants 60
Section 10.1 Annualized EBITDA. 60
Section 10.2 Fixed Charge Coverage. 60
Section 10.3 Gross Revenues. 60
Section 10.4 Minutes of Use. 61
Section 10.5 Revision of Financial Covenants. 61
ARTICLE 11 - Default 61
Section 11.1 Events of Default. 61
Section 11.2 Remedies. 64
Section 11.3 Performance by the Administrative Agent, etc. 64
ARTICLE 12 - The Administrative Agent 65
Section 12.1 Appointment, Powers and Immunities. 65
Section 12.2 Rights of Administrative Agent as a Lender. 66
Section 12.3 Defaults. 66
Section 12.4 INDEMNIFICATION. 66
Section 12.5 Independent Credit Decisions. 67
Section 12.6 Several Commitments. 67
Section 12.7 Successor Administrative Agent. 68
ARTICLE 13 - Miscellaneous 68
Section 13.1 Expenses. 68
Section 13.2 INDEMNIFICATION. 69
Section 13.3 Limitation of Liability. 70
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Section 13.4 No Duty. 70
Section 13.5 No Fiduciary Relationship. 70
Section 13.6 Equitable Relief. 71
Section 13.7 No Waiver; Cumulative Remedies 71
Section 13.8 Successors and Assigns. 71
Section 13.9 Survival. 75
Section 13.10 ENTIRE AGREEMENT. 75
Section 13.11 Amendments. 75
Section 13.12 Maximum Interest Rate. 76
Section 13.13 Notices. 77
Section 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF PROCESS. 77
Section 13.15 Counterparts. 77
Section 13.16 Severability. 78
Section 13.17 Headings. 78
Section 13.18 Construction. 78
Section 13.19 Independence of Covenants. 78
Section 13.20 Confidentiality. 78
Section 13.21 WAIVER OF JURY TRIAL. 79
Section 13.22 Approvals and Consent. 79
Section 13.23 Service of Process. 80
Section 13.24 Acknowledgment relating to the Holdings Merger. 80
Section 13.25 Purchase of Nortel Networks Equipment. 80
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INDEX TO EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Note
Exhibit C - Form of Notice of Borrowings, Conversions, Continuations and
Prepayments
Exhibit D - Form of Compliance Certificate
INDEX TO SCHEDULES
Schedule 7.6 - Litigation, Etc.
Schedule 7.10 - Existing Debt
Schedule 7.15 - Loan Parties
Schedule 7.23 - Insurance
Schedule 10.1 - Annualized EBITDA
Schedule 10.2 - Fixed Charge Coverage
Schedule 10.3 - Gross Revenues
Schedule 10.4 - Minutes of Use
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 15, 1999, is by and among
FACILICOM INTERNATIONAL, L.L.C. (the "Borrower"), a Delaware limited liability
company, each of the lending entities which is a party hereto (as evidenced by
the signature pages of this Agreement) or which may from time to time become a
party hereto as a lender or any successor or assignee thereof (individually, a
"Lender" and, collectively, the "Lenders"), and NORTEL NETWORKS INC., a
Delaware corporation, as administrative agent for itself as a Lender and the
other Lenders (in such capacity, together with its successors in such capacity,
the "Administrative Agent").
RECITALS:
A. The Borrower desires to obtain a $40,000,000 revolving loan
facility to finance its costs to purchase Nortel Networks Goods and Services
(as defined herein).
B. The Lender(s) identified on the signature pages of this
Agreement desire to provide such credit facility with the assistance of the
Administrative Agent upon and subject to the terms and provisions contained in
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions, etc. As used in this Agreement, the following
terms shall have the following meanings:
"Additional Costs" means as specified in Section 4.1(a).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/16 of one percent) determined by the Administrative Agent to be
equal to (a) the Eurodollar Rate for such Eurodollar Loan for such Interest
Period divided by (b) one minus the Reserve Requirement for such Eurodollar
Loan for such Interest Period.
"Adjusted Net Income" means, as to any Person (the "subject Person")
and its Consolidated Subsidiaries and for any period, Consolidated Net Income
less the following (without duplication) to the extent that any of the
following shall have been included in Consolidated Net Income for such period:
(a) any net gain or loss arising from the sale of any property, plant or
equipment; (b) any net gain or loss arising from any write-up or write-down of
assets; (c) earnings or losses of any other Person, substantially all of the
assets of which have been acquired by the subject Person or a Consolidated
Subsidiary of the subject Person in any manner, to the extent that such
earnings or losses were realized by such other Person prior to the date of such
acquisition; (d) earnings or losses of any Person (other than a Consolidated
Subsidiary of the subject Person) in which the subject Person or a Consolidated
Subsidiary of the
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subject Person has an ownership interest, unless such earnings have actually
been received by the subject Person or such Consolidated Subsidiary in the form
of cash distributions; (e) any net gain or loss arising from the acquisition of
any securities of the subject Person or a Consolidated Subsidiary of the
subject Person; and (f) any net gain of an extraordinary nature or any net loss
of an extraordinary nature, in each case as determined in accordance with GAAP.
"Administrative Agent" means as specified in the introductory paragraph
of this Agreement.
"Affiliate" means, as to any Person, any other Person (a) that
directly or indirectly through one or more intermediaries controls or is
controlled by, or is under direct or indirect common control with, such first
Person, (b) that directly or indirectly beneficially owns or holds ten percent
or more of any class of voting Capital Stock of such first Person, or (c) ten
percent or more of the voting Capital Stock of which is directly or indirectly
beneficially owned or held by such first Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing. For purposes of the Loan Documents, neither the Administrative Agent
nor any Lender shall be deemed to be an Affiliate of the Borrower or any Loan
Party.
"Agreement" means this Agreement and any and all amendments,
modifications, supplements, renewals, extensions or restatements hereof.
"Annualized EBITDA" means, as to any Person and its Consolidated
Subsidiaries and for the applicable period, EBITDA for the two most recently
completed fiscal quarters multiplied by two.
"Applicable Lending Office" means, for each Lender and each Type of
Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan below its name on the signature pages hereof
(or, with respect to a Lender that becomes a party to this Agreement pursuant
to an assignment made in accordance with Section 13.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to the Borrower
and the Administrative Agent as the office by which its Loans of such Type are
to be made and maintained.
"Applicable Margin" means the rate per annum equal to (a) with respect
to each Base Rate Loan, two and three-quarters of one percent (2.75%) and (b)
with respect to each Eurodollar Loan, three and three-quarters of one percent
(3.75%).
"Approved Fund" means (a) with respect to any Lender which is a fund
primarily engaged in making, purchasing or otherwise investing in commercial
loans, any other fund which is primarily engaged in making, purchasing or
otherwise investing in commercial loans or extending, or investing in extensions
of, credit for its own account in the ordinary course of its business and which
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor or (b) any other entity which has been
approved by the Administrative Agent and which is (or which is managed by a
manager which manages funds which are) primarily engaged in making, purchasing
or otherwise investing in commercial loans
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or extending, or investing in extensions of, credit for its own account in the
ordinary course of its business; provided, however, that Approved Fund shall not
include any Affiliate of the Borrower.
"Asset Disposition" means the disposition of any or all of the
Property of the Borrower or any of its Subsidiaries, whether by sale, lease,
transfer, assignment, condemnation or otherwise, but excluding (a) sales of
inventory in the ordinary course of business, (b) the grant of a Lien as
security, (c) any involuntary disposition resulting from casualty damage to, or
condemnation of, Property, and (d) dispositions of equipment if and to the
extent that the equipment disposed of is, concurrently therewith, exchanged or
replaced by equipment of equal or greater value.
"Assignee" means as specified in Section 13.8(b).
"Assigning Lender" means as specified in Section 13.8(b).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and its Assignee and accepted by the Administrative Agent
pursuant to Section 13.8(e), in substantially the form of Exhibit A hereto.
"Bankruptcy Code" means as specified in Section 11.1(e).
"Base Rate" means, at any time, the greater of (a) the rate of
interest per annum then most recently announced or established by the Reference
Bank at its principal office in New York City as its highest commercial prime
or base rate then in effect, or (b) the Federal Funds Rate then in effect plus
one-half of one percent (0.50%). The Base Rate may not necessarily be the
lowest rate of interest charged by the Reference Bank to its commercial
borrowers. Each change in any interest rate provided for herein based upon the
prime or base rate or the Federal Funds Rate resulting from a change in the
prime or base rate or the Federal Funds Rate, respectively, shall take effect
without notice to the Borrower at the time of such change in the prime or base
rate or the Federal Funds Rate, respectively.
"Base Rate Loans" means Loans that bear interest at rates based upon
the Base Rate.
"Basle Accord" means the proposals for risk-based capital framework
described by the Basle Committee on Banking Regulations and Supervisory
Practices in its paper entitled "International Convergence of Capital
Measurement and Capital Standards" dated July 1988, as amended, supplemented
and otherwise modified and in effect from time to time, or any replacement
thereof.
"Board of Directors" means the board of directors of the Borrower or
other Person (as applicable).
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Borrower or other Person (as
applicable) to have been duly adopted by its Board of Directors and to be in
full force and effect on the date of such certification.
"Borrower" means as specified in the initial paragraph of this
Agreement.
"Borrower Security Agreement" means that certain Security Agreement
dated as of the
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Closing Date executed by the Borrower to and in favor of the Administrative
Agent, and any and all amendments, modifications, supplements, renewals,
extensions, restatements or replacements thereof.
"Business Day" means (a) any day other than a Saturday, Sunday or
other day on which commercial banks are authorized or required by law to close
in New York, New York, Washington, D.C. or Dallas, Texas, and (b) with respect
to all borrowings, payments, Conversions, Continuations, Interest Periods and
notices in connection with Eurodollar Loans, any day which is a Business Day
described in clause (a) above and which is also a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Business Plan" means the Borrower's marketing and Network build-out
plans, budget and schedule as submitted to and approved by the Administrative
Agent, including financial projections of Holdings, the Borrower and the
Consolidated Subsidiaries of the Borrower for the five year period beginning on
the Closing Date, certified by the chief financial officer of the Borrower as
being prepared generally in accordance with GAAP (except for the absence of
footnotes), such projections giving effect to the Debt to be incurred under
this Agreement as well as the other Debt to be incurred by Holdings, the
Borrower and the Consolidated Subsidiaries of the Borrower during such period.
Unless any amendment or modification thereto or replacement thereof is
permitted by Section 9.14 or, in the case of the revised Business Plan assuming
consummation of the Holdings Merger, is reasonably acceptable to the
Administrative Agent, the Business Plan dated as of September 1999 (version 1)
shall be the Business Plan for purposes of this Agreement.
"Capital Lease Obligations" means, as to any Person and its
Consolidated Subsidiaries, the obligations of such Persons to pay rent or other
amounts under a lease of (or other agreement conveying the right to use) real
and/or personal Property, which obligations are classified as a capital lease
on a balance sheet of such Persons under GAAP. For purposes of this Agreement,
the amount of such Capital Lease Obligations shall be the capitalized amount
thereof, determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all securities,
shares, partnership interests (whether general, limited, special or other
partnership interests), limited liability company interests, membership
interests, equity interests, participations, rights or other equivalents
(however designated) of corporate stock or any of the foregoing issued by any
entity (whether a corporation, a partnership, a limited liability company or
another entity) and includes, without limitation, securities convertible into
Capital Stock and rights or options to acquire Capital Stock.
"Change in Control" means (a) prior to consummation of the Holdings
Merger, the existence or occurrence of any of the following: (i) any of the
Capital Stock of the Borrower is owned by any Person other than Holdings, (ii)
individuals who, as of the Closing Date, constitute the Board of Directors of
Holdings (the "Holdings Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors of Holdings, provided, however, that
any individual becoming a director of Holdings subsequent to the Closing Date
whose election or nomination for election by Holdings' shareholders was
approved by a vote of at least a majority of the directors then comprising the
Holdings Incumbent Board shall be considered as though such individual were a
member of the Holdings Incumbent Board, but excluding, for this
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purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or contest by or on behalf
of a Person other than the Board of Directors of Holdings, (iii) Xxxxxxxxx
International Telecommunications, Inc. shall cease to own, directly and
beneficially and of record, seventy-five percent (75%) or more of each class of
the issued and outstanding voting Capital Stock of Holdings, or (iv) Xxxxxxxxx
Holdings, Inc. or an internationally recognized telecommunications operator
whose securities are investment grade shall cease to own, directly and
beneficially and of record, seventy-five percent (75%) of each class of the
issued and outstanding voting Capital Stock of Xxxxxxxxx International
Telecommunications, Inc., or (b) concurrently with or after consummation of the
Holdings Merger, any of the Capital Stock of the Borrower is owned by any
Person other than World Access.
"Closing Date" means November 15, 1999, the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means the "Collateral" as such term is defined in the
Borrower Security Agreement.
"Commitment" means, as to any Lender, the obligation of such Lender to
make or continue Loans hereunder in an aggregate principal amount up to but not
exceeding the amount set forth opposite the name of such Lender on the
signature pages hereto under the heading "Commitment" or, if such Lender is a
party to an Assignment and Acceptance, the amount of the "Commitment" set forth
in the most recent Assignment and Acceptance of such Lender, as the same may be
reduced or terminated pursuant to Section 2.12 or 11.2, and "Commitments" means
such obligations of all Lenders. As of the Closing Date, the aggregate
principal amount of the Commitments is $40,000,000.
"Commitment Percentage" means, as to any Lender and its Commitment,
the percentage equivalent of a fraction, the numerator of which is the amount
of the outstanding Commitment of such Lender (or, if such Commitment has
terminated or expired, the outstanding principal amount of the Loans of such
Lender) and the denominator of which is the aggregate amount of the outstanding
Commitments of all Lenders (or, if such Commitments have terminated or expired,
the aggregate outstanding principal amount of the Loans of all Lenders), as
adjusted from time to time in accordance with Section 13.8.
"Commitment Termination Date" means December 22, 2000.
"Communications Act" means the Communications Act of 1934, and any
similar or successor federal statute, and the rules and regulations of the FCC
thereunder, all as amended and as the same may be in effect from time to time.
"Consolidated Fixed Charges" means, as to any Person and its
Consolidated Subsidiaries and for any period, the sum of (without duplication)
(a) all Consolidated Interest Expense of such Persons paid or payable in cash
during such period, plus (b) all scheduled payments (as such scheduled payments
are reduced by application of any prepayments) of principal with respect to
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the Loans and other outstanding Debt during such period, plus (c) all finance
or similar charges of such Persons paid or payable in cash during such period.
"Consolidated Interest Expense" means, as to any Person and its
Consolidated Subsidiaries and for any period, and without duplication, all
interest on Debt of such Persons paid or payable in cash during such period,
including the interest portion of payments under Capital Lease Obligations.
"Consolidated Net Income" means, as to any Person and its Consolidated
Subsidiaries and for any period, the net income (or loss) of such Persons for
such period, determined on a consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means, with respect to any Person, any
Subsidiary the financial attributes of which are or would be consolidated with
those of such Person in the consolidated financial statements of such Person in
accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.6 of a Eurodollar Loan as a Eurodollar Loan
of the same Type from one Interest Period to the next Interest Period.
"Contract Rate" means as specified in Section 13.12(a).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.
"Current Date" means (a) a date occurring no more than 30 days prior
to the Closing Date or other relevant date as may be specified herein (as
applicable) or (b) such earlier date which is acceptable to the Administrative
Agent.
"Debt" means as to any Person at any time (without duplication): (a)
all indebtedness, liabilities and obligations of such Person for borrowed
money; (b) all indebtedness, liabilities and obligations of such Person
evidenced by bonds, notes, debentures or other similar instruments; (c) all
indebtedness, liabilities and obligations of such Person to pay the deferred
purchase price of Property or services, except trade accounts payable of such
Person arising in the ordinary course of business that are not past due by more
than 90 days; (d) all Capital Lease Obligations of such Person; (e) all Debt of
others Guaranteed by such Person; (f) all indebtedness, liabilities and
obligations secured by a Lien existing on Property owned by such Person,
whether or not the indebtedness, liabilities or obligations secured thereby
have been assumed by such Person or are non-recourse to such Person; (g) all
reimbursement obligations of such Person (whether contingent or otherwise) in
respect of letters of credit, bankers' acceptances, surety or other bonds and
similar instruments; (h) all indebtedness, liabilities and obligations of such
Person to redeem or retire shares of Capital Stock of such Person; (i) all
indebtedness, liabilities and obligations of such Person under interest rate
protection or hedge agreements; and (j) if and to the extent (but only if and
to the extent) that the following are classified as indebtedness in accordance
with GAAP, all indebtedness, liabilities and obligations of such Person in
respect of unfunded vested benefits under any pension plans.
"Default" means an Event of Default or the occurrence of an event or
condition which
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with notice or lapse of time or both would become an Event of Default.
"Default Rate" means, in respect of any principal of any Loan at all
times during which any Event of Default has occurred and is continuing or in
respect of any other amount payable by the Borrower under this Agreement or any
other Loan Document which is not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period of such Event of
Default or during the period commencing on the due date of such other amount
until such other amount is paid in full equal to the lesser of (a) the sum of
two percent (2.00%) plus the Base Rate as in effect from time to time plus the
Applicable Margin for Base Rate Loans or (b) the Maximum Rate; provided,
however, that, if and to the extent that such Event of Default consists of the
failure to pay any principal of a Eurodollar Loan and the due date is a day
other than the last day of an Interest Period therefor, the "Default Rate" for
such principal shall be, for the period from and including the due date and to
but excluding the last day of the Interest Period therefor, the lesser of the
rate per annum equal to (i) the sum of two percent (2.00%) plus the interest
rate for such Eurodollar Loan for such Interest Period as provided in clause
(ii) of Section 2.4(a) hereof or (ii) the Maximum Rate and, thereafter, the
rate provided for above in this definition.
"Defined Benefit Plan" means an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) that is subject to the minimum funding
requirements of Section 302 of ERISA or Section 412 of the Code or Title IV of
ERISA (including any Multiemployer Plan).
"Dollars" and "$" mean lawful money of the U.S.
"EBITDA" means, as to any Person and its Consolidated Subsidiaries and
for any period, without duplication, the sum of the following for such Persons
for such period determined on a consolidated basis in accordance with GAAP: (a)
Adjusted Net Income, plus (b) Consolidated Interest Expense, plus (c) income
and franchise taxes to the extent deducted in determining Adjusted Net Income,
plus (d) depreciation and amortization expense and other non-cash, non-tax
items to the extent deducted in determining Adjusted Net Income, minus (e)
non-cash income (or losses) to the extent included in determining Adjusted Net
Income.
"Eligible Assignee" means (a) any Lender or Affiliate of a Lender, (b)
any commercial bank, savings and loan association, savings bank, finance
company, insurance company, pension fund, fund or other financial institution
(whether a corporation, partnership, limited liability company or other entity)
which has been approved by the Administrative Agent as a Lender under this
Agreement, or (c) any Approved Fund; provided, however, that (i) Eligible
Assignee shall not include any Affiliate of the Borrower and (ii) Eligible
Assignee shall not include any business competitor of Holdings, the Borrower or
any Subsidiary of Holdings or the Borrower engaged in the same line of business
as the Borrower except after the occurrence and during the continuance of an
Event of Default which has remained in effect for ten or more Business Days.
"Environmental Law" means any federal, state, provincial, local
or foreign law, statute, code or ordinance, principle of common law, rule or
regulation, as well as any Permit, order, decree, judgment or injunction
issued, promulgated, approved or entered thereunder, relating to pollution or
the protection, cleanup or restoration of the environment or natural resources,
or otherwise governing the generation, use, handling, collection, treatment,
storage, transportation, recovery, recycling, discharge or disposal of
Hazardous Materials, including, without limitation
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as to U.S. laws, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. ' 9601 et seq., the Superfund Amendment and
Reauthorization Act of 1986, 99-499, 100 Stat. 1613, the Resource Conservation
and Recovery Act of 1976, 42 U. S. C. ' 6901 et seq., the Clean Air Act, 42
U.S.C. ' 7401 et seq., the Clean Water Act, 33 U. S. C. ' 1251 et seq., the
Emergency Planning and Community Right to Know Act, 42 U. S. C. ' 11001 et
seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. ' 136 et
seq., and the Toxic Substances Control Act, 15 U.S.C. ' 2601 et seq., and any
state or local counterparts.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements and expenses of counsel,
expert and consulting fees and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability or criminal, penal or civil statute, including,
without limitation, any Environmental Law, Permit, order or agreement with any
Governmental Authority or other Person, arising from environmental conditions
or the Release or threatened Release of a Hazardous Material into the
environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is
a member of a group of entities, organizations or employers of which a Loan
Party is also a member and which is treated as a single employer within the
meaning of Sections 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" means Loans that bear interest at rates based upon
the Eurodollar Rate or the Adjusted Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars in the approximate
amount of the proposed Eurodollar Loan at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period for a
term comparable to such Interest Period. If such rate ceases to be available
from Telerate News Service, the Eurodollar Rate shall be determined by the
Administrative Agent in good faith from another financial reporting service,
which service shall be reasonably acceptable to the Borrower.
"Event of Default" has the meaning specified in Section 11.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act), and the rules and regulations thereunder (or respective
successors thereto).
"Exchange Offer" means the offer by Holdings to exchange Holdings
Senior Notes for Holdings Exchange Senior Notes in accordance with Exchange
Offer and Consent Solicitation -- Outstanding 10 1/2% Series B Senior Notes Due
2008 of FaciliCom International, Inc. exchanged for 13.25% Senior Notes Due
2008 and Common Stock of World Access and Cash, as described in the Amendment
No. 1 to Form S-4 Registration Statement under The Securities
CREDIT AGREEMENT - Page 14
15
Act of 1933 as filed on November 5, 1999 by World Access with the Securities
and Exchange Commission, a copy of which has been provided to the
Administrative Agent.
"Excluded Taxes" means, with respect to the Administrative Agent or
any Lender, (a) Taxes imposed on or measured by such Person's net income or net
profits and (b) franchise Taxes imposed on such Person, in each case pursuant
to the laws of the jurisdiction in which such Person is organized or the
jurisdiction in which the principal office or Applicable Lending Office of such
Person is located or any subdivision thereof or therein.
"FCC" means the Federal Communications Commission and any successor
agency.
"FCC Licenses" means all Licenses issued by the FCC.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of
1%)) equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day and (b) if
such rate is not so published on such next succeeding Business Day, the Federal
Funds Rate for any day shall be the average rate which would be charged to the
Reference Bank on such day on such transactions as determined by the
Administrative Agent.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants and/or in statements
of the Financial Accounting Standards Board and/or their respective successors
and which are applicable in the circumstances as of the date in question.
Accounting principles are applied on a "consistent basis" when the accounting
principles applied in a current period are comparable in all material respects
to those accounting principles applied in a preceding period.
"Governmental Authority" means any nation or government, any state,
provincial or political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Governmental Requirement" means any law, statute, code, ordinance,
order, rule, regulation, judgment, decree, injunction, franchise, Permit,
certificate, License, authorization or other directive or requirement of any
federal, state, county, municipal, parish, provincial or other Governmental
Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.
"Gross Revenues" means, as to the Borrower and its Consolidated
Subsidiaries and for any period, gross revenues of such Persons determined on a
consolidated basis in accordance with GAAP.
"Gross Up Lender" means any Lender which requests a payment from the
Borrower
CREDIT AGREEMENT - Page 15
16
pursuant to Section 3.5, 4.1 or 4.6.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any indebtedness, liability or obligation, direct or indirect,
contingent or otherwise, of such Person (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay or
to maintain financial statement conditions or otherwise) or (b) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other indebtedness, liability or obligation as to the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in part),
provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The amount of any Guarantee shall
be deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee is made or, if not stated
or determinable, the maximum anticipated liability in respect thereof (assuming
such Person is required to perform thereunder).
"Guarantors" means Holdings and each other Person (if any) which has
executed a Guaranty, and "Guarantor" means any of such Persons.
"Guaranties" means that certain Guaranty Agreement dated as of the
Closing Date executed by Holdings to and in favor of the Administrative Agent
which guarantees payment of the Obligations and any and all other guaranty
agreements guaranteeing payment or performance of the Obligations in form and
substance satisfactory to the Administrative Agent executed by a Guarantor in
favor of the Administrative Agent and/or the Lenders, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
"Hazardous Material" means any substance, product, liquid, waste,
pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organisms, odor, radiation,
constituent or material which (a) is or becomes listed, regulated or addressed
under any Environmental Law or (b) is, or is deemed to be, alone or in any
combination, hazardous, hazardous waste, toxic, a pollutant, a deleterious
substance, a contaminant or a source of pollution or contamination under any
Environmental Law, including, without limitation, asbestos, petroleum and
polychlorinated biphenyls.
"Holdings" means FaciliCom International, Inc., a Delaware corporation
and, upon and after the consummation of the Holdings Merger (assuming such
merger is consummated), means World Access as the surviving entity in such
merger.
"Holdings Exchange Indenture" means that certain Indenture dated as of
_____ , ______ [UNDATED] between Holdings, as issuer, and First Union National
Bank, as trustee, relating to $300,000,000 of Holdings 13.25% Senior Notes due
2008, as the same may be dated, amended, modified or supplemented from time to
time (provided, however, that, if the term "Holdings Exchange Indenture" is used
herein or in another Loan Document and the context herein or in such other Loan
Document in which such term is used specifically refers to the Holdings Exchange
Indenture as in existence or in effect as of a specific date, then the term
"Holdings Exchange Indenture" as used in such specific context shall mean the
Holdings
CREDIT AGREEMENT - Page 16
17
Exchange Indenture as in existence or in effect as of such specific date
without giving effect to any amendment, modification or supplement thereto
entered into after such specific date).
"Holdings Exchange Senior Notes" means the notes issued, or to be
issued, by World Access pursuant to the Holdings Exchange Indenture, as the
same may be amended, modified or supplemented from time to time (provided,
however, that, if the term "Holdings Exchange Senior Notes" is used herein or
in another Loan Document and the context herein or in such other Loan Document
in which such term is used specifically refers to the Holdings Exchange Senior
Notes as in existence or in effect as of a specific date, then the term
"Holdings Exchange Senior Notes" as used in such specific context shall mean
the Holdings Exchange Senior Notes as in existence or in effect as of such
specific date without giving effect to any amendment, modification or
supplement thereto entered into after such specific date).
"Holdings Exchange Senior Notes Documents" means the Holdings Exchange
Indenture, the Holdings Exchange Senior Notes and any and all other material
agreements, documents or instruments executed and/or delivered by Holdings
pursuant to or in connection with the Holdings Exchange Indenture.
"Holdings Indenture" means that certain Indenture dated as of January
28, 1998 between Holdings, as issuer, and State Street Bank and Trust Company,
as trustee, relating to $300,000,000 of Holdings 10 1/2% Senior Notes due 2008
and 10 1/2% Series B Senior Notes due 2008, as the same may be amended,
modified or supplemented from time to time (provided, however, that, if the
term "Holdings Indenture" is used herein or in another Loan Document and the
context herein or in such other Loan Document in which such term is used
specifically refers to the Holdings Indenture as in existence or in effect as
of a specific date, then the term "Holdings Indenture" as used in such specific
context shall mean the Holdings Indenture as in existence or in effect as of
such specific date without giving effect to any amendment, modification or
supplement thereto entered into after such specific date).
"Holdings Merger" means the merger of FaciliCom International, Inc.
with and into World Access in accordance with the Holdings Merger Agreement;
provided, however, that, for purposes of Section 13.24, referenced herein to
the "Holdings Merger Agreement" shall mean the Holdings Merger Agreement as in
effect on the Closing Date or, if (but only if) such amendment, modification or
supplement is consented to by the Administrative Agent (which consent shall not
be unreasonably withheld, conditioned or delayed), in accordance with the
Holdings Merger Agreement as amended, modified or supplemented after the
Closing Date.
"Holdings Merger Agreement" means that certain Agreement and Plan of
Merger dated as of August 17, 1999, among World Access, FaciliCom
International, Inc., Xxxxxxxxx International Telecommunications, Inc., Epic
Interests, Inc. and BFV Associates, Inc., as the same may be amended, modified
or supplemented from time to time (provided, however, that, if the term
"Holdings Merger Agreement" is used herein or in another Loan Document and the
context herein or in such other Loan Document in which such term is used
specifically refers to the Holdings Merger Agreement as in existence or in
effect as of a specific date, then the term "Holdings Merger Agreement" as used
in such specific context shall mean the Holdings Merger Agreement as in
existence or in effect as of such specific date without giving effect to any
amendment, modification or supplement thereto entered into after such specific
date).
CREDIT AGREEMENT - Page 17
18
"Holdings Senior Notes" means the notes issued, or to be issued, by
Holdings pursuant to the Holdings Indenture, as the same may be amended,
modified or supplemented from time to time (provided, however, that, if the
term "Holdings Senior Notes" is used herein or in another Loan Document and the
context herein or in such other Loan Document in which such term is used
specifically refers to the Holdings Senior Notes as in existence or in effect
as of a specific date, then the term "Holdings Senior Notes" as used in such
specific context shall mean the Holdings Senior Notes as in existence or in
effect as of such specific date without giving effect to any amendment,
modification or supplement thereto entered into after such specific date).
"Holdings Senior Notes Documents" means the Holdings Indenture, the
Holdings Senior Notes and any and all other material agreements, documents or
instruments executed and/or delivered by Holdings pursuant to or in connection
with the Holdings Indenture.
"Insurance Recovery" means, with respect to any Property of the
Borrower or any of its Subsidiaries and any single occurrence or related
occurrences with respect thereto, the receipt or constructive receipt by such
Loan Party, or the payment by an insurance company to the Administrative Agent,
of proceeds of any such Property or casualty insurance.
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including unregistered names and marks), trademark
and service xxxx registrations and applications, copyrights and copyright
registrations and applications, inventions, invention disclosures, protected
formulae, formulations, processes, methods, trade secrets, computer software,
computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings or royalty rights.
"Interest Period" means, with respect to any Eurodollar Loan, each
period commencing on the date such Loan is made or Converted from a Base Rate
Loan or (if Continued) the last day of the next preceding Interest Period with
respect to such Loan, and ending on the numerically corresponding day in the
first, second, third or sixth calendar month thereafter, as the Borrower may
select as provided in Section 2.9 hereof, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (a) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, if such succeeding Business Day falls
in the next succeeding calendar month, on the next preceding Business Day); (b)
any Interest Period which would otherwise extend beyond the Maturity Date shall
end on the Maturity Date; (c) no more than five Interest Periods for Eurodollar
Loans shall be in effect at the same time; (d) no Interest Period shall have a
duration of less than one month and, if the Interest Period for any Eurodollar
Loans would otherwise be a shorter period, such Loans shall not be available
hereunder; and (e) no Interest Period for a Loan may commence before, and end
after, any principal payment date unless, after giving effect thereto, the
aggregate principal amount of the Eurodollar Loans having Interest Periods that
end after such principal payment date shall be equal to or less than the amount
of the applicable Loans scheduled to be outstanding hereunder after such
principal payment date.
CREDIT AGREEMENT - Page 18
19
"Lender" and "Lenders" means as specified in the initial paragraph of
this Agreement.
"License" means any permit, certificate, approval, order, license or
other authorization, including, without limitation, any FCC License.
"Lien" means, with respect to any Property, any mortgage or deed of
trust, pledge, hypothecation, assignment, deposit arrangement, security
interest, tax lien, financing statement, pledge, charge, hypothecation or other
lien, charge, easement (other than any easement not materially impairing
usefulness), encumbrance, preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property (including, without limitation, any conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing).
"Loan Documents" means this Agreement, the Notes, the Security
Documents and all other agreements, documents, instruments and certificates now
or hereafter executed and/or delivered pursuant to or in connection with any of
the foregoing, and any and all amendments, modifications, supplements,
renewals, extensions or restatements thereof.
"Loan Party" means the Borrower, Holdings, any Guarantor or any Person
who grants a Lien on any Property to secure the payment or performance of the
Obligations or any portion thereof, and "Loan Parties" means all of such
Persons.
"Loans" means as specified in Section 2.1(a).
"Master Purchase Agreement" means any one or more of that certain
Global Network Products Purchase Agreement No. FC19701G dated July 24, 1997, by
and between the Borrower and Nortel Networks (f/k/a Northern Telecom Inc.), as
amended and restated by that certain First Amended and Restated Global Network
Products Purchase Agreement dated as of January 1, 1998, by and between the
Borrower and Nortel Networks (f/k/a Northern Telecom Inc.), as either of the
foregoing agreements has been or may be amended, supplemented or restated from
time to time, together with any and all predecessor agreements to the aforesaid
agreement dated July 24, 1997 relating to the purchase of Nortel Networks
Equipment.
"Material Adverse Effect" means any material adverse effect (no matter
how or why existing, caused, resulting or occurring) on (a) the business,
assets, financial condition, results of operations of Holdings and its
Subsidiaries taken as a whole, (b) the business, assets, financial condition,
results of operations of the Borrower individually or of the Borrower and its
Subsidiaries taken as a whole, (c) the validity or enforceability of any of the
Loan Documents or the rights and remedies of the Administrative Agent and/or
the Lenders thereunder, or (d) the ability of any Loan Party to pay and perform
its indebtedness, liabilities and/or obligations under any of the Loan
Documents.
"Material Contracts" means, as to any Loan Party, any supply,
purchase, service, employment, tax, indemnity, shareholder or other agreement
or contract for which the aggregate amount or value of services performed or to
be performed for or by, or funds or other Property transferred or to be
transferred to or by, any Loan Party to such agreement or contract, or by which
any Loan Party or any of its Properties is otherwise bound, during any fiscal
year of such Loan Party exceeds $1,000,000 (or the equivalent amount in any
currency) and any and all amendments, modifications, supplements, renewals or
restatements thereof.
CREDIT AGREEMENT - Page 19
20
"Maturity Date" means December 29, 2000.
"Maximum Rate" means, with respect to any Lender, the maximum
non-usurious interest rate or an amount computed in reference to such rate (as
applicable), if any, that any time or from time to time may be contracted for,
taken, reserved, charged or received with respect to the particular Obligations
as to which such rate is to be determined, payable to such Lender pursuant to
this Agreement or any other Loan Document, under laws applicable to such Lender
which are presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow a higher
maximum non-usurious interest rate than applicable laws now allow. The Maximum
Rate shall be calculated in a manner that takes into account any and all fees,
payments and other charges in respect of the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate.
"Minutes of Use" means minutes billed by the Borrower and/or any of
its Subsidiaries to any third party for termination of domestic or
international telecommunications traffic.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are required
from the Borrower or any ERISA Affiliate since 1974 and which is covered by
Title IV of ERISA.
"Net Proceeds" means, with respect to any Asset Disposition, (a) the
gross amount of cash received by the Borrower from such Asset Disposition,
minus (b) the amount, if any, of all taxes paid or payable by the Borrower
directly resulting from such Asset Disposition (including the amount, if any,
estimated by the Borrower in good faith at the time of such Asset Disposition
for taxes payable by the Borrower on or measured by net income or gain
resulting from such Asset Disposition), minus (c) the reasonable out-of-pocket
costs and expenses incurred by the Borrower in connection with such Asset
Disposition (including reasonable brokerage fees paid to a Person other than an
Affiliate of the Borrower) excluding any fees or expenses paid to an Affiliate
of the Borrower. "Net Proceeds" with respect to any Asset Disposition shall
also include proceeds (after deducting any amounts specified in clauses (b),
(c) and (d) of the preceding sentence) of insurance with respect to any actual
or constructive loss of Property, an agreed or compromised loss of Property or
the taking of any Property under the power of eminent domain and condemnation
awards and awards in lieu of condemnation for the taking of Property under the
power of eminent domain.
"Network" means the Borrower's integrated communications network for
the provision of high speed data and voice services as described in the
Business Plan.
"Nortel Networks" means Nortel Networks Inc., a Delaware corporation.
"Nortel Networks Equipment" means as such term is defined in the
Borrower Security Agreement.
"Nortel Networks Goods and Services" means sales, installation and
commissioning of Nortel Networks Equipment and related software, and project
management, system design and
CREDIT AGREEMENT - Page 20
21
services performed by Nortel Networks personnel.
"Nortel Networks Software" means any and all software sold or licensed
by Nortel Networks or Nortel Networks Corporation or any Subsidiary or
Affiliate of Nortel Networks Corporation to the Borrower or any other Loan
Party, including, without limitation, all source code and object code and all
manuals and other documentation relating thereto and each copy thereof
regardless of the media in which they are stored.
"Notes" means the promissory notes in the form of Exhibit B hereto
made by the Borrower evidencing the Loans and any and all amendments,
modifications, supplements, renewals, extensions or restatements thereof and
all substitutions therefor (including promissory notes issued by the Borrower
pursuant to Section 13.8), and "Note" means any of such promissory notes.
"Notice of Borrowing" means as specified in Section 2.9.
"Obligations" means any and all indebtedness, liabilities and
obligations of the Borrower or any other Loan Party to the Administrative Agent
and the Lenders, or any of them, evidenced by and/or arising pursuant to any of
the Loan Documents (including, without limitation, this Agreement and the
Notes), now existing or hereafter arising, whether direct, indirect, fixed,
contingent, liquidated, unliquidated, joint, several or joint and several,
including, without limitation, (a) the obligations of the Borrower or any
Guarantor to repay the Loans, to pay interest on the Loans (including, without
limitation, interest accruing after any, if any, bankruptcy, insolvency,
reorganization or other similar filing) and to pay all fees, indemnities, costs
and expenses (including attorneys' fees) payable in accordance with the Loan
Documents and (b) the indebtedness constituting the Loans and such interest,
fees, indemnities, costs and expenses.
"Other Taxes" means all Taxes other than Excluded Taxes.
"Payor" means as specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject to the
funding requirements under Section 302 of ERISA or Section 412 of the Code, in
whole or in part, and which is maintained or contributed to currently or at any
time within the six years immediately preceding the Closing Date or, in the
case of a Multiemployer Plan, at any time since September 2, 1974, by any
Borrower or any ERISA Affiliate for employees of any Borrower or any ERISA
Affiliate.
"Permit" means any permit, certificate, approval, order, License,
right-of-way (whether an easement, contract or agreement in any form) or other
authorization.
"Permitted Liens" mean:
(a) Liens for taxes, assessments, governmental charges or
claims that are
CREDIT AGREEMENT - Page 21
22
being contested in good faith by appropriate legal proceedings promptly
instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made;
(b) statutory Liens of landlords and carriers, warehousemen,
mechanics, suppliers, materialmen, repairmen or other similar Liens
arising in the ordinary course of business and with respect to amounts
not yet delinquent or being contested in good faith by appropriate
legal proceedings promptly instituted and diligently conducted and for
which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security;
(d) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory or regulatory obligations,
bankers' acceptances, surety and appeal bonds, government contracts,
performance and return-of-money bonds and other obligations of a
similar nature incurred in the ordinary course of business (exclusive
of obligations for the payment of borrowed money);
(e) easements, rights-of-way, municipal and zoning ordinances
and similar charges, encumbrances, title defects or other
irregularities that do not materially interfere with the ordinary
course of business of the Borrower or any of its Subsidiaries;
(f) Liens (including extensions and renewals thereof) upon
real or personal property purchased or leased after January 28, 1998,
provided that (i) such Lien is created solely for the purpose of
securing Debt incurred in compliance with Section 1011 of the Holdings
Indenture or the Holdings Exchange Indenture to finance the cost
(including the cost of design, development, construction, acquisition,
installation or integration) of the item of property or assets subject
thereto and such Lien is created prior to, at the time of or within
six months after the later of the acquisition, the completion of
construction or the commencement of full operation of such property or
to refinance any Debt previously so secured, (ii) the principal amount
of the Debt secured by such Lien does not exceed 100% of such cost and
(iii) any such Lien shall not extend to or cover any property or
assets other than such item of property or assets and any improvements
on such item;
(g) leases or subleases granted to others that do not
materially interfere with the ordinary course of business of the
Borrower and its Subsidiaries, taken as a whole;
(h) Liens encumbering property or assets under construction
arising from progress or partial payments by a customer of the
Borrower or its Subsidiaries relating to such property or assets;
(i) any interest or title of a lessor in the property subject
to any Capitalized Lease Obligation or operating lease;
(j) Liens arising from filing UCC financing statements
regarding leases;
CREDIT AGREEMENT - Page 22
23
(k) Liens on property of, or on shares of stock or Debt of,
any corporation existing at the time such corporation becomes, or
becomes a part of, any Subsidiary, provided that such Liens do not
extend to or cover any property or assets of the Borrower or any
Subsidiary other than the property or assets acquired and were not
created in contemplation of such transaction;
(l) Liens in favor of the Borrower or any Subsidiary;
(m) Liens arising from the rendering of a final judgment or
order against the Borrower or any Subsidiary of the Borrower that does
not give rise to an Event of Default;
(n) Liens securing reimbursement obligations with respect to
letters of credit that encumber documents and other property relating
to such letters of credit and the products and proceeds thereof;
(o) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(p) Liens encumbering customary initial deposits and margin
deposits and other Liens that are either within the general parameters
customary in the industry or incurred in the ordinary course of
business, in each case, securing Debt under interest rate agreements
and currency hedge agreements;
(q) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into
by the Borrower or any of its Subsidiaries in the ordinary course of
business in accordance with the past practices of the Borrower and its
Subsidiaries prior to the Closing Date;
(r) Liens existing on January 28, 1998 or securing the
Holdings Senior Notes or the Holdings Exchange Senior Notes or any
guaranty of the Holdings Senior Notes or the Holdings Exchange Senior
Notes;
(s) Liens granted after the Closing Date on any assets, other
than the Collateral, or Capital Stock of the Borrower or its
Subsidiaries created in favor of the holders of the Holdings Senior
Notes or the Holdings Exchange Senior Notes;
(t) Liens securing Debt which is incurred to refinance
secured Debt which is permitted to be incurred under clause (viii) of
paragraph (b) of Section 1011 of the Holdings Indenture or the
Holdings Exchange Indenture, provided that such Liens do not extend to
or cover any property or assets of the Borrower or any Subsidiary of
the Borrower other than the property or assets securing the Debt being
refinanced;
(u) Liens securing Debt under credit facilities incurred in
compliance with clause (iv) of paragraph (b) of Section 1011 of the
Holdings Indenture or the Holdings Exchange Indenture;
(v) Liens granted by the Borrower to and in favor of Key
Corporate Capital
CREDIT AGREEMENT - Page 23
24
Inc. attaching to the following Properties of the Borrower and related
Properties as more specifically described in the Receivables Financing
Documents as in effect on the Closing Date: (i) all accounts, contract
rights and other rights to receive payment for the provision of
telecommunications services which have a situs in the U.S., other than
the foregoing owing to the Borrower by any of its Subsidiaries (the
"Receivables"), (ii) all proceeds, products, income and profits of any
of the Receivables and the proceeds of any such proceeds, products,
income and profits, and (iii) all right, title and interest of the
Borrower in or to all instruments and documents covering or relating
to the Receivables; and
(w) Liens securing the Obligations in favor of the
Administrative Agent (for the benefit of the Administrative Agent and
the Lenders) pursuant to the Loan Documents;
provided, however, (A) that none of the Permitted Liens (except those in favor
of the Administrative Agent securing the Obligations) referred to in clauses
(c), (d), (e), (f), (g), (h), (i), (j), (k), (l), (m), (n), (o), (p), (q), (r),
(s), (t), (u) or (v) preceding may attach or relate to any Collateral, and (B)
none of the Permitted Liens (except those in favor of the Administrative Agent
securing the Obligations) may have a priority equal or prior to the Liens in
favor of the Administrative Agent as security for the Obligations.
"Person" means any individual, corporation, trust, association,
company, partnership, joint venture, limited liability company, joint stock
company, Governmental Authority or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of
ERISA established or maintained or contributed to by any Loan Party or any
ERISA Affiliate, including any Pension Plan.
"Principal Office" means the principal office of the Administrative
Agent in Richardson, Texas, presently located at 0000 Xxxxxxxx Xxxx.,
Xxxxxxxxxx, Xxxxx 00000.
"Prior Note" means that certain Promissory Note dated September 30,
1999, in the original principal amount of $21,716,880.38 made by the Borrower
payable to the order of Nortel Networks.
"Prohibited Transaction" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Code.
"Property" means property and assets of all kinds, whether real,
personal or mixed, tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"Quarterly Date" means the last day of each March, June, September and
December of each year, the first of which shall be December 31, 1999.
"Receivables Financing Agreement" means that certain Loan Agreement
dated as of May 24, 1999, by and between the Borrower and Key Corporate Capital
Inc., as the same may be amended, modified or supplemented from time to time
(provided, however, that, if the term "Receivables Financing Agreement" is used
herein or in another Loan Document and the context
CREDIT AGREEMENT - Page 24
25
herein or in such other Loan Document in which such term is used specifically
refers to the Receivables Financing Agreement as in existence or in effect as
of a specific date, then the term "Receivables Financing Agreement" as used in
such specific context shall mean the Receivables Financing Agreement as in
existence or in effect as of such specific date without giving effect to any
amendment, modification or supplement thereto entered into after such specific
date).
"Receivables Financing Documents" means the Receivables Financing
Agreement and any and all agreements, documents and instruments executed and/or
delivered in connection therewith.
"Reference Bank" means Citibank, N.A.
"Register" means as specified in Section 13.8(d).
"Registered Note" means as specified in Section 2.2(b).
"Registered Note Register" means as specified in Section 13.8(h).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Lender, any change
after the Closing Date in any U.S. federal or state or foreign laws or
regulations (including Regulation D) or the adoption or making after such date
of any interpretations, directives, guidelines or requests applying to a class
of lenders including such Lender of or under any U.S. federal or state or
foreign laws or regulations (whether or not having the force of law) by any
Governmental Authority charged with the interpretation or administration
thereof.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, discharge, disposal, dispersement,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment or into or out of Property owned by such Person, including, without
limitation, the movement of Hazardous Materials through or in the air, soil,
surface water or ground water.
"Remedial Action" means all actions required to (a) cleanup, remove,
respond to, treat or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform
post-remedial monitoring, care or remedy of a contaminated site.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA other than any such event for which the 30-day notice
requirement has been waived in regulations issued by the PBGC.
"Required Lenders" means, at any date of determination, Lenders
holding at least two-
CREDIT AGREEMENT - Page 25
26
thirds (in Dollar amount) of the sum of (a) the aggregate outstanding principal
amount of the Loans, plus (b) the aggregate amount of the outstanding
Commitments.
"Required Payment" means as specified in Section 3.4.
"Reserve Requirement" means, for any Eurodollar Loan of any Lender for
any Interest Period therefor, the maximum rate at which reserves (including any
marginal, supplemental or emergency reserves) are required to be maintained
during such Interest Period under any regulations of the Board of Governors of
the Federal Reserve System (or any successor) by such Lender for deposits
exceeding $1,000,000 against "Eurocurrency Liabilities" as such term is used in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
Lenders by reason of any Regulatory Change against (a) any category of
liabilities which includes deposits by reference to which the Eurodollar Rate
or the Adjusted Eurodollar Rate is to be determined or (b) any category of
extensions of credit or other assets which include Eurodollar Loans.
"Responsible Officer" means, as to any Loan Party, the chief executive
officer, the president, any vice president, the chief financial officer, the
chief operating officer or the treasurer of such Person.
"Restricted Payment" means (a) any dividend or other distribution
(whether in cash, Property or obligations), direct or indirect, on account of
(or the setting apart of money for a sinking or other analogous fund for) any
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries
now or hereafter outstanding, except a dividend or other distribution payable
solely in shares of that class of stock to the holders of that class; (b) any
redemption, conversion, exchange, retirement, sinking fund or similar payment,
purchase or other acquisition for value, direct or indirect, of any shares of
any class of Capital Stock of the Borrower or any of its Subsidiaries now or
hereafter outstanding; (c) any payment or prepayment of principal of, premium,
if any, or interest on, or any redemption, conversion, exchange, purchase,
retirement or defeasance of, or payment with respect to, any Subordinated Debt;
(d) any loan, advance or payment to any officer, director or shareholder of the
Borrower or any of its Subsidiaries (other than a shareholder consisting of the
Borrower or a Wholly-Owned Subsidiary of the Borrower), exclusive of reasonable
compensation paid to officers or directors paid in the ordinary course of
business and exclusive of payments made for goods sold or services rendered
which comply with Section 9.7; and (e) any payment made to retire, or to obtain
the surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of Capital Stock of the Borrower or any of its Subsidiaries
now or hereafter outstanding; provided, however, that, for purposes of clause
(d) preceding, any payments of principal and/or interest with respect to any
Debt owed or owing by the Borrower to Holdings shall not be deemed to be
Restricted Payments.
"Revolving Period" means the period commencing on the Closing Date and
ending on the Commitment Termination Date.
"Security Agreements" means the Borrower Security Agreement and any
and all other security agreements and other agreements, documents or
instruments evidencing or creating a Lien as security for the Obligations or
any portion thereof in form and substance reasonably satisfactory to the
Administrative Agent executed by any Loan Party, in favor of the Administrative
Agent for the benefit of the Administrative Agent and the Lenders, and any such
CREDIT AGREEMENT - Page 26
27
agreement, document or instrument subsequently executed in accordance or
connection with this Agreement or any other Loan Document, and any and all
amendments, modifications, supplements, renewals, extensions or restatements
thereof.
"Security Documents" means the Security Agreements and the Guaranties
and any and all other security agreements, guaranties and other agreements,
documents, instruments and financing statements now or hereafter executed
and/or delivered by any Person, as they may be amended, modified, supplemented,
renewed, extended or restated from time to time, as security or assurance for
the payment or performance of the Obligations or any part thereof.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to,
and does not believe that it will, incur debts or liabilities beyond such
Person's ability to pay as such debts and liabilities mature, and (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's Property would constitute
unreasonably small capital after giving due consideration to current and
anticipated future capital requirements and current and anticipated future
business conduct and the prevailing practice in the industry in which such
Person is engaged. In computing the amount of contingent liabilities at any
time, such liabilities shall be computed at the amount which, in light of the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Subordinated Debt" means Debt of the Borrower which is contractually
subordinated, in whole or in part, to the payment of the Obligations or any
portion thereof.
"Subordinated Debt Documents" means any and all other agreements,
documents and instruments now or hereafter evidencing or governing any
Subordinated Debt.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which at least a majority of the outstanding shares of stock or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors (or Persons performing similar
functions) of such corporation or entity (irrespective of whether or not at the
time, in the case of a corporation, stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more of its Subsidiaries or by such Person and one or
more of its Subsidiaries.
"Taxes" means any and all present or future taxes, levies, duties,
imposts, assessments or other charges at any time assessed, levied, imposed or
charged by any Governmental Authority.
"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and Properties, whether tangible or intangible, used or intended for
use in connection with a
CREDIT AGREEMENT - Page 27
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Telecommunications Business.
"Telecommunications Business" means the business of (a) transmitting,
or providing services relating to the transmission of, voice, data or video
through owned or leased transmission facilities, (b) constructing, creating,
developing or marketing communications related network equipment, software and
other devices for use in a telecommunications business or (c) evaluating,
participating or pursuing any other activity or opportunity that is primarily
related to those referred to in clause (a) or (b) preceding.
"Type" means any type of Loan (i.e., a Base Rate Loan or Eurodollar
Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of
New York and/or any other jurisdiction, the laws of which may be applicable to
or in connection with the creation, perfection or priority of any Lien on any
Property created pursuant to any Security Document.
"U.S." means the United States of America.
"U.S. Nortel Networks Equipment" means as such term is defined in the
Borrower Security Agreement.
"U.S. Person" means a citizen or resident of the U.S., a
corporation, partnership, limited liability company or other entity created or
organized in or under any laws of the U.S. or any estate or trust that is
subject to U.S. Federal income taxation regardless of the source of its income.
"U.S. Taxes" means any Taxes imposed by or on behalf of the U.S.
or any State of the U.S. or the District of Columbia or any taxing authority or
other Governmental Authority of any of the foregoing.
"Vendor" means Nortel Networks in its capacity as vendor under the
Master Purchase Agreement.
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors, managers or general
partners (or persons performing similar functions) of such Person, whether at
all times or only for so long as no senior class of securities has such voting
power by reason of any contingency.
"Wholly-Owned Subsidiary" means, with respect to any Person, a
Subsidiary of such Person all of whose outstanding Capital Stock (other than
directors' qualifying shares, if any) shall at the time be owned by such Person
and/or one or more of its Wholly-Owned Subsidiaries; provided, however, that a
Subsidiary of the Borrower which would be a Wholly-Owned Subsidiary of the
Borrower but for the ownership of one percent (1.00%) or less of the Capital
Stock of such Subsidiary by a Subsidiary of Holdings (or, in the case of
FaciliCom International Sweden AB, by an unrelated entity) shall be deemed to
constitute a Wholly-Owned Subsidiary of the Borrower.
"World Access" means World Access, Inc., a Delaware corporation.
CREDIT AGREEMENT - Page 28
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"Year 2000 Compliant" means that (a) the services, products or other
item(s) at issue accurately process, provide and/or receive all date/time data
(including calculating, comparing, sequencing, processing and outputting)
within, from, into and between centuries (including the twentieth and
twenty-first centuries and the years 1999 and 2000), including leap year
calculations, and (b) neither the performance nor the functionality nor the
business' provision of the services, products and other item(s) at issue will
be affected by any dates/times prior to, on, after or spanning January 1, 2000.
The design of the services, products and other item(s) at issue to ensure
compliance with the "year 2000" representations and warranties and covenants
contained in this Agreement includes proper date/time data century recognition
and recognition of 1999 and 2000, calculations that accommodate single century
and multi-century formulae and date/time values before, on, after and spanning
January 1, 2000, and date/time data interface values that reflect the century,
1999 and 2000. In particular, but without limitation, such design means that
(i) no value for current date/time will cause any error, interruption or
decreased performance in or for such services, products and other item(s), (ii)
all manipulations of date and time related data (including calculating,
comparing, sequencing processing and outputting) will produce correct results
for all valid dates and times when used independently or in combination with
other services, products and/or items, (iii) date/time elements in interfaces
and data storage will specify the century to eliminate date ambiguity without
human intervention, including leap year calculations, (iv) where any date/time
element is represented without a century, the correct century will be
unambiguous for all manipulations involving that element, (v) authorization
codes, passwords and zaps (purge functions) will function normally and in the
same manner during, prior to, on and after January 1, 2000, including the
manner in which they function with respect to expiration dates and CPU serial
numbers, and (vi) the business' supply of the services, products and other
item(s) will not be interrupted, delayed, decreased or otherwise affected by
the advent of the year 2000.
Section 1.2 Other Definitional Provisions. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of
the terms defined. The words "hereof", "herein" and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. The term "continuing",
"continuation" or "continuance" means, in reference to any Default or Event of
Default that has occurred, that such Default or Event of Default has not been
either cured to the reasonable satisfaction of the Administrative Agent within
the applicable grace period (if any) specified in this Agreement or the other
Loan Documents (as applicable) or waived in writing by the requisite Lenders in
accordance with Section 13.11. Unless otherwise specified, all Article and
Section references pertain to this Agreement. Terms used herein that are
defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC. All references in this Agreement to any agreement shall
be deemed to mean and refer to such agreement as it may be amended, modified or
supplemented from time to time if (but only if) such amendment, modification or
supplement has been approved by the Administrative Agent and the Required
Lenders, is expressly referred to in such reference or is otherwise expressly
permitted by the terms of this Agreement.
Section 1.3 Accounting Terms and Determinations.
(a) Except as may be expressly provided herein to the contrary,
(i) all accounting terms (whether or not specifically defined herein) shall be
construed in accordance with GAAP (subject to year end adjustments, if
applicable) consistent with such accounting principles
CREDIT AGREEMENT - Page 29
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applied in the preparation of the audited financial statements referred to in
Section 7.2(a), (ii) all financial information delivered to the Administrative
Agent pursuant to Section 8.1 shall be prepared in accordance with GAAP
(subject to year end adjustments, if applicable) applied on a basis consistent
with such accounting principles applied in the preparation of the audited
financial statements of the applicable Person referred to in Section 7.2 or in
accordance with Section 8.7, and (iii) with respect to accounting terms or
financial information defined or described in reference to a Person and its
Consolidated Subsidiaries, all such terms and information shall be construed as
applying to such Person and its Consolidated Subsidiaries on a consolidated
basis in accordance with GAAP.
(b) The Borrower shall deliver to the Administrative Agent and the
Lenders, at the same time as the delivery of any annual or quarterly financial
statement under Section 8.1, (i) a description, in reasonable detail, of any
material variation between the application of GAAP employed in the preparation
of the next preceding annual or quarterly financial statements prepared in
accordance with Section 1.3(a) preceding as to which no reasonable objection
has been made by the Administrative Agent and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in this Agreement, the Borrower will not change
the last day of its fiscal year from September 30 or the last days of the first
three fiscal quarters of the Borrower in each of its fiscal years from December
31, March 31 and June 30, respectively; provided, however, that, after
consummation of the Holdings Merger, the Borrower may change the last day of
its fiscal year to December 31st and the last days of the first three fiscal
quarters of the Borrower to March 31, June 30 and September 30, respectively.
(d) Unless otherwise expressly provided herein to the contrary,
all references herein to the Closing Date shall be deemed to mean and refer to
the Closing Date after giving effect to all transactions which occur on or
before such date.
Section 1.4 Financial Covenants and Reporting. All financial
statements and reports required to be delivered pursuant to this Agreement and
the other Loan Documents, and all financial covenants (if any) contained in
this Agreement, shall be prepared or determined (as applicable) in accordance
with GAAP (except as may be expressly provided to the contrary herein) and, if
and to the extent that such statements, reports or covenants are to be prepared
or determined on a consolidated basis, shall be prepared or determined on a
consolidated basis for the Borrower and its Consolidated Subsidiaries except as
may be expressly provided to the contrary herein.
ARTICLE 2
Loans
Section 2.1 Commitments.
(a) Loans. Subject to the terms and conditions of this Agreement
(including, without limitation, Section 2.12(a)), each Lender severally agrees
to make one or more loans to the Borrower from time to time from and including
the Closing Date to but excluding the Commitment Termination Date up to but not
exceeding the amount of such Lender's
CREDIT AGREEMENT - Page 30
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Commitment as then in effect. (Such loans referred to in this Section 2.1(a)
now or hereafter made by the Lenders to the Borrower, including, without
limitation, such loans which remain outstanding after the Commitment
Termination Date, are hereinafter collectively called the "Loans".) Subject to
the foregoing limitations and the other terms and conditions of this Agreement,
the Borrower may borrow, repay and reborrow the Loans hereunder during (but not
after) the Revolving Period.
(b) Continuation and Conversion of Loans. Subject to the terms
and conditions of this Agreement, the Borrower may borrow the Loans as Base
Rate Loans or Eurodollar Loans and, until the Maturity Date, the Borrower may
Continue Eurodollar Loans or Convert Loans of one Type into Loans of the other
Type.
(c) Lending Offices. Loans of each Type made by each Lender shall
be made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
Section 2.2 Notes.
(a) Notes. The Loans made by each Lender shall be evidenced by a
single promissory note of the Borrower in substantially the form of Exhibit B
hereto dated the Closing Date (or such later date on which such Lender becomes
a party to this Agreement), payable to the order of such Lender in a principal
amount equal to the Commitment of such Lender and otherwise duly completed.
Each Lender is hereby authorized by the Borrower to endorse on the schedule (or
a continuation thereof) attached to the Note of such Lender, to the extent
applicable, the date, amount and Type of and the Interest Period for each Loan
made by such Lender to the Borrower and the amount of each payment or
prepayment of principal of such Loan received by such Lender, provided that any
failure by such Lender to make any such endorsement shall not affect the
obligations of the Borrower under any such Note or this Agreement in respect of
any such Loan.
(b) Registered Notes. Any Lender that is not a U.S. Person and
that could become completely exempt from withholding of U.S. Taxes in respect
of payment of any Obligations due to such Lender hereunder relating to any of
its Loans if such Loans were in registered form for U.S. Federal income tax
purposes may request the Borrower (through the Administrative Agent), and the
Borrower agrees thereupon, to exchange such Lender's Note evidencing its Loans
for a promissory note registered as provided in Section 13.8(h) hereof (a
"Registered Note"). Registered Notes may not be exchanged for Notes that are
not in registered form.
Section 2.3 Repayment of Loans. The Borrower shall pay to the
Administrative Agent for the account of each Lender all outstanding principal
of the Loans (and all outstanding principal of the Loans shall be due and
payable in full) on the Maturity Date.
Section 2.4 Interest.
(a) Interest Rate. The Borrower shall pay to the Administrative
Agent for the account of each Lender interest on the unpaid principal amount of
each Loan made by such Lender (or deemed made by such Lender with respect to a
Loan assigned to such Lender after the making of such Loan) to the Borrower for
the period commencing on the date of such Loan to, but excluding, the date such
Loan shall be paid in full, at the following rates per annum:
CREDIT AGREEMENT - Page 31
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(i) during the periods such Loan is a Base Rate Loan, the
lesser of (A) the Base Rate plus the Applicable Margin or (B) the
Maximum Rate; and
(ii) during the periods such Loan is a Eurodollar Loan, the
lesser of (A) the Adjusted Eurodollar Rate plus the Applicable Margin
or (B) the Maximum Rate.
(b) Payment Dates. Accrued interest on the Loans shall be due and
payable as follows:
(i) in the case of Base Rate Loans, on each Quarterly Date;
(ii) in the case of each Eurodollar Loan, on the last day of
the Interest Period with respect thereto and, in the case of an
Interest Period greater than three months, at three-month intervals
after the first day of such Interest Period;
(iii) upon the payment or prepayment (whether mandatory or
optional) of any Loan or the Conversion of any Loan to a Loan of the
other Type (but only on the principal amount so paid, prepaid or
Converted); and
(iv) with respect to all Loans, on the Maturity Date.
(c) Default Interest. Notwithstanding the foregoing, the Borrower
shall pay to the Administrative Agent for the account of each Lender interest
at the applicable Default Rate (i) at all times during which any Event of
Default has occurred and is continuing, on any principal of any Loan
outstanding, and (ii) to the fullest extent permitted by law, any other amount
payable by the Borrower under this Agreement or any other Loan Document to or
for the account of such Lender which is not paid in full when due (whether at
stated maturity, by acceleration or otherwise) for the period from and
including the due date thereof to but excluding the date the same is paid in
full. Interest payable at the Default Rate shall be payable from time to time
on demand by the Administrative Agent.
Section 2.5 Borrowing Procedure.
(a) Standard Procedure. Borrower shall give the Administrative
Agent notice of each borrowing hereunder in accordance with Section 2.9. Not
later than 1:00 p.m. (New York, New York time) on the date specified for each
borrowing hereunder, each Lender will make available the amount of the Loan to
be made by it on such date to the Administrative Agent, at the Principal
Office, in immediately available funds, for the account of the Borrower. The
amount of each borrowing hereunder so received by the Administrative Agent
shall, subject to the terms and conditions of this Agreement, be made
available, for and on behalf of the Borrower, in immediately available funds by
no later than 1:00 p.m. (New York, New York time) and shall be advanced
directly to the Vendor. Notwithstanding anything to the contrary contained in
this Agreement, if and to the extent that Nortel Networks is a Lender under
this Agreement, the Borrower further hereby irrevocably agrees that each Loan
to be advanced by Nortel Networks to the Borrower in accordance with this
Agreement may (in the discretion of Nortel Networks and if and to the extent
that the proceeds of such Loan are to be paid to Nortel Networks) be
effectively disbursed on the date set forth in the Notice of Borrowing for such
disbursement to the Borrower by virtue of a credit in the amount of such Loan
given to the
CREDIT AGREEMENT - Page 32
33
Borrower by the Vendor under the Master Purchase Agreement.
(b) Automatic Advancement of Loans at the Election of the
Administrative Agent. Notwithstanding anything to the contrary contained in
this Agreement, the Administrative Agent may, with the prior written consent of
the Required Lenders, cause Loans to be advanced by the Lenders for and on
behalf of the Borrower whether or not (i) any Notice of Borrowing is given in
accordance with Section 2.9, (ii) any of the conditions precedent set forth in
Article 6 hereof are satisfied, (iii) any Default exists, or (iv) any other
fact or circumstance exists, if (A) the Administrative Agent shall have given
five Business Day's prior written notice to the Borrower of the Lenders'
intention to make such Loans and (B) all proceeds of such Loans are used to pay
the purchase price for Nortel Networks Goods and Services which has not been
paid within 45 days after the date of invoice by the Vender therefor and/or to
pay accrued late charges relating to such purchase price in accordance with the
Master Purchase Agreement; provided, however, that the Administrative Agent may
advance Loans to the Borrower on the Closing Date in an amount of up to
$21,716,880.38 without the giving of any prior written notice to the Borrower
of the Lenders' intention to do so, which advance on the Closing Date shall be
used, in part, to pay all principal with respect to the Prior Note. All Loans
advanced pursuant to this Section 2.5(b) shall be advanced as Base Rate Loans
(but, after such advancement, may be Converted to Eurodollar Loans in
accordance with this Agreement). The Borrower irrevocably agrees that it will,
on the Closing Date, execute and deliver to the Administrative Agent a Notice
of Borrowing and thereby request that the Lenders make Loans in the aggregate
amount of $21,716,880.38 to the Borrower on the Closing Date; provided,
however, that, notwithstanding anything to the contrary contained in Section
2.9, such Notice of Borrowing need not be provided to the Administrative Agent
prior to the Closing Date.
Section 2.6 Optional Prepayments, Conversions and Continuations
of Loans. Subject to Section 2.8, the Borrower shall have the right from time
to time to prepay the Loans in whole or in part, to Convert all or part of a
Loan of one Type into a Loan of another Type or to Continue Eurodollar Loans;
provided that: (a) the Borrower shall give the Administrative Agent notice of
each such prepayment, Conversion or Continuation as provided in Section 2.9,
(b) Eurodollar Loans may only be Converted on the last day of the Interest
Period and any prepayment of Eurodollar Loans on any day other than the last
day of the Interest Period shall be subject to payment of the additional
compensation specified in Section 4.5, (c) except for Conversions of Eurodollar
Loans into Base Rate Loans, no Conversions or Continuations shall be made while
an Event of Default has occurred and is continuing, and (d) optional
prepayments of the Loans shall be applied to the principal of the Loans in the
inverse order of the maturities of the then remaining installments (if any) of
such Loans.
Section 2.7 Mandatory Prepayments.
(a) Dispositions of Collateral The Borrower shall, concurrently
with the sale or other disposition of any U.S. Nortel Networks Equipment
constituting Collateral, pay to the Administrative Agent, as a prepayment of
the Loans, an aggregate amount equal to the Net Proceeds of any such sale or
other disposition. (Nothing contained in this Section 2.7(a) shall be deemed to
constitute any authorization to sell or otherwise dispose of any of the
Collateral except in accordance with Section 9.8.)
(b) Application of Mandatory Prepayments. All prepayments pursuant
to Section
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2.7(a) shall be applied to the principal of the Loans in the inverse order of
the maturities of the then remaining installments (if any) of the Loans and
then to the remaining outstanding Obligations in such order as the
Administrative Agent may determine.
(c) No Reborrowing. No amounts of the Loans prepaid pursuant to
this Section 2.7 may be reborrowed.
Section 2.8 Minimum Amounts. Except for Conversions and
prepayments pursuant to Section 2.7 and Article 4, each borrowing, each
Conversion and each optional prepayment of principal of the Loans shall be,
unless otherwise agreed by the Administrative Agent, in an amount at least
equal to $500,000 or an integral multiple of $100,000 in excess thereof
(borrowings, prepayments or Conversions of or into Loans of different Types or,
in the case of Eurodollar Loans, having different Interest Periods at the same
time hereunder shall be deemed separate borrowings, prepayments and Conversions
for purposes of the foregoing, one for each Type or Interest Period); provided,
however, that borrowings in accordance with Section 2.5(b) may be in any
amount.
Section 2.9 Certain Notices. Subject to Section 2.5(b), notices
by the Borrower to the Administrative Agent of terminations or reductions of
Commitments, of borrowings, Conversions, Continuations and prepayments of Loans
and of the duration of Interest Periods shall be irrevocable and shall be
effective only if received by the Administrative Agent not later than 11:00
a.m. (New York, New York, time) on the applicable Business Day prior to the
date of the relevant termination, reduction, borrowing, Conversion,
Continuation or prepayment or the first day of such Interest Period specified
below:
Number of
Notice Business Days Prior
------ -------------------
Terminations or Reductions of Commitments 1
------------------------------------------------------------------------------------------------
Borrowings of Loans which are Base Rate Loans, and Conversions of
Eurodollar Loans into Base Rate Loans 3
------------------------------------------------------------------------------------------------
Borrowings or Continuations of Loans which are Eurodollar Loans,
and Conversions of Base Rate Loans into Eurodollar Loans 3
------------------------------------------------------------------------------------------------
Prepayments of Loans 2
------------------------------------------------------------------------------------------------
Each such notice of termination or reduction shall specify the amount of the
Commitments to be terminated or reduced. Subject to Section 2.5(b), each such
notice of borrowing, Conversion, Continuation or prepayment shall specify the
Loans to be borrowed, Converted, Continued or prepaid and the amount (subject
to Section 2.8 hereof) and Type of the Loans to be borrowed, Converted,
Continued or prepaid (and, in the case of a Conversion, the Type of Loans to
result from such Conversion) and the date of borrowing, Conversion,
Continuation or prepayment (which shall be a Business Day). Subject to Section
2.5(b), each such notice of termination, reduction, borrowing, Conversion,
Continuation or prepayment shall be in the form of Exhibit C
CREDIT AGREEMENT - Page 34
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hereto, appropriately completed as applicable. Each notice of borrowing (a
"Notice of Borrowing") (a) shall certify that all proceeds of the requested
Loans are, concurrently with the making of such Loans, being used by the
Borrower for the purpose specified in Section 2.10 and (b) shall be accompanied
by such other evidence as to use of the proceeds of such borrowing, as the
Administrative Agent may reasonably request from time to time. Subject to
Section 2.5(b), each notice which includes reference to the duration of an
Interest Period shall specify the Loans to which such Interest Period is to
relate. The Administrative Agent shall promptly notify the Lenders of the
contents of each such notice. In the event the Borrower fails to select the
Type of Loan, or the duration of any Interest Period for any Eurodollar Loan,
within the time period and otherwise as provided in this Section 2.9, such Loan
(if outstanding as Eurodollar Loan) will be automatically Converted into a Base
Rate Loan on the last day of preceding Interest Period for such Loan or (if
outstanding as a Base Rate Loan) will remain as, or (if not then outstanding)
will be made as, a Base Rate Loan. The Borrower may not borrow any Eurodollar
Loans, Convert any Loans into Eurodollar Loans or Continue any Loans as
Eurodollar Loans if the interest rate for such Eurodollar Loans would exceed
the Maximum Rate.
Section 2.10 Use of Proceeds.
(a) Loans. The Borrower agrees that all proceeds of the Loans
shall be used (i) to refinance the principal amount of all Debt outstanding
under the Prior Note, (ii) to finance the purchase price for Nortel Networks
Goods and Services provided by the Vendor under the Master Purchase Agreement,
excluding sales and use taxes and freight charges, and (iii) to pay accrued
late charges and/or other amounts payable by the Borrower to the Vendor under
the Master Purchase Agreement.
(b) Margin Stock. None of the proceeds of any Loan may be used to
acquire any security in any transaction that is subject to Section 13 or 14 of
the Exchange Act or to purchase or carry any margin stock (within the meaning
of Regulations T, U or X of the Board of Governors of the Federal Reserve
System).
Section 2.11 Computations. Interest and fees payable by the
Borrower hereunder and under the other Loan Documents on all Loans shall be
computed on the basis of a year of 360 days and the actual number of days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable unless, in the case of interest or fees which
constitute interest (if applicable), such calculation would result in a
usurious rate, in which case interest or fees which constitute interest (if
applicable) shall be calculated on the basis of a year of 365 or 366 days, as
the case may be.
Section 2.12 Termination or Reduction of Commitments.
(a) Subject to Section 2.12(d), each of the Commitments shall
automatically terminate upon the occurrence of any Change in Control.
(b) Subject to Section 2.12(d), the Borrower shall have the right
to terminate or reduce in part the unused portion of the Commitments at any
time and from time to time prior to the Commitment Termination Date; provided,
however, that (i) no such termination or reduction shall be effective unless
the Borrower shall have given notice of each such termination or reduction as
provided in Section 2.9 and (ii) each partial reduction of the Commitments
shall be
CREDIT AGREEMENT - Page 35
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in an aggregate amount at least equal to $500,000 or an integral multiple of
$100,000 in excess thereof.
(c) Subject to Section 2.12(d), the Commitments may not be
reinstated after they have been terminated or increased after they have been
reduced.
(d) Notwithstanding anything to the contrary contained in this
Agreement, without the prior written consent of the Administrative Agent, the
Commitments may not be terminated at any time when Nortel Networks Goods and
Services have been ordered under the Master Purchase Agreement and have not
been fully paid for and the Commitments may not be reduced at any time to an
amount which is less than the aggregate amount that, at such time, the Borrower
may thereafter be required to pay to the Vendor under the Master Purchase
Agreement based upon Nortel Networks Goods and Services which have been ordered
under the Master Purchase Agreement.
ARTICLE 3
Payments
Section 3.1 Method of Payment. All payments of principal,
interest, fees and other amounts to be made by the Borrower under this
Agreement and the other Loan Documents shall be made to the Administrative
Agent at the Principal Office for the account of each Lender's Applicable
Lending Office in Dollars and in immediately available funds, without setoff,
deduction or counterclaim, not later than 1:00 p.m. (New York, New York time)
on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day). The Borrower shall, at the time of making each such
payment, specify to the Administrative Agent the sums payable by the Borrower
under this Agreement and the other Loan Documents to which such payment is to
be applied (and in the event that the Borrower fails to so specify, or if an
Event of Default has occurred and is continuing, the Administrative Agent may
apply such payment to the Obligations in such order and manner as the
Administrative Agent may elect, subject to Section 3.2). Upon the occurrence
and during the continuation of an Event of Default, all proceeds of any
Collateral and all other funds of the Borrower in the possession of the
Administrative Agent or any Lender may be applied by the Administrative Agent
to the Obligations in such order and manner as the Administrative Agent may
elect, subject to Section 3.2. Each payment received by the Administrative
Agent under this Agreement or any other Loan Document for the account of a
Lender shall be paid promptly to such Lender, in immediately available funds,
for the account of such Lender's Applicable Lending Office. Whenever any
payment under this Agreement or any other Loan Document shall be stated to be
due on a day that is not a Business Day, such payment may be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of the payment of interest and commitment fee, as
the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise
provided in this Agreement: (a) each Loan shall be made by the Lenders under
Section 2.1, and each termination or reduction of the Commitments under Section
2.12 shall be applied to the Commitments of the Lenders, pro rata according to
the respective unused Commitments; (b) the making, Conversion and Continuation
of Loans of a particular Type (other than Conversions provided for by Section
CREDIT AGREEMENT - Page 36
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4.4) shall be made pro rata among the Lenders holding Loans of such Type
according to the amounts of their respective Commitments; (c) each payment and
prepayment by the Borrower of principal of or interest on Loans of a particular
Type shall be made to the Administrative Agent for the account of the Lenders
holding Loans of such Type pro rata in accordance with the respective unpaid
principal amounts of such Loans held by such Lenders; and (d) Interest Periods
for Loans of a particular Type shall be allocated among the Lenders holding
Loans of such Type pro rata according to the respective principal amounts held
by such Lenders.
Section 3.3 Sharing of Payments, etc. If a Lender shall obtain
payment of any principal of or interest on any of the Obligations due to such
Lender hereunder through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the Obligations held by the other Lenders
in such amounts, and make such adjustments from time to time, as shall be
equitable to the end that all the Lenders shall share pro rata in accordance
with the unpaid principal and interest on the Obligations then due to each of
them. To such end, all of the Lenders shall make appropriate adjustments among
themselves (by the resale of participations sold or otherwise) if all or any
portion of such excess payment is thereafter rescinded or must otherwise be
restored. The Borrower agrees, to the fullest extent it may effectively do so
under applicable law, that any Lender so purchasing a participation in the
Obligations held by the other Lenders may exercise all rights of setoff,
banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Obligations in
the amount of such participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness, liability or obligation of the Borrower.
Section 3.4 Non-Receipt of Funds by the Administrative Agent.
Unless the Administrative Agent shall have been notified by a Lender or the
Borrower (the "Payor") prior to the date on which such Lender is to make payment
to the Administrative Agent of the proceeds of a Loan to be made by it hereunder
or the Borrower is to make a payment to the Administrative Agent for the account
of one or more of the Lenders, as the case may be (such payment being herein
called the "Required Payment"), which notice shall be effective upon receipt,
that the Payor does not intend to make the Required Payment to the
Administrative Agent, the Administrative Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Administrative Agent, the recipient of such payment shall, on demand, pay to the
Administrative Agent the amount made available to it together with interest
thereon in respect of the period commencing on the date such amount was so made
available by the Administrative Agent until the date the Administrative Agent
recovers such amount at a rate per annum equal to the Federal Funds Rate for
such period.
Section 3.5 Taxes.
(a) All payments by the Borrower of principal of and interest on the
Loans and of all fees and other amounts payable under the Loan Documents shall
be made free and clear of, and without withholding or deduction by reason of,
any present or future Other Taxes. If any Other Taxes are so levied or imposed,
the Borrower will (i) make additional payments in such amounts so that every
net payment of principal of and interest on the Loans and of all other amounts
CREDIT AGREEMENT - Page 37
38
payable by it under the Loan Documents, after withholding or deduction for or
on account of any such Other Taxes (including any tax imposed on or measured by
net income of a Lender attributable to payments made to or on behalf of a
Lender pursuant to this Section 3.5 and any penalties or interest attributable
to such payments), will not be less than the amount provided for herein or
therein absent such withholding or deduction (provided that the Borrower shall
not have any obligation to pay such additional amounts to any Lender to the
extent that such Other Taxes are levied or imposed by reason of the failure of
such Lender to comply with the provisions of Section 3.6), (ii) make such
withholding or deduction and (iii) remit the full amount deducted or withheld
to the relevant Governmental Authority in accordance with applicable law.
Without limiting the generality of the foregoing, the Borrower will, upon
written request of any Lender, reimburse each such Lender for the amount of (A)
such Other Taxes so levied or imposed by any Governmental Authority and paid by
such Lender as a result of payments made by the Borrower under or with respect
to the Loans other than such Other Taxes previously withheld or deducted by the
Borrower which have previously resulted in the payment of the required
additional amount to such Lender, and (B) such Other Taxes so levied or imposed
with respect to any Lender reimbursement under the foregoing clause (A), so
that the net amount received by such Lender (net of payments made under or with
respect to the Loans) after such reimbursement will not be less than the net
amount such Lender would have received if such Other Taxes on such
reimbursement had not been levied or imposed. The Borrower shall furnish
promptly to the Administrative Agent for distribution to each affected Lender,
as the case may be, upon request of such Lender, official receipts evidencing
any such payment, withholding or reduction.
(b) The Borrower will indemnify the Administrative Agent and each
Lender (without duplication) against, and reimburse the Administrative Agent
and each Lender for, all Other Taxes (including interest and penalties) levied
or collected (whether or not legally or correctly imposed, assessed, levied or
collected) on or in respect of this Agreement, any of the Loan Documents or the
Obligations or any portion thereof (the "reimbursable taxes"). Any such
indemnification shall be on an after-tax basis, taking into account any such
reimbursable taxes imposed on the amounts paid as indemnity.
(c) Without prejudice to the survival of any other term or
provision of this Agreement, the obligations of the Borrower under this Section
3.5 shall survive the payment of the Loans and the other Obligations and
termination of the Commitments.
Section 3.6 Withholding Tax Exemption. Each Lender that is not
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on or about the Closing Date or the date upon
which it initially becomes a party to this Agreement and if it is legally able
to do so, deliver to the Borrower and the Administrative Agent, two duly
completed copies of U.S. Internal Revenue Service Form W-8ECI or W-8BEN or
other equivalent successor forms, as appropriate, certifying in any case that
such Lender is entitled to receive payments from the Borrower under any Loan
Document without deduction or withholding of any U.S. federal income taxes.
Each Lender which so delivers a Form W-8ECI or W-8BEN or other equivalent
successor forms, as appropriate, further undertakes to deliver to the Borrower
and the Administrative Agent, two additional copies of such form (or a
successor form) on or before the date such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the
CREDIT AGREEMENT - Page 38
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Administrative Agent, in each case certifying that such Lender is entitled to
receive payments from the Borrower under any Loan Document without deduction or
withholding of any U.S. federal income taxes, unless an event (including,
without limitation, any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such Lender
advises the Borrower and the Administrative Agent that it is not capable of
receiving such payments without any deduction or withholding of U.S. federal
income tax.
Section 3.7 Reinstatement of Obligations. Notwithstanding
anything to the contrary contained in this Agreement or any other Loan
Document, if the payment of any amount of principal of or interest with respect
to the Loans or any other amount of the Obligations, or any portion thereof, is
rescinded, voided or must otherwise be refunded by the Administrative Agent or
any Lender upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise for any reason whatsoever, then each of (a) the Obligations, (b) the
Loan Documents (including, without limitation, this Agreement, the Notes and
the Security Documents), and (c) all Liens for the benefit of the
Administrative Agent and the Lenders created under or evidenced by the Loan
Documents, will be automatically reinstated and become automatically effective
and in full force and effect, all to the extent that and as though such payment
so rescinded, voided or otherwise refunded had never been made.
Section 3.8 No Force Majeure, Disputes. The Borrower's obligation
to pay all amounts due under the Loans and the other Obligations shall not be
affected by (a) any set-off, counterclaim, recoupment, deduction, abatement,
suspension, diminution, reduction, defense or other right which the Borrower
may have against the Vendor for any reason whatsoever arising under or pursuant
to the Master Purchase Agreement or otherwise relating to the purchase of goods
or services from the Vendor, (b) any defect in the condition, design, operation
or fitness for use of, or any damage to or loss or destruction of, any
equipment or material or service provided by the Vendor, (c) any insolvency,
bankruptcy, reorganization or similar proceedings by or against the Borrower or
affecting any of its Properties, (d) any action of any Governmental Authority
or any damage to or destruction of or any taking of the Borrower's Property or
any part thereof, (e) any change, waiver, extension, indulgence or failure to
perform or comply with, or other action or omission herein or in the other Loan
Documents (except for express written modifications to this Agreement or other
Loan Documents as and in the manner permitted under this Agreement or the other
Loan Documents), (f) any dissolution of the Borrower, (g) any inability or
illegality with respect to the use or ownership of the Borrower's Property, (h)
any failure to obtain, or expiration, suspension or other termination of, or
interruption to, any required licenses, permits, consents, authorizations,
approvals or other legal requirements, (i) the invalidity or unenforceability
of any of the Loan Documents or any other infirmity therein or any lack of
power or authority of the Administrative Agent or any Lender or the Borrower,
or (j) any other event or circumstance whatsoever, whether or not similar to
any of the foregoing and whether or not the Borrower shall have notice or
knowledge of any of the foregoing, it being the intention of the Administrative
Agent and the Lenders and the Borrower that the Obligations of the Borrower
shall be absolute and unconditional and shall be separate and independent
covenants and agreements and shall continue unaffected unless the requirements
to pay or perform the same shall have been terminated pursuant to an express
provision thereof or of any of the other Loan Documents.
CREDIT AGREEMENT - Page 39
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ARTICLE 4
Yield Protection and Illegality
Section 4.1 Additional Costs.
(a) The Borrower shall pay directly to each Lender from time to time,
promptly upon the request of such Lender, the reasonable costs incurred by such
Lender which such Lender reasonably determines are attributable to its making or
maintaining of any Eurodollar Loans or its obligation to make any of such Loans,
or any reduction in any amount receivable by such Lender hereunder in respect of
any such Loans or obligations (such increases in reasonable costs and reductions
in amounts receivable being herein called "Additional Costs"), resulting from
any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable to
such Lender under this Agreement or its Notes in respect of any of such
Loans (other than Excluded Taxes);
(ii) imposes or modifies any reserve, special deposit, minimum
capital, capital ratio or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (including any of such Loans
or any deposits referred to in the definition of "Eurodollar Rate" in
Section 1.1 hereof, but excluding the Reserve Requirement to the extent
it is included in the calculation of the Adjusted Eurodollar Rate); or
(iii) imposes any other condition affecting this Agreement or
the Notes or any extensions of credit or liabilities or commitments
contemplated hereunder or thereunder.
Each Lender will notify the Borrower (with a copy to the Administrative Agent)
of any event occurring after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 4.1(a) as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation. Each
Lender will, in a reasonably prompt fashion after it is able to do so, furnish
the Borrower with a certificate setting forth the basis, calculation and amount
of each request of such Lender for compensation under this Section 4.1(a). If
any Lender requests compensation from the Borrower under this Section 4.1(a),
the Borrower may, by notice to such Lender (with a copy to the Administrative
Agent), suspend the obligation of such Lender to make or Continue making, or
Convert Base Rate Loans into, Eurodollar Loans until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the provisions
of Section 4.4 hereof shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 4.1, in the event that, by reason of any Regulatory Change, any Lender
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
Eurodollar Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes Eurodollar
Loans or (ii) becomes subject to restrictions on the amount of such a category
of liabilities or assets which it may hold, then, if such Lender so elects by
notice to the Borrower (with a copy to the Administrative Agent), the obligation
of such Lender to make or Continue making, or Convert
CREDIT AGREEMENT - Page 40
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Base Rate Loans into, Eurodollar Loans hereunder shall be suspended until such
Regulatory Change ceases to be in effect (in which case the provisions of
Section 4.4 hereof shall be applicable).
(c) Determinations and allocations by any Lender for purposes of this
Section 4.1 of the effect of any Regulatory Change on its costs of maintaining
its obligation to make Loans or of making or maintaining Loans or on amounts
receivable by it in respect of Loans and of the additional amounts required to
compensate such Lender in respect of any Additional Costs, shall be conclusive
in the absence of manifest error, provided that such determinations and
allocations are made on a reasonable basis.
Section 4.2 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Eurodollar Loans for any
Interest Period therefor:
(a) the Administrative Agent reasonably determines (which determination
shall be conclusive absent manifest error) that quotations of interest rates for
the relevant deposits referred to in the definition of "Eurodollar Rate" in
Section 1.1 hereof are not being provided in the relative amounts or for the
relative maturities for purposes of determining the rate of interest for such
Loans as provided in this Agreement; or
(b) the Required Lenders determine (which determination shall be
conclusive absent manifest error) and notify the Administrative Agent that the
relevant rates of interest referred to in the definition of "Eurodollar Rate" or
"Adjusted Eurodollar Rate" in Section 1.1 hereof on the basis of which the rate
of interest for such Loans for such Interest Period is to be determined do not
accurately reflect the cost to the Lenders of making or maintaining such Loans
for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof and,
so long as such condition remains in effect, the Lenders shall be under no
obligation to make Eurodollar Loans or to Convert Base Rate Loans into
Eurodollar Loans and the Borrower shall, on the last day(s) of the then current
Interest Period(s) for the outstanding Eurodollar Loans, either prepay such
Loans or Convert such Loans into Base Rate Loans in accordance with the terms of
this Agreement.
Section 4.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Eurodollar Loans
or (b) maintain Eurodollar Loans, then such Lender shall promptly notify the
Borrower (with a copy to the Administrative Agent) thereof and such Lender's
obligation to make or maintain Eurodollar Loans and to Convert Base Rate Loans
into Eurodollar Loans hereunder shall be suspended until such time as such
Lender may again make and maintain Eurodollar Loans (in which case the
provisions of Section 4.4 hereof shall be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of any
Lender to make or Continue, or to Convert Base Rate Loans into, Eurodollar Loans
is suspended pursuant to Section 4.1 or 4.3 hereof, such Lender's Eurodollar
Loans shall be automatically Converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for the Eurodollar Loans (or, in the case
of a Conversion required by Section 4.1(b) or 4.3 hereof, on such earlier date
as
CREDIT AGREEMENT - Page 41
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such Lender may specify to the Borrower with a copy to the Administrative
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 4.1 or 4.3 hereof which gave rise to such
Conversion no longer exist (as a result of Section 4.8 or Section 4.9 or
otherwise):
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal which would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans which would otherwise be made or Continued by such Lender
as Eurodollar Loans shall be made as or Converted into Base Rate Loans and all
Loans of such Lender which would otherwise be Converted into Eurodollar Loans
shall be Converted instead into (or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower that the circumstances specified in
Section 4.1 or 4.3 hereof which gave rise to the Conversion of such Lender's
Eurodollar Loans pursuant to this Section 4.4 no longer exist (which such Lender
agrees to do promptly upon such circumstances ceasing to exist) at a time when
Eurodollar Loans are outstanding, such Lender's Base Rate Loans shall be
automatically Converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Loans, to the extent necessary so
that, after giving effect thereto, all Loans held by the Lenders holding
Eurodollar Loans and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective Commitments.
Section 4.5 Compensation. The Borrower shall pay to the Administrative
Agent for the account of each Lender, promptly upon the request of such Lender
through the Administrative Agent, such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for any loss
(excluding lost profits), cost or expense incurred by it as a result of:
(a) Any payment, prepayment or Conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the outstanding Loans
pursuant to Section 11.2) on a date other than the last day of an Interest
Period for such Loan; or
(b) Any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article 6 to be
satisfied) to borrow, Convert or prepay a Eurodollar Loan on the date for such
borrowing, Conversion or prepayment specified in the relevant notice of
borrowing, prepayment or Conversion under this Agreement.
Each Lender will, in a reasonably prompt fashion after it is able to do so,
furnish the Borrower with a certificate setting forth the basis, calculation and
amount of each request of such Lender for compensation under this Section 4.5.
Section 4.6 Capital Adequacy. If, after the Closing Date, any Lender
shall have determined that the adoption or implementation (after the Closing
Date) of any applicable law, rule or regulation regarding capital adequacy
(including, without limitation, any law, rule or regulation implementing the
Basle Accord), or any change (after the Closing Date) therein, or any change
(after the Closing Date) in the interpretation or administration thereof by any
central
CREDIT AGREEMENT - Page 42
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bank or other Governmental Authority charged with the interpretation or
administration thereof, or compliance (after the Closing Date) by such Lender
(or its parent) with any guideline, request or directive regarding capital
adequacy (whether or not having the force of law) of any central bank or other
Governmental Authority (including, without limitation, any guideline or other
requirement implementing the Basle Accord), has or would have the effect of
reducing the rate of return on such Lender's (or its parent's) capital as a
consequence of its obligations hereunder or the transactions contemplated hereby
to a level below that which such Lender (or its parent) could have achieved but
for such adoption, implementation, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender to be material, then from time to time,
within ten Business Days after demand by such Lender (with a copy to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender (or its parent) for such
reduction. A certificate of such Lender claiming compensation under this Section
4.6 and setting forth, in reasonable detail, the additional amount or amounts to
be paid to it hereunder and the calculations for arriving at such amount or
amounts shall be conclusive absent manifest error, provided that the
determination thereof is made on a reasonable basis. In determining such amount
or amounts, such Lender may use any reasonable averaging and attribution
methods.
Section 4.7 Additional Interest on Eurodollar Loans. Without
duplication of Section 2.4 or amounts directly included in the definition of the
term "Adjusted Eurodollar Rate", the Borrower shall pay, directly to each Lender
from time to time, additional interest on the unpaid principal amount of each
Eurodollar Loan held by such Lender, from the date of the making of such
Eurodollar Loan until such principal amount is paid in full, at an interest rate
per annum determined by such Lender in good faith equal to the positive
remainder (if any) of (a) the Adjusted Eurodollar Rate applicable to such
Eurodollar Loan minus (b) the Eurodollar Rate applicable to such Eurodollar
Loan. Each payment of additional interest pursuant to this Section 4.7 shall be
payable by the Borrower on each date upon which interest is payable on such
Eurodollar Loan pursuant to Section 2.4(b); provided, however, that the Borrower
shall not be obligated to make any such payment of additional interest until the
first Business Day after the date when the Borrower has been informed (i) that
such Lender is subject to a Reserve Requirement and (ii) of the amount of such
Reserve Requirement (after which time the Borrower shall be obligated to make
all such payments of additional interest, including, without limitation, such
payment of additional interest that otherwise would have been payable by the
Borrower on or prior to such time had the Borrower been earlier informed).
Section 4.8 Replacement of Lenders. If at any time a Lender becomes a
Gross Up Lender, the Borrower shall have the right to replace such Lender with
another Person; provided that (a) such other Person shall be an Eligible
Assignee and such other Person shall execute an Assignment and Acceptance, (b)
neither the Administrative Agent nor any Lender shall have any obligation to the
Borrower to find such a replacement lender, (c) in the event of a replacement of
a Gross Up Lender, in order for the Borrower to be entitled to replace such
Lender, such replacement must take place no later than 180 days after the date
the Gross Up Lender shall notify the Borrower and the Administrative Agent of
its desire to be paid any amounts pursuant to Section 3.5, 4.1 or 4.6, and (d)
if the Borrower replaces one Gross Up Lender, it must replace all Gross Up
Lenders or replace all Gross Up Lenders on a pro rata basis. Each Lender agrees
to its replacement as a Lender at the option of the Borrower pursuant to this
Section 4.8 and in accordance with Section 13.8; provided that the successor
Lender shall purchase without
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recourse such Lender's interest in the Obligations of the Borrower to such
Lender for cash in an aggregate amount equal to the aggregate unpaid principal
thereof, all unpaid interest accrued thereon, all unpaid commitment fees accrued
for the account of such Lender, any breakage costs incurred by the selling
Lender because of the prepayment of any Eurodollar Loans, all other fees (if
any) applicable thereto and all other amounts (including any amounts under this
Article 4) then owing to such Lender hereunder or under any other Loan Document.
Section 4.9 Change of Applicable Lending Office. In the event that any
Lender has requested compensation from the Borrower in accordance with Section
3.5, 4.1(a) or 4.6, or in the event that any Lender's obligation to make or
maintain Eurodollar Loans is suspended in accordance with Section 4.3, then such
Lender shall, if requested to do so by the Borrower, designate a different
applicable lending office for the applicable Loans of such Lender if such
designation will avoid the need for, or reduce the amount of, such compensation
or will avoid the illegality of making or maintaining Eurodollar Loans (as
applicable) and if such designation will not, in the sole opinion of such
Lender, violate any law, rule or regulation or be in any way disadvantageous to
such Lender in any material respect.
ARTICLE 5
Security
Section 5.1 Collateral. To secure the full and complete payment and
performance of the Obligations, the Borrower will grant to the Administrative
Agent for the benefit of the Administrative Agent and the Lenders a perfected,
first priority Lien on all of its right, title and interest in and to the
Collateral, whether now owned or hereafter acquired, pursuant to the Security
Agreements.
Section 5.2 Guaranties. The Borrower will cause Holdings to Guarantee
the payment and performance of the Obligations pursuant to a Guaranty.
Section 5.3 Landlord Waivers or Subordinations. With respect to each
lease of real Property executed by the Borrower or any of its Subsidiaries or
Affiliates whereat any of the Collateral constituting switches is located, the
Borrower will, and will cause each of its Subsidiaries or Affiliates (as
applicable) to, use its best efforts to obtain, within 30 days after the Closing
Date and continuing thereafter as may be necessary or appropriate to obtain the
same, waivers or subordinations of landlord's Liens from each lessor and other
agreements from such lessor and its lenders necessary or appropriate to ensure
Administrative Agent's perfected, first priority Lien on the Collateral affected
thereby and the Administrative Agent's access to such Collateral, in each case
in form and substance reasonably satisfactory to the Administrative Agent.
Section 5.4 Further Assurances. In addition to the foregoing, the
Borrower shall, and shall cause each of the other Loan Parties and other
appropriate Persons (as applicable) to, execute and/or deliver such further
agreements, documents and instruments (including, without limitation, financing
statements) as the Administrative Agent may reasonably request in order for it
to obtain and maintain the perfected, first priority Liens to be granted in
accordance with this Article 5.
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45
Section 5.5 Setoff. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without prior notice to the Borrower (any such notice being hereby expressly
waived by the Borrower), to set off and apply any and all deposits (general or
special, time or demand, provisional or final excluding any trust accounts) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of the Borrower against any and all of the Obligations
of the Borrower now or hereafter existing under this Agreement, such Lender's
Note or any other Loan Document, irrespective of whether or not the
Administrative Agent or such Lender shall have made any demand under this
Agreement, such Lender's Note or any such other Loan Document and although such
Obligations may be unmatured. Each Lender agrees promptly to notify the Borrower
(with a copy to the Administrative Agent) after any such setoff and application,
provided that the failure to give such notice shall not affect the validity of
such setoff and application. The rights and remedies of each Lender hereunder
are in addition to other rights and remedies (including, without limitation,
other rights of setoff) which such Lender may have.
ARTICLE 6
Conditions Precedent
Section 6.1 Initial Extension of Credit. The obligation of each Lender
to make its initial Loan under this Agreement is subject to the receipt by the
Administrative Agent, on or before the Closing Date, of all of the following in
form and substance satisfactory to the Administrative Agent and the Lenders and,
in the case of actions to be taken, the taking of the following required actions
and evidence that such actions have been taken to the satisfaction of the
Administrative Agent:
(a) Resolutions. Resolutions of the board of directors or equivalent
governing body (as applicable) certified by the Secretary or an Assistant
Secretary or equivalent officer or representative of each Loan Party which
authorize the execution, delivery and performance by such Loan Party of the Loan
Documents to which it is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency certified by
the Secretary or an Assistant Secretary (or other analogous officer or
representative) of each Loan Party certifying as to the name of each officer or
other representative of such Loan Party (i) who is authorized to sign the Loan
Documents to which it is or is to be a party (including any certificates
contemplated therein), together with specimen signatures of each such officer or
other representative, and (ii) who will, until replaced by other officers or
representatives duly authorized for that purpose, act as its representative for
the purposes of signing documents and giving notices and other communications in
connection with the Loan Documents and the transactions contemplated thereby;
(c) Articles of Incorporation. The certificate of incorporation or
articles of incorporation, articles of association, certificate of formation or
other analogous constitutional documents of each Loan Party certified by the
Secretary of State or other applicable Governmental Authority of the state of
incorporation or organization of such entity and dated as of a Current Date;
(d) Bylaws. The bylaws, regulations, operating agreement or other
analogous constitutional documents of each Loan Party certified by its Secretary
or an Assistant Secretary
CREDIT AGREEMENT - Page 45
46
(or other analogous officer or representative);
(e) Governmental Certificates. Certificates of appropriate officials as
to the existence and good standing of each of the Loan Parties in its
jurisdiction of incorporation or organization or formation and in all
jurisdictions in which such Loan Party is qualified or is required to qualify to
do business as a foreign entity, each such certificate to be dated as of a
Current Date;
(f) Notes. The Notes duly completed and executed by the Borrower (one
payable to the order of each Lender with respect to its Commitment);
(g) Security Agreements and Other Security Documents. A Security
Agreement executed by the Borrower pertaining to the Collateral, together with
all related financing statements and other filings, and, with respect to each
existing lease of real Property where Collateral constituting switches is
located and if and to the extent required by Section 5.3, waivers or
subordinations of landlord's Liens from each lessor and other agreements from
such lessor and its lenders necessary or appropriate to ensure Administrative
Agent's perfected, first priority Lien on the Collateral affected thereby and
the Administrative Agent's access to such Collateral or real Property, in each
case in form and substance reasonably satisfactory to the Administrative Agent;
(h) Insurance Certificates and Policies. Certificates evidencing all
insurance policies required by this Agreement and the other Loan Documents and,
if requested by the Administrative Agent, copies of all such insurance policies;
(i) Lien Searches. Lien searches in the name of each of the Loan
Parties (and in all names under which any of them has done business within the
last five years) in each jurisdiction where such Loan Party maintains an office
or has Property, showing no financing statements or other Lien instruments of
record affecting the Collateral except for Permitted Liens and Liens being
released prior to or concurrently with the making of the initial Loan;
(j) Master Purchase Agreement. The Master Purchase Agreement dated as
of January 1, 1998 shall be in full force and effect, and the Administrative
Agent shall have received a photocopy of the Master Purchase Agreement as so
executed and delivered, certified by a Responsible Officer of the Borrower as
being a true and correct copy of such document;
(k) Payment of Fees and Expenses. The Borrower shall have paid all
reasonable fees, costs and expenses of or incurred by the Administrative Agent
and its counsel to the extent billed on or before the Closing Date and payable
pursuant to this Agreement;
(l) Compliance with Laws. The Borrower and the other Loan Parties shall
have complied in all material respects with all Governmental Requirements
necessary to execute and deliver this Agreement and the other Loan Documents and
to perform and consummate the transactions contemplated by this Agreement and
the other Loan Documents;
(m) No Prohibitions. No Governmental Requirement shall prohibit the
execution or delivery of this Agreement or any other Loan Document or the
performance or consummation of the transactions contemplated by this Agreement
or any other Loan Document, and no order, judgment or decree of any Governmental
Authority or arbitrator shall, and no litigation or other
CREDIT AGREEMENT - Page 46
47
proceeding shall be pending or, to the Borrower's knowledge, threatened which
would, enjoin, prohibit, restrain or otherwise adversely affect in any material
manner the execution or delivery of this Agreement or any other Loan Document or
the performance or consummation of the transactions contemplated by this
Agreement or any other Loan Document or otherwise have a Material Adverse
Effect;
(n) Financial Statements. Copies of each of the financial statements
referred to in Section 7.2, in each case as certified by a Responsible Officer
of the applicable Loan Party as having been prepared in accordance with GAAP and
as fairly presenting the financial condition of the applicable Loan Party as of
the respective dates indicated therein and results of operations for the
respective periods indicated therein;
(o) Opinions of Counsel. Favorable legal opinions of counsel for the
Loan Parties, in form and substance and reasonably satisfactory to the
Administrative Agent, with respect to the Loan Parties and with respect to the
Loan Documents;
(p) Business Plan. A copy of the Business Plan in form and substance
reasonably satisfactory to the Administrative Agent;
(q) Material Agreements. A true and correct and fully executed copy of
each of (i) the Holdings Merger Agreement, (ii) the Holdings Senior Notes
Documents, and (iii) the Receivables Financing Documents;
(r) Waivers and Consents. To the extent not referred to in clause (g)
preceding, copies of all material waivers and consents necessary for the
execution, delivery and performance by each of the Loan Parties of the Loan
Documents to which it is a party, including, without limitation, any (if any)
waivers and consents which may be necessary or appropriate therefor with respect
to the Master Purchase Agreement, the Holdings Senior Notes Documents, the
Holdings Exchange Senior Notes Documents and the Receivables Financing Documents
as the Administrative Agent may reasonably require, which waivers and consents
shall be certified by a Responsible Officer of the Borrower as true and correct
copies of such consents as of the Closing Date;
(s) No Material Adverse Change. As of the Closing Date, no material
adverse change shall have occurred with respect to the businesses, assets,
financial condition, results of operations, operations, capitalization,
indebtedness, liabilities, obligations, profitability or prospects or Properties
or of the general affairs or management of Holdings and its Subsidiaries, taken
as a whole, or of the Borrower individually or of the Borrower and its
Subsidiaries taken as a whole, in each case since June 30, 1999;
(t) Solvency. A certificate certifying that each of (a) Holdings and
its Subsidiaries on a consolidated basis and (b) the Borrower and its
Subsidiaries on a consolidated basis, is Solvent; and
(u) Repayment of Prior Note. The Debt evidenced by the Prior Note shall
have been paid in full concurrently with the making of the initial Loan under
this Agreement.
The Borrower shall deliver, or cause to be delivered, to the Administrative
Agent sufficient
CREDIT AGREEMENT - Page 47
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counterparts of each agreement, document or instrument to be received by the
Administrative Agent under this Section 6. 1 to permit the Administrative Agent
to distribute a copy of the same to each of the Lenders. After the request of
the Borrower, the Administrative Agent shall inform the Borrower in writing as
to the status of satisfaction of the conditions precedent set forth in this
Section 6.1.
Section 6.2 All Extensions of Credit. Subject to Section 2.5, the
obligation of each Lender to make any Loan (including the initial Loan) under
this Agreement is subject to the satisfaction of each of the following
additional conditions precedent:
(a) No Default or Material Adverse Effect. No Default or Material
Adverse Effect shall have occurred and be continuing, or would result from such
Loan;
(b) Representations and Warranties. All of the representations and
warranties of the Borrower and the other Loan Parties contained in this
Agreement and in the other Loan Documents shall be true and correct on and as of
the date of such Loan with the same force and effect as if such representations
and warranties had been made on and as of such date (it being agreed and
understood that any representation or warranty which by its terms is made only
as of a specific date or dates shall be required to be true and correct only as
of such specific date or dates);
(c) Use of Proceeds. The Borrower shall have certified to the
Administrative Agent that all proceeds of the Loans then being made by the
Lenders are, concurrently with the making of such Loans, being used by the
Borrower for the purposes specified in Section 2.10; and
(d) Master Purchase Agreement. The Master Purchase Agreement dated as
of January 1, 1998 shall not have been terminated by the Borrower.
Each notice of borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower that the conditions precedent set
forth in this Section 6.2 have been satisfied (both as of the date of such
notice and, unless the Borrower otherwise notifies the Administrative Agent
prior to the date of such borrowing, as of the date of such borrowing).
Section 6.3 Closing Certificates. The Borrower shall, concurrently with
the Closing Date (with respect to the conditions precedent set forth in Section
6.1) and concurrently with the date of the making of each other Loan if
requested by the Administrative Agent (with respect to the conditions precedent
set forth in Section 6.2), execute and deliver to the Administrative Agent a
certificate in form and substance reasonably satisfactory to the Administrative
Agent certifying as to the satisfaction of each of the conditions precedent set
forth in Section 6.1 (with respect to the certificate to be executed
concurrently with the Closing Date) or Section 6.2 (with respect to any
certificate to be executed thereafter) which are required to be satisfied on or
before such date (without regard to whether such matters are, in fact,
satisfactory to the Administrative Agent to the extent that such satisfaction is
required hereunder).
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ARTICLE 7
Representations and Warranties
The Borrower represents and warrants to the Administrative Agent and
the Lenders that the following statements are and, after giving effect to the
funding of the initial Loans on the Closing Date and continuing thereafter as
long as the Obligations or any part thereof are outstanding or any Lender has
any Commitment hereunder, will be true and correct (it being agreed and
understood that any representation or warranty which by its terms is made only
as of a specific date shall be required to be true and correct only as of such
specific date):
Section 7.1 Existence. Each Loan Party (a) is a limited liability
company (with respect to the Borrower), a corporation (with respect to Holdings)
or other entity (as applicable, with respect to the other Loan Parties) duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization (as applicable), (b) has, in
all material respects, all requisite power and authority to own its Properties
and carry on its business as now conducted, and (c) is qualified to do business
in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify would have a Material
Adverse Effect. Each of the Loan Parties has the power and authority and legal
right to execute, deliver and perform its obligations under the Loan Documents
to which it is or may become a party.
Section 7.2 Financial Statements.
(a) The Borrower has delivered to the Administrative Agent and the
Lenders (i) the audited consolidated financial statements (including balance
sheet and statements of income or operations, shareholders' equity and cash
flows) of Holdings and its Consolidated Subsidiaries (including, without
limitation, the Borrower) as of and for the fiscal year ended September 30,
1998, and (ii) unaudited consolidated financial statements (including balance
sheets and statements of income or operations, shareholders' equity and cash
flows) of Holdings and its Consolidated Subsidiaries (including, without
limitation, the Borrower) as of and for the fiscal quarter ended June 30, 1999.
All financial statements required to be delivered to the Administrative Agent in
accordance with this Agreement (including, without limitation, those referred to
in the immediately preceding sentence) have been or will be (as applicable)
prepared in accordance with GAAP and fairly and accurately present or will
fairly and accurately present (as applicable), on a consolidated and
consolidating (where applicable) basis, the financial condition of Holdings and
its Consolidated Subsidiaries (including, without limitation, the Borrower) as
of such dates and the results of operations for the respective periods indicated
therein. There has not been, as of the Closing Date, any material adverse change
in the financial condition, results of operations, businesses, operations,
Properties, capitalization, assets, liabilities or prospects of Holdings and its
Subsidiaries taken as a whole, or of the Borrower on an individual basis or of
the Borrower and its Subsidiaries taken as a whole, since June 30, 1999.
(b) The Business Plan (including, without limitation, the financial
projections contained therein) represents, as of the Closing Date, the good
faith estimate of the Borrower and its senior management concerning the probable
financial condition and performance of the Borrower and its Subsidiaries for the
time period covered thereunder based upon the assumptions believed to be
reasonable at the time made.
Section 7.3 Corporate Action; No Breach. The execution, delivery and
performance by each of the Loan Parties of the Loan Documents to which it is or
may become a party and compliance with the terms and provisions hereof and
thereof have been duly authorized by all
CREDIT AGREEMENT - Page 49
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requisite entity action and do not and will not (a) violate or conflict with, or
result in a breach of, or require any consent under (i) the articles of
association, articles of incorporation, certificate of formation, articles of
organization, bylaws, operating agreement, regulations or other constitutional
documents of such Loan Party, (ii) in any material respect, any Governmental
Requirement (including, without limitation, the Communications Act, any rule or
regulation of the FCC or any rule or regulation of any federal or state public
utility commission or other Governmental Authority) or any order, writ,
injunction or decree of any Governmental Authority or arbitrator, or (iii) in
any material respect, any material agreement, document or instrument to which
any Loan Party is a party or by which any Loan Party or any of its Property is
bound or subject, or (b) in any material respect, constitute a default under any
such material agreement, document or instrument, or result in the creation or
imposition of any Lien (except a Lien in favor of the Administrative Agent for
and on behalf of the Lenders under the Security Documents as provided in Article
5) upon any of the revenues or Property of any Loan Party.
Section 7.4 Operation of Business; Licenses and Permits. Each Loan
Party (a) possesses all material Licenses, Permits, franchises and
authorizations necessary or appropriate to conduct its businesses substantially
as now conducted and as to be conducted as contemplated by the Business Plan,
except where failure to possess the same could not reasonably be expected to
have a Material Adverse Effect and (b) has complied, in all material respects,
with all initial and on-going conditions to the issuance and use of all such
material Licenses, Permits, franchises and authorizations, except where failure
to comply could not reasonably be expected to have a Material Adverse Effect. To
the Borrower's knowledge, none of such Persons is in violation of any such
material Licenses, Permits, franchises or authorizations which could be expected
to result in any termination or cessation thereof. All such material Licenses
and Permits which are material to the business or operations of the Borrower
and/or its Subsidiaries have been duly issued by the appropriate Governmental
Authority (as applicable) and are in full force and effect, and all provisions
of such Licenses and Permits have been complied with in all material respects.
As of the Closing Date, no such material License or Permit is subject to any
pending or, to the knowledge of the Borrower, threatened revocation or
termination proceeding or action.
Section 7.5 Intellectual Property. Each Loan Party owns or possesses
(or will be licensed or have the full right to use) all Intellectual Property
which is necessary or appropriate for the operation of its businesses as
presently conducted and as proposed to be conducted, without any known conflict
with the rights of others, except where failure to own or possess the same could
not reasonably be expected to have a Material Adverse Effect. The consummation
of the transactions contemplated by this Agreement and the other Loan Documents
will not materially alter or impair, individually or in the aggregate, any of
such rights of such Persons. No product or service of any Loan Party infringes
upon any Intellectual Property of any other Person, and no claim or litigation
is pending or, to the knowledge of the Borrower, threatened against any such
Person contesting its right to sell or otherwise use any product or material or
service, in each case which could reasonably be expected to have a Material
Adverse Effect. To the Borrower's knowledge, there is no violation by any Loan
Party of any right of such Person with respect to any Intellectual Property
owned or used by such Person, except where such violation could not reasonably
be expected to have a Material Adverse Effect.
Section 7.6 Litigation and Judgments. Each material action, suit,
investigation or proceeding in any court or before any arbitrator or mediator or
before or by any Governmental Authority (whether or not any Governmental
Authority is a party thereto) pending or, to the
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51
knowledge of the Borrower, threatened against or affecting any Loan Party, or
that relates to any of the Loan Documents as of the Closing Date, is disclosed
on Schedule 7.6. None of such actions, suits, investigations or proceedings
could, if adversely determined, reasonably be expected to have a Material
Adverse Effect. Except as may be disclosed on Schedule 7.6, as of the Closing
Date, there are no outstanding judgments against any Loan Party.
Section 7.7 Rights in Properties; Liens. Each Loan Party has good and
marketable title to or, with respect to leasehold interests, valid leasehold
interests in all of its material Properties and assets, real and personal,
including the material Properties, assets and leasehold interests reflected in
the financial statements described in Section 7.2(a), except where failure to
have good and marketable title or valid leasehold interests could not reasonably
be expected to have a Material Adverse Effect, and none of the Properties or
leasehold interests of any of the Loan Parties is subject to any Lien, except
Permitted Liens. No Loan Party has granted or voluntarily allowed or permitted
to exist any Lien to or in favor of any Person (other than the Administrative
Agent for and on behalf of the Lenders as security for the Obligations) which
attaches or relates to any of the Collateral and the Liens on the Collateral in
favor of the Administrative Agent are perfected, first priority Liens.
Section 7.8 Enforceability. The Loan Documents have been duly and
validly executed and delivered by each of the Loan Parties that is a party
thereto, and such Loan Documents constitute the legal, valid and binding
obligations of such Persons, enforceable against each such Person in accordance
with their respective terms, except as limited by bankruptcy, insolvency or
other laws of general application relating to the enforcement of creditors'
rights and general principles of equity.
Section 7.9 Approvals. No authorization, approval or consent of, and no
filing or registration with or notice to, any Governmental Authority (including
the FCC) or third party is or will be necessary for the execution, delivery or
performance by any Loan Party of any of the Loan Documents to which it is or
will be a party or for the validity or enforceability thereof, except for such
consents, approvals and filings as have been validly obtained or made and are in
full force and effect. The consummation of the transactions contemplated by the
Loan Documents does not require the consent or approval of any other Person,
except such consents and approvals (a) as have been validly obtained and are in
full force and effect or (b) as to which the failure to obtain is not,
individually or in the aggregate, material. No Loan Party has failed to obtain
any consent, approval, License, Permit, franchise or other authorization of any
Governmental Authority (including the FCC) necessary for the ownership or use of
any of its Properties, conduct of its business and performance of the Business
Plan, except where such failure to obtain the same could not reasonably be
expected to have a Material Adverse Effect.
Section 7.10 Debt. As of the Closing Date, the Borrower does not have
any Debt other than (a) the Obligations, and (b) the Debt disclosed on Schedule
7.10 hereto.
Section 7.11 Taxes. Each of the Loan Parties has filed (a) all tax
returns (federal, state and local) and reports required to be filed, including,
without limitation, all income, franchise, employment, Property and sales tax
returns, and (b) all other material tax returns and reports required to be filed
except where failure to file could not reasonably be expected to have a Material
Adverse Effect, and has paid all federal and other material taxes (shown on such
returns or reports to be due and payable), assessments, fees and other
governmental charges levied or
CREDIT AGREEMENT - Page 51
52
imposed upon it or its Properties, income or assets otherwise due and payable
before they become delinquent, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP and no notice of Lien has been filed or
recorded. To the Borrower's knowledge, there is no proposed tax assessment
against any Loan Party which could, if the assessment were made, reasonably be
expected to have a Material Adverse Effect.
Section 7.12 Margin Securities. None of the Loan Parties is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations T, U or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.
Section 7.13 ERISA. Each Plan (if any) of the Loan Parties is in
compliance in all material respects with all applicable provisions of ERISA and
the Code. As of the Closing Date and at all times thereafter prior to
consummation of the Holdings Merger, (a) none of the Plans (if any) is a Defined
Benefit Plan and no Loan Party or ERISA Affiliate has ever sponsored, maintained
or contributed to, or ever been obligated to contribute to, a Defined Benefit
Plan, and (b) none of the Plans (if any) is a Multiemployer Plan and no Loan
Party or ERISA Affiliate has ever contributed to, or ever been obligated to
contribute to, a Multiemployer Plan. No litigation is pending or, to the
Borrower's knowledge, threatened concerning or involving any Plan (if any) that
could reasonably be expected to have a Material Adverse Effect.
Section 7.14 Disclosure. No written statement, information, report,
representation or warranty (taken as a whole) furnished to the Administrative
Agent or any Lender by or on behalf of any Loan Party in connection with the
Loan Documents or any transaction contemplated hereby or thereby, and no written
representation or warranty made by any Loan Party in any Loan Document, contains
any untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances in which made, not misleading in any material respect. There is no
fact known to the Borrower which has had a Material Adverse Effect, and there is
no fact known to the Borrower as of the Closing Date which could reasonably be
expected to have a Material Adverse Effect except as may have been disclosed in
writing to the Administrative Agent.
Section 7.15 Loan Parties. Schedule 7.15 attached hereto contains, as
of the Closing Date, complete and accurate information regarding (a) the
identities of each of the Subsidiaries of Holdings, (b) the identity of each
class of Capital Stock issued by the Borrower and each of its Subsidiaries and
the identities of, and percentage of each of such shares held by, the owner(s)
(both of record and beneficially) of such Capital Stock and (c) the jurisdiction
of incorporation or other organization of each Loan Party. Holdings owns,
beneficially and of record, all of the issued and outstanding shares of Capital
Stock of the Borrower.
Section 7.16 Compliance with Laws. None of the Loan Parties is in
violation of any Governmental Requirement (including, without limitation, the
Communications Act, any rule or regulation of the FCC or any rule or regulation
of any federal or state public utility commission or other Governmental
Authority), except for instances of non-compliance that could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
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Section 7.17 Investment Company Act. No Loan Party is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended.
Section 7.18 Public Utility Holding Company Act. No Loan Party is a
"holding company" or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Section 7.19 Environmental Matters.
(a) Except for instances of noncompliance with or exceptions to any of
the following representations and warranties that could not have, individually
or in the aggregate, a Material Adverse Effect:
(i) Each Loan Party and all of its respective owned or leased
real Properties and operations are in substantial compliance with all
Environmental Laws. The Borrower is not aware of, and no Loan Party has
received written notice of, any past, present or future conditions,
events, activities, practices or incidents which may interfere with or
prevent the substantial compliance or continued compliance by such Loan
Party with all Environmental Laws;
(ii) To the knowledge of the Borrower, no Hazardous Materials
exist on, about or within or have been or are being used, generated,
stored, transported, disposed of on or Released from any of the owned
or leased real Properties of any Loan Party except in substantial
compliance with applicable Environmental Laws. The use which each Loan
Party makes and intends to make of its respective owned or leased real
Properties will not result in the use, generation, storage,
transportation, accumulation, disposal or Release of any Hazardous
Material on, in or from any of their currently owned real Properties
except in substantial compliance with applicable Environmental Laws;
(iii) To the knowledge of the Borrower, there are no
conditions or circumstances associated with the currently owned or
leased real Properties or operations of any Loan Party that could
reasonably be expected to give rise to any material Environmental
Liabilities or claims resulting in any material Environmental
Liabilities;
(iv) To the knowledge of the Borrower, none of the Loan
Parties and none of their respective owned or leased real Properties or
operations are subject to any outstanding or, to the knowledge of the
Borrower, threatened order from or agreement with any Governmental
Authority or other Person or subject to any judicial or administrative
proceeding with respect to (A) any failure to comply with Environmental
Laws, (B) any Remedial Action, or (C) any Environmental Liabilities;
(v) None of the Loan Parties is subject to, or has received
written notice of any claim from any Person alleging that it is or will
be subject to, any Environmental Liabilities;
(vi) None of the Properties of any of the Loan Parties is a
treatment facility
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(except for the recycling of Hazardous Materials generated on-site and
the treatment of liquid wastes subject to the Clean Water Act or other
applicable Environmental Law for temporary storage of Hazardous
Materials generated on-site prior to their disposal off-site) or
disposal facility requiring a permit under the Resource Conservation
and Recovery Act, 42 U.S.C. ' 6901 et seq., regulations thereunder or
any comparable provision of state law. The Loan Parties are in material
compliance with all applicable financial responsibility requirements of
all Environmental Laws; and
(viii) None of the Loan Parties has failed to file any notice
required under applicable Environmental Law reporting a Release.
(b) No Lien arising under any Environmental Law that could have,
individually or in the aggregate, a Material Adverse Effect has attached to any
owned or leased real Property or revenues of any of the Loan Parties.
Section 7.20 Year 2000 Compliance. Each Loan Party has (a) initiated a
review and assessment of all areas within its business and operations (including
those affected by suppliers and vendors) that could reasonably be expected to be
relevant to whether such Loan Party is Year 2000 Compliant, (b) developed a plan
and timeline for ensuring that it is Year 2000 Compliant on a timely basis, and
(c) to date, implemented that plan in accordance with that timetable. Based upon
the foregoing, each Loan Party reasonably believes that it is Year 2000
Compliant as of the Closing Date.
Section 7.21 Labor Disputes and Acts of God. Neither the business nor
the Properties of any of the Loan Parties are affected by any fire, explosion,
accident, strike, lockout or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance) that is having or could reasonably be
expected to have a Material Adverse Effect.
Section 7.22 Employee Matters. As of the Closing Date (a) neither any
Loan Party nor any of its employees is subject to any collective bargaining
agreement, and (b) no petition for certification or union election is pending
with respect to the employees of any Loan Party, and no union or collective
bargaining unit has sought such certification or recognition with respect to the
employees of any such Person. There are no strikes, slowdowns, work stoppages or
controversies pending or, to the best knowledge of the Borrower after due
inquiry, threatened against, any Loan Party or its respective employees which
could have, either individually or in the aggregate, a Material Adverse Effect.
Section 7.23 Insurance. Schedule 7.23 sets forth a complete and
accurate description of all policies of insurance that are in effect as of the
Closing Date for the Loan Parties and their Properties located in the U.S.,
which policies satisfy the requirements of Section 8.5. To the extent such
policies have not been replaced, no notice of cancellation has been received for
such policies and the Borrower and the owner and holder of each such policy are
in compliance with all of the terms and conditions of such policies.
Section 7.24 Common Enterprise. The Borrower and each Loan Party are
members of an affiliated group with each other such Person and are collectively
engaged in a common enterprise with one another. Each of the Loan Parties
expects to derive substantial benefit (and
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55
may reasonably be expected to derive substantial benefit), directly and
indirectly, from the Loans contemplated by this Agreement, both in its separate
capacity and as a member of an affiliated and integrated group.
Section 7.25 Burdensome Agreements. None of the Loan Parties is in
default in any material respect in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any Material
Agreement binding on it or its Properties, except for instances of noncompliance
that, individually or in the aggregate, could not have a Material Adverse
Effect.
ARTICLE 8
Affirmative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, it
will perform and observe, or cause to be performed and observed, the following
covenants:
Section 8.1 Reporting Requirements. The Borrower will furnish (or will
cause to be furnished) to the Administrative Agent and each Lender:
(a) Annual Financial Statements. As soon as available, and in any event
within 90 days after the end of each fiscal year of the Borrower, beginning with
the fiscal year ending September 30, 1999 (and, in the case of the Borrower
after consummation of the Holdings Merger, beginning with the fiscal year ending
December 31, 1999), either (i) a copy of the Form 10-K (including all financial
statements contained therein) filed by Holdings as of the end of and for such
fiscal year then ended, together with consolidating schedules for each of
Holdings and its Subsidiaries (including, without limitation, the Borrower) with
respect to the financial statements contained therein, or (ii) a copy of the
annual audit report (including the consolidated balance sheet) of Holdings and
its Subsidiaries (including, without limitation, the Borrower) as of the end of
such year and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year, together with
consolidating schedules for Holdings and its Subsidiaries (including, without
limitation, the Borrower) with respect to each of such financial statements, in
each case setting forth in comparative form the figures for the previous fiscal
year, and accompanied by the opinion of independent certified public accountants
of recognized standing reasonably acceptable to the Administrative Agent, which
opinion shall state that such consolidated financial statements present fairly
the financial position and results of operations for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years and which
opinion shall not be qualified or limited because of a restricted or limited
examination by such accountant of any material portion of such Person's records;
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the end of each of the quarters of each fiscal year
of the Borrower, beginning with the fiscal quarter ending September 30, 1999
(and, in the case of the Borrower after consummation of the Holdings Merger,
beginning with the fiscal quarter ending December 31, 1999), either (i) a copy
of the Form 10-Q (including all financial statements contained therein) filed by
Holdings as of the end of and for such fiscal quarter then ended, together with
consolidating schedules for
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each of Holdings and its Subsidiaries (including, without limitation, the
Borrower) with respect to each of the financial statements contained therein, or
(ii) a copy of the unaudited consolidated balance sheet of Holdings and its
Subsidiaries (including, without limitation, the Borrower) as of the end of such
quarter and the related consolidated statements of income or operations,
shareholders' equity and cash flows and quarterly operating budgets for the
period commencing on the first day and ending on the last day of such quarter,
together with unaudited consolidating schedules for Holdings and its
Subsidiaries (including, without limitation, the Borrower) with respect to each
of such financial statements and quarterly operating budgets, in each case
setting forth in comparative form the information or figures and quarterly
operating budget figures, respectively, for the corresponding period of the
preceding fiscal year, and certified by an appropriate Responsible Officer of
Holdings as fairly presenting, in accordance with GAAP, the financial position
and the results of operations of Holdings and its Subsidiaries (including,
without limitation, the Borrower) (except for year-end adjustments and financial
statement footnotes required by GAAP);
(c) Compliance Certificate. Concurrently with the delivery of each of
the financial statements referred to in Sections 8.1(a) and 8.1(b), a Compliance
Certificate of a Responsible Officer of the Borrower substantially in the form
of Exhibit D hereto, appropriately completed, stating that, to the best of such
officer's knowledge, no Default has occurred and is continuing or, if a Default
has occurred and is continuing, stating the nature thereof and the action that
has been taken and is proposed to be taken with respect thereto;
(d) Notice of Actions, Suits, Investigations or Proceedings. Promptly
after the commencement thereof, notice of all actions, suits, investigations and
proceedings in any court or before any arbitrator or mediator or before or by
any Governmental Authority (including the FCC) (whether or not any Governmental
Authority is a party thereto) affecting any Loan Party or any License or Permit,
which, if determined adversely to any Loan Party, could reasonably be expected
to have a Material Adverse Effect;
(e) Notice of Default, etc. As soon as possible and in any event within
three Business Days after the Borrower's initial knowledge of the occurrence of
any Default, a written notice setting forth the details of such Default and the
action that the Borrower has taken and, if and to the extent known, proposes to
take with respect thereto;
(f) [INTENTIONALLY OMITTED.]
(g) Insurance. On or before March 31st of each fiscal year of the
Borrower, a report in reasonable detail summarizing all material insurance
coverage maintained by the Borrower with respect to the Collateral as of the
date of such report and all material insurance coverage planned to be maintained
by the Borrower with respect to the Collateral in the subsequent fiscal year;
(h) Business Plan, etc. Not later than 30 days after the end of each
fiscal quarter, an update of the Business Plan for the immediately succeeding
fiscal quarter in reasonable detail generally consistent with the form and
substance of the Business Plan provided to the Administrative Agent on or before
the Closing Date, which update shall reflect the corresponding information for
the prior fiscal quarter; and, promptly upon the Borrower's preparation thereof,
any proposed amendment, modification or supplement to the Business Plan;
CREDIT AGREEMENT - Page 56
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and, not later than 45 days after the consummation of the Holdings Merger, a
revised Business Plan for the succeeding two fiscal years assuming consummation
of the Holdings Merger and related transactions (including, if applicable, any
anticipated material changes to the businesses, assets or operations of the
Borrower in connection with the Holdings Merger) in reasonable detail generally
consistent with the form and substance of the Business Plan provided to the
Administrative Agent on or before the Closing Date, which revised Business Plan
shall reflect the corresponding information for the prior fiscal periods;
(i) Management Letters. Promptly upon each receipt thereof by any Loan
Party, a copy of any management letter or other written report submitted to such
Loan Party by independent certified public accountants with respect to the
business, financial condition, operations or Properties of any Loan Party;
(j) Notice of Material Adverse Effect. Within two Business Days after
the Borrower becomes aware thereof, written notice of any matter that could
reasonably be expected to have a Material Adverse Effect; and
(k) Environmental Assessments and Notices. Promptly after the receipt
thereof, a copy of each environmental assessment (including any analysis
relating thereto) prepared with respect to any owned or leased Property of any
Loan Party and each notice sent by any Governmental Authority relating to any
failure or alleged failure to comply with any Environmental Law or any liability
with respect thereto.
Section 8.2 Maintenance of Existence; Conduct of Business. The Borrower
will, and will cause each Loan Party to, preserve and maintain its entity
existence and all of its leases, privileges, Licenses, Permits, franchises,
qualifications, Intellectual Property, intangible Property and contract and
other rights that are necessary or appropriate in the ordinary conduct of its
business, except where failure to so preserve or maintain could not reasonably
be expected to have a Material Adverse Effect. Without limiting the generality
of the foregoing, each of the Loan Parties has entered into, or will timely
enter into, such long-distance carrier and interconnection agreements as are, at
any time of determination, then necessary to the conduct of its business in
accordance with the Business Plan except to the extent that the failure to do so
could not reasonably be expected to cause a Material Adverse Effect.
Section 8.3 Maintenance of Properties and Permits. The Borrower will,
and will cause each Loan Party to, maintain, keep and preserve all of its
Properties, Licenses and Permits necessary or appropriate in the proper conduct
of its businesses in good repair, working order and condition (ordinary wear and
tear excepted) and make all necessary repairs, renewals and replacements and
improvements thereof, except where failure to so maintain, keep or preserve, or
failure to so make, could not reasonably be expected to have a Material Adverse
Effect.
Section 8.4 Taxes and Claims. The Borrower will, and will cause each
Loan Party to, pay or discharge before becoming delinquent (a) all taxes,
levies, assessments and governmental charges imposed on it or its income or
profits or any of its Property and (b) all lawful claims for labor, material and
supplies, which, if unpaid, might become a Lien upon any of its Property;
provided, however, that neither the Borrower nor any Loan Party shall be
required to pay or discharge any tax, levy, assessment or governmental charge,
or claim for labor, material or supplies, whose amount, applicability or
validity is being contested in good faith by appropriate
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proceedings being diligently pursued and for which adequate reserves have been
established under GAAP.
Section 8.5 Insurance.
(a) The Borrower shall at all times keep all of its and its
Subsidiaries' Properties which are of an insurable nature insured with insurers,
believed by the Borrower to be responsible, against loss or damage to the extent
the Properties of similar character are usually so insured by companies
similarly situated and owning like Properties. The Borrower shall purchase and
maintain in effect all-risk, property and casualty insurance (including casualty
insurance covering earthquake and flood damage) reasonably acceptable and in
amounts reasonably acceptable to the Administrative Agent covering all
Collateral and other equipment related to the Network and liability insurance
covering the operations of the Borrower and its Subsidiaries. All insurance
relating to the Collateral shall be written by financially responsible companies
selected by the Borrower and having an A.M. Best Rating of "A-" or better and
being in a financial size category of "VI" or larger, or by other companies
reasonably acceptable to the Administrative Agent. On or before the Closing
Date, the Borrower shall (a) cause each policy of casualty insurance referred to
in this Section 8.5 relating to the Collateral to name the Administrative Agent
as loss payee (with respect to the Collateral only) and to provide that such
policy will not be canceled, amended or reduced except after not less than 30
days' prior written notice to the Administrative Agent and to also provide that
the interests of the Administrative Agent thereunder shall not be invalidated or
reduced by any act, omission or negligence of the Borrower or any of its
Subsidiaries and (b) cause to be delivered to the Borrower appropriate
certificates of insurance or endorsements to each such policy of insurance
evidencing compliance with clause (a) preceding. The Borrower will advise the
Administrative Agent promptly of any policy cancellation, reduction or amendment
relating to the Collateral. Subject to Section 8.5(b), Insurance Recoveries
under any such policy of insurance relating to the Collateral shall be paid to
the Administrative Agent as its interests may appear.
(b) The Borrower will cause each Insurance Recovery (other than any
portion of an Insurance Recovery payable to a landlord to repair or replace
Property leased by the Borrower or any of its Subsidiaries) relating to any
Collateral payable by any insurance company to be deposited promptly with the
Administrative Agent as security for the Obligations if a Default has then
occurred and is continuing, and will promptly pay all such Insurance Recoveries
to the Administrative Agent for application against the Obligations if and to
the extent required in accordance with Section 2.7(a); provided, however, if no
Default has then occurred and is continuing and if no prepayment obligation
exists pursuant to Section 2.7(a), then the Administrative Agent shall, upon
receipt thereof, promptly deliver the proceeds of such Insurance Recoveries to
the Borrower.
(c) If a Default shall have occurred and be continuing, the Borrower
will cause all proceeds of insurance paid on account of the loss of or damage to
any Collateral and all awards of compensation for any Collateral taken by
condemnation or eminent domain to be promptly paid directly to the
Administrative Agent to be applied against or held as security for the
Obligations, at the election of the Administrative Agent and the Required
Lenders.
Section 8.6 Inspection Rights. The Borrower will, and will cause each
of the Loan Parties to, permit representatives and agents of the Administrative
Agent and the Lenders, during
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normal business hours and upon at least five Business Days' prior notice to the
Borrower, to examine, copy and make extracts from its books and records, to
visit and inspect its Properties and to discuss its business, operations and
financial condition with its officers and independent certified public
accountants; provided, however, that the same may not occur more than once
during any calendar quarter unless an Event of Default has then occurred and is
continuing. The Administrative Agent or its representatives may, at any time and
from time to time at the Borrower's reasonable expense, conduct field exams for
such purposes as the Administrative Agent may reasonably request.
Section 8.7 Keeping Books and Records. The Borrower will, and will
cause each of the Loan Parties to, maintain appropriate books of record and
account in accordance with GAAP consistently applied in which true, full and
correct entries will be made of all their respective dealings and business
affairs. If any changes in accounting principles from those used in the
preparation of the financial statements referenced in Section 8.1 are hereafter
required or permitted by GAAP and are adopted by Holdings or the Borrower (as
applicable) and such changes in GAAP result in a change in the method of
calculation or the interpretation of any of the covenants or standards contained
in this Agreement, the Borrower and the Required Lenders agree to amend any such
affected covenants or standards so as to reflect such changes in GAAP with the
result that the criteria for evaluating the financial condition or performance
of the Loan Parties shall be the same after such changes in GAAP as if such
changes in GAAP had not been made.
Section 8.8 Compliance with Laws. The Borrower will, and will cause
each of the Loan Parties to, comply in all material respects with all
Governmental Requirements applicable to the operation of its business
(including, without limitation, the Communications Act, any rule or regulation
of the FCC or any rule or regulation of any federal or state public utility
commission or other Governmental Authority), except for instances of
noncompliance that could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 8.9 Maintenance of and Compliance with Agreements. The Borrower
will, and will cause each of the Loan Parties to, comply with all agreements,
documents and instruments binding on it or affecting its Properties or business,
including, without limitation, all Material Contracts, except for instances of
noncompliance that could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 8.10 Further Assurances. The Borrower will execute and deliver
and will cause each of the Loan Parties to execute and deliver such further
agreements and documents (including, without limitation, Security Agreements,
financing statements and amendments to financing statements specifying each item
of the Collateral and the serial number therefor) and take such further actions
as may be reasonably necessary or appropriate and as may be reasonably requested
by the Administrative Agent to carry out the terms and provisions and purposes
of this Agreement and the other Loan Documents, to evidence the Obligations and
to create, preserve, maintain and perfect the Liens of the Administrative Agent
for the benefit of itself and the Lenders in and to the Collateral and the
required priority of such Liens. Without limiting the generality of the
foregoing, the Borrower will, and will cause each of the Loan Parties to, (a)
take all necessary actions to and otherwise ensure that, at all times, the
Obligations will rank senior in respect of priority of payment to any
Subordinated Debt (to the extent of the subordination provisions in the
Subordinated Debt Documents governing such Subordinated
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Debt) and will rank at least pari passu in respect of priority of treatment with
all other present and future Debt of the Borrower (excluding rights of secured
parties with respect to Permitted Liens) and (b) take all necessary actions to
and otherwise ensure that, at all times, the indebtedness, liabilities and
obligations of Holdings under the Guaranty executed by Holdings will rank at
least pari passu in respect of priority of treatment with all other present and
future Debt of Holdings (excluding rights of secured parties with respect to
Permitted Liens).
Section 8.11 ERISA. The Borrower will, and will cause each of its ERISA
Affiliates to, comply with all minimum funding requirements and all other
material requirements of ERISA so as not to give rise to any material liability
thereunder.
Section 8.12 Non-Consolidation. The Borrower will, and will cause each
other Loan Party to: (a) maintain entity records and books of account separate
from those of any other entity which is an Affiliate of such Loan Party; (b) not
commingle its funds or assets with those of any other entity which is an
Affiliate of such Loan Party except in the ordinary course of business and
consistent with past practices of the Borrower so long as the funds or assets of
the Borrower are readily identifiable notwithstanding such commingling; and (c)
provide that its board of directors or other analogous governing body will hold
all appropriate meetings to authorize and approve such Person's entity actions.
Section 8.13 Year 2000 Compliance. Except for such instances as
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect, the Borrower will ensure that all of the material
computer software, computer hardware (whether general or special purpose), and
other similar or related items of automated, computerized or software systems
that are used or relied upon by the Borrower or any Loan Party in the conduct of
its business are and will continue to be substantially Year 2000 Compliant and,
without limiting the generality of the foregoing, will not (to any material
extent) malfunction, will not (to any material extent) cease to function, will
not (to any material extent) generate incorrect data and will not (to any
material extent) produce incorrect results when processing, providing or
receiving (a) date-related data into and between the twentieth and twenty-first
centuries and (b) date-related data in connection with any valid date in the
twentieth and twenty-first centuries. The Borrower will promptly notify the
Administrative Agent in the event the Borrower discovers or determines that its
computer applications (including those of its suppliers and vendors) that are
material to its or any Loan Party's business and operations will not be Year
2000 Compliant on a timely basis.
Section 8.14 Delivery of Certain Amendments. The Borrower will, and
will cause each other Loan Party to, promptly deliver to the Administrative
Agent any amendment, modification or supplement to the certificate of
incorporation, articles of incorporation, certificate of formation, articles of
organization, bylaws, operating agreement, regulations or other constitutional
documents of the Borrower or any other Loan Party; provided, however, that any
such amendment, modification or supplement shall be subject to the provisions of
Section 9.14.
Section 8.15 Ownership of Telecommunications Assets and
Telecommunications Business; Holdings to Remain a Holding Company. The Borrower
and its Subsidiaries shall, at all times, own or lease (as lessee) all
Telecommunication Assets used or useful in the operation of the
Telecommunications Business of the Borrower and its Subsidiaries.
Notwithstanding anything to the contrary contained in this Section 8.15,
however, Holdings may be the lessee with respect to certain leases of real
Property relating to premises occupied by the Borrower or
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premises on which certain personal Property of the Borrower is located and
Holdings may continue to be the "customer" under that certain Facilities
Management Agreement dated as of July 31, 1999, between International Career
Information, Inc. and Holdings.
ARTICLE 9
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder, it
will perform and observe, or cause to be performed and observed, the following
covenants:
Section 9.1 Debt. The Borrower will not, and will not permit any
Subsidiary of the Borrower to, incur, create, assume or permit to exist any
"Indebtedness" (as such term is defined in the Holdings Indenture or the
Holdings Exchange Indenture) except that the Borrower and any of its
Subsidiaries may incur, create, assume or permit to exist any "Indebtedness" (as
such term is defined in the Holdings Indenture or the Holdings Exchange
Indenture) permitted to be incurred in accordance with Section 1011 of the
Holdings Indenture or the Holdings Exchange Indenture, respectively, whether or
not the Holdings Exchange Indenture may be terminated or no longer be in effect.
Section 9.2 Limitation on Liens. The Borrower will not, and will not
permit any Subsidiary of the Borrower to, directly or indirectly, create, incur,
assume or suffer to exist any Lien or assign or otherwise convey any right to
receive income thereof, on any of its assets or Properties of any character
(including, without limitation, licenses and trademarks), or any shares of
Capital Stock or Debt of any Subsidiary, whether now owned or hereafter
acquired, or any income, profits or proceeds therefrom, except Permitted Liens;
provided, however, that no such Permitted Liens may attach to the Collateral
other than those Permitted Liens which are permitted to attach to the Collateral
in accordance with the definition of the term "Permitted Liens" contained in
Section 1.1. The Borrower will not, and will not permit any Subsidiary of the
Borrower to, enter into any negative pledge or similar arrangement in favor of
other creditors other than such negative pledge or similar arrangements (a)
under purchase money Debts, equipment financing arrangements or conditional
sale, title retention, consignment or similar arrangements for the sale of goods
entered into by the Borrower or any of its Subsidiaries in the ordinary course
of business or Capital Lease Obligations, in each case as permitted by this
Agreement and only with respect to the Properties financed or secured thereby
and (b) existing under this Agreement, the Holdings Indenture, the Holdings
Exchange Indenture and the Receivables Financing Agreement; provided, however,
that no such negative pledge or similar arrangement existing under the Holdings
Indenture, the Holdings Exchange Indenture and the Receivables Financing
Agreement shall prohibit or restrict the Liens on the Collateral securing the
Obligations.
Section 9.3 Mergers, etc. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) become a party to a merger or consolidation
(consummation of the Holdings Merger shall not be prohibited by virtue of this
clause (a)), (b) wind-up, dissolve or liquidate itself, or (c) purchase or
acquire all or a material or substantial part of the business or Properties of
any Person other than Holdings or the Borrower or any of their Subsidiaries if,
immediately after giving effect thereto, an Event of Default would exist;
provided, however, that any
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Subsidiary of the Borrower may merge with and into the Borrower or a
Wholly-Owned Subsidiary of the Borrower if the Borrower or a Wholly-Owned
Subsidiary of the Borrower is the surviving entity in such merger.
Section 9.4 Restricted Payments. The Borrower will not, and will not
permit any Subsidiary of the Borrower to, make any Restricted Payments, except
the following if and to the extent that the same are not prohibited by the
Holdings Indenture or the Holdings Exchange Indenture:
(a) the Borrower may make payments with respect to any Subordinated
Debt (if any) as permitted by the express terms of the Subordinated Debt
Documents governing such Subordinated Debt;
(b) Subsidiaries of the Borrower may make Restricted Payments to the
Borrower or any other Subsidiary of the Borrower or any other shareholder of
such Subsidiaries;
(c) the Borrower and its Subsidiaries may make temporary loans or
advances to employees, officers and directors of any of the Loan Parties or any
of their Subsidiaries in the ordinary course of business; and
(d) the Borrower and its Subsidiaries may make loans or advances, and
payments of principal and/or accrued interest with respect thereto, to one
another and to Holdings and its Subsidiaries;
provided, however, that so long as the Holdings Indenture or the Holdings
Exchange Indenture prohibits any restriction upon Restricted Payments contained
in this Section 9.4, then such restrictions shall not apply until on and after
the date upon which a Default has occurred and is continuing under Section 10.1,
Section 10.2, Section 10.3 or Section 10.4 of this Agreement.
Section 9.5 [Intentionally omitted.].
Section 9.6 Limitation on Issuance of Capital Stock. The Borrower will
not, and will not permit any of its Subsidiaries to, at any time after the
Closing Date, issue, sell, assign or otherwise dispose of (a) any of its Capital
Stock, (b) any securities exchangeable for or convertible into or carrying any
rights to acquire any of its Capital Stock, or (c) any option, warrant or other
right to acquire any of its Capital Stock, in each case to any Person other than
(i) Holdings (with respect to Capital Stock of the Borrower) or (ii) the
Borrower or Holdings (in each case with respect to Capital Stock of any of the
Subsidiaries of the Borrower) or (iii) a Subsidiary of the Borrower or Holdings
(or, in the case of FaciliCom International Sweden AB, an unrelated entity) that
is currently a shareholder of another Subsidiary of the Borrower (with respect
to Capital Stock of a Subsidiary of a Subsidiary of the Borrower or Holdings).
Section 9.7 Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary of the Borrower to, enter into any transaction,
including, without limitation, the purchase, sale or exchange of Property or the
rendering of any service, with any Affiliate of the Borrower except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arms-length transaction
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with a Person not an Affiliate of the Borrower; provided, however, that
transactions between or among the Borrower and one or more of its Subsidiaries
or Affiliates may be on terms more favorable to the Borrower or Holdings or any
Subsidiary of the Borrower or Holdings than would be obtained in a comparable
arms-length transaction with a Person not an Affiliate of the Borrower or
Holdings.
Section 9.8 Disposition of Property. The Borrower will not, and will
not permit any Subsidiary of the Borrower to, sell, lease, assign, transfer or
otherwise dispose of any of its Property (including, without limitation, the
Nortel Networks Equipment and the Nortel Networks Software), except:
(a) dispositions of inventory, other than equipment, in the ordinary
course of business, and expenditures of money (including, without limitation,
money held in deposit accounts) made in the ordinary course of business or for
the purpose of making Restricted Payments permitted in accordance with this
Agreement or investments permitted in accordance with the Holdings Indenture or
the Holdings Exchange Indenture;
(b) Asset Dispositions of Property, other than U.S. Nortel Networks
Equipment constituting Collateral, by the Borrower made in the ordinary course
of business if each of the following conditions have been satisfied: (i) the
Borrower or its Subsidiary (as applicable) receives fair consideration for such
Asset Dispositions and (ii) no Default exists at the time of or will result from
such Asset Disposition;
(c) Asset Dispositions of Property, other than U.S. Nortel Networks
Equipment constituting Collateral, by the Borrower or its Subsidiary to Holdings
or any Subsidiary of Holdings or the Borrower; and
(d) dispositions of Property no longer used or useful in the ordinary
course of business, including, without limitation, dispositions of equipment
(including defective equipment) being exchanged or replaced with comparable or
better equipment;
provided, however, that the Borrower will not sell, lease, assign, transfer or
otherwise dispose of any of the U.S. Nortel Networks Equipment constituting
Collateral without the prior written consent of the Required Lenders and Nortel
Networks; provided, further, however, that, prior to the occurrence and
continuation of an Event of Default, U.S. Nortel Networks Equipment constituting
Collateral no longer used or useful in the ordinary course of business may be
disposed of if (but only if) all Net Proceeds thereof are paid to the
Administrative Agent in compliance with Section 2.7(a).
Section 9.9 [INTENTIONALLY OMITTED.]
Section 9.10 [INTENTIONALLY OMITTED.]
Section 9.11 Environmental Protection. The Borrower will not, and will
not permit any Loan Party to, (a) use (or permit any tenant to use) any of its
Properties for the handling, processing, storage, transportation or disposal of
any Hazardous Material except in compliance with applicable Environmental Laws,
(b) generate any Hazardous Material except in compliance with applicable
Environmental Laws, (c) conduct any activity that is likely to cause a Release
or
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threatened Release of any Hazardous Material in violation of any Environmental
Law, or (d) otherwise conduct any activity or use any of its Properties in any
manner, that violates or is likely to violate any Environmental Law or create
any Environmental Liabilities for which the Borrower or any Loan Party would be
responsible, except for circumstances or events described in clauses (a) through
(d) preceding that could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
Section 9.12 Intercompany Transactions. Except as may be expressly
permitted or required by (a) the Loan Documents, (b) the Holdings Senior Notes
Documents as in effect on the Closing Date or, if the Holdings Exchange
Indenture becomes effective, the Holdings Exchange Senior Notes Documents in the
form existing on the Closing Date or (c) the Receivables Financing Documents as
in effect on the Closing Date, the Borrower will not, and will not permit
Holdings or any Subsidiary of the Borrower or Holdings to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any such Person to (i) pay dividends
or make any other distribution to the Borrower or any of its Subsidiaries in
respect of such Subsidiary's Capital Stock or with respect to any other interest
or participation in, or measured by, its profits, (ii) pay any indebtedness owed
to the Borrower or any of its Subsidiaries, (iii) make any loan or advance or
capital contribution to the Borrower or any of its Subsidiaries, (iv) sell,
lease or transfer any of its Property to the Borrower or any of its
Subsidiaries, or (v) grant any Lien on any of its Properties.
Section 9.13 Master Purchase Agreement. The Borrower will not terminate
the Master Purchase Agreement dated as of January 1, 1998 prior to the
satisfaction in full of the Borrower's purchase commitments thereunder.
Section 9.14 Modification of Certain Agreements. The Borrower will not,
and will not permit any Loan Party to, consent to or implement any termination,
amendment, modification, supplement or waiver of (a) the certificate of
incorporation, articles of incorporation, certificate of formation, articles of
organization, bylaws, operating agreement, regulations or other constitutional
documents of the Borrower or any other Loan Party or (b) the Business Plan
(except in accordance with Section 10.5); provided, however, that the Loan
Parties may amend or modify (i) the documents referred to in clause (a)
preceding if and to the extent that such amendment or modification is not
substantive or material and could not reasonably be expected to be adverse to
any Loan Party, the Administrative Agent or any Lender, provided, however, that
none of such documents referred to in clause (a) preceding may be amended or
modified as they relate to, in any way, any capital contribution to the Borrower
or any obligation or agreement relating thereto, and (ii) the Business Plan
referred to in clause (b) preceding if and to the extent that such amendment or
modification could not reasonably be expected to be materially adverse to any
Loan Party, the Administrative Agent or any Lender.
Section 9.15 ERISA. The Borrower will not, and will not permit any Loan
Party to:
(a) allow, or take (or permit any ERISA Affiliate to take) any action
which would cause, any unfunded or unreserved liability for benefits under any
Plan (exclusive of any Multiemployer Plan) to exist or to be created that could
reasonably be expected to have a Material Adverse Effect; or
(b) with respect to any Multiemployer Plan, allow, or take (or permit
any ERISA
CREDIT AGREEMENT - Page 64
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Affiliate to take) any action which would cause, any unfunded or unreserved
liability for benefits under any Multiemployer Plan to exist or to be created,
either individually as to any such Plan or in the aggregate as to all such
Plans, that could, upon any partial or complete withdrawal from or termination
of any such Multiemployer Plan or Plans, have a Material Adverse Effect.
ARTICLE 10
Financial Covenants
Section 10.1 Annualized EBITDA. The Borrower will not permit Annualized
EBITDA of Holdings and its Consolidated Subsidiaries (including, without
limitation, the Borrower) at the end of any of the fiscal quarters set forth on
Schedule 10.1 to be less than the amount set forth opposite such date on such
Schedule.
Section 10.2 Fixed Charge Coverage. The Borrower will not permit the
ratio of (a) Annualized EBITDA of Holdings and its Consolidated Subsidiaries
(including, without limitation, the Borrower) during any of the fiscal quarters
ending on any of the dates set forth on Schedule 10.2 to (b) Consolidated Fixed
Charges of Holdings and its Consolidated Subsidiaries (including, without
limitation, the Borrower) for the four fiscal quarter period ending on such
date, to be less than the ratio set forth opposite such date on such Schedule.
Section 10.3 Gross Revenues. The Borrower will not permit the Gross
Revenues of Holdings and its Consolidated Subsidiaries (including, without
limitation, the Borrower) for any of the fiscal quarters ending on any of the
dates set forth on Schedule 10.3 to be less than the amount set forth opposite
such date on such Schedule.
Section 10.4 Minutes of Use. The Borrower will not permit the Minutes
of Use for any of the fiscal quarters ending on any of the dates set forth on
Schedule 10.4 to be less than the amount set forth opposite such date on such
Schedule.
Section 10.5 Revision of Financial Covenants. The Borrower shall, not
later than 45 days after consummation of the Holdings Merger, submit a revised
Business Plan to the Administrative Agent which shall be reasonably acceptable
to the Administrative Agent. The Borrower agrees that the Administrative Agent
may, effective concurrently with consummation of the Holdings Merger or
thereafter, unilaterally amend each of the covenants set forth in Sections 10.1,
10.2, 10.3 and 10.4 by the giving of written notice of such amended covenants to
the Borrower; provided, however, that each of such amended covenants shall be
based upon 85% of such revised Business Plan; provided, further, however, that
each of such amended covenants shall not be less protective of the
Administrative Agent and the Lenders than the covenants set forth in Sections
10.1, 10.2, 10.3 and 10.4, respectively
ARTICLE 11
Default
Section 11.1 Events of Default. Each of the following shall be deemed
an "Event of Default":
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(a) (i) The Borrower shall fail to pay, repay or prepay when due, any
amount of principal owing to the Administrative Agent or any Lender pursuant to
this Agreement or any other Loan Document, (ii) the Borrower shall fail to pay,
within two Business Days after the due date thereof, any interest owing to the
Administrative Agent or any Lender pursuant to this Agreement or any other Loan
Document, or (iii) the Borrower shall fail to pay, within five Business Days
after any request therefor made to the Borrower by the applicable payee thereof,
any fee, expense or other amount or other Obligation owing to the Administrative
Agent or any Lender pursuant to this Agreement or any other Loan Document.
(b) Any representation or warranty made or deemed made by or on behalf
of any Loan Party in any Loan Document or in any certificate, report, notice or
financial statement furnished at any time in connection with this Agreement or
any other Loan Document shall be false, misleading or erroneous in any material
respect when made or deemed to have been made.
(c) Any Loan Party shall fail to perform, observe or comply with any
covenant, agreement or term contained in Section 5.1, 8.2 (the first sentence of
8.2 only), Article 9 or Article 10 (other then Section 10.5); any Loan Party
shall fail to perform, observe or comply with any covenant, agreement or term
contained in Article 5 or Section 8.1, 8.3, 8.5, 8.6, 8.7, 8.8, 8.10, 8.15 or
Section 10.5 and such failure is not remedied or waived within ten Business Days
after such failure commenced; or any Loan Party shall fail to perform, observe
or comply with any other covenant, agreement or term contained in this Agreement
or any other Loan Document (other than covenants to pay the Obligations) and
such failure is not remedied or waived within the earlier to occur of 30 days
after such failure commenced or, if a different grace period is expressly made
applicable in such other Loan Documents, such applicable grace period.
(d) Any of (i) Holdings and its Subsidiaries on a consolidated basis or
(ii) the Borrower and its Subsidiaries on a consolidated basis, ceases to be
Solvent.
(e) Any Loan Party shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee, liquidator
or administrator of itself or of all or a substantial part of its Property, (ii)
admit in writing its inability to, or be generally unable to, pay its debts as
such debts become due, subject to any applicable grace periods, (iii) make a
general assignment for the benefit of its creditors, (iv) commence a voluntary
case under the United States Bankruptcy Code (as now or hereafter in effect, the
"Bankruptcy Code"), (v) file a petition seeking to take advantage of any other
law providing for the relief of debtors or relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding up, or
composition or readjustment of debts, (vi) fail to controvert in a timely or
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under the Bankruptcy Code or other applicable Governmental
Requirement, (vii) dissolve, or (viii) take any entity action for the purpose of
effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the application or
consent of any Loan Party, in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, arrangement, winding up, or
composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, examiner, liquidator, administrator or the like of it or of
all or any substantial part of its Property, or (iii) similar relief in respect
of it, under any law providing for the relief of debtors or relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or
winding up, or composition or
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readjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 60 or more days;
or an order for relief shall be entered in an involuntary case under the
Bankruptcy Code against any Loan Party and shall continue unstayed and in effect
for any period of 60 consecutive days.
(g) Any Loan Party shall fail to discharge within a period of 30 days
after the commencement thereof any attachment, sequestration, forfeiture or
similar proceeding or proceedings involving an aggregate amount in excess of
$5,000,000 against any of its Properties.
(h) A final judgment or judgments for the payment of money in excess of
$5,000,000 in the aggregate shall be rendered by a court or courts against any
Loan Party on claims not covered by insurance and the same shall not be
discharged, bonded or a stay of execution thereof shall not be procured, within
30 days from the date of entry thereof and any Loan Party shall not, within said
period of 30 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal.
(i) Any Loan Party shall fail to pay when due any principal of or
interest on any Debt of such Loan Party (other than the Obligations) having
(either individually or in the aggregate) a principal amount of at least
$10,000,000 or the maturity of any such Debt shall have been accelerated, or any
such Debt shall have been required to be prepaid prior to the stated maturity
thereof, or any event shall have occurred (and shall not have been waived or
otherwise cured) that permits (or, with the giving of notice or lapse of time or
both, would permit) any holder or holders of such Debt or any Person acting on
behalf of such holder or holders to accelerate the maturity thereof or require
any such prepayment.
(j) This Agreement or any other Loan Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Loan Party or any
Loan Party shall deny that it has further liability or obligation under any of
the Loan Documents; or any Lien created or purported to be created by the Loan
Documents shall for any reason cease to be or fail to be a valid, first priority
perfected Lien upon any of the Collateral purported to be covered thereby.
(k) [INTENTIONALLY OMITTED.]
(l) The occurrence of any Material Adverse Effect.
(m) The occurrence of any Change in Control, other than a Change in
Control resulting solely from the Holdings Merger.
(n) If, at any time, the Borrower shall make any payment or prepayment
(in whatever form, whether payment, redemption, repurchase or other form) with
respect to any Subordinated Debt that does not comply with any term or provision
of this Agreement or any Subordinated Debt Document.
(o) If, at any time, (i) Holdings or a Subsidiary of Holdings shall
make any payment or prepayment (in whatever form, whether payment, redemption,
repurchase or other form) with
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respect to the Holdings Senior Notes or the Holdings Exchange Senior Notes,
other than (A) the exchange of the Holdings Senior Notes for the Holdings
Exchange Senior Notes pursuant to the Exchange Offer (and the payment or
prepayment, in whatever form, of the Holdings Senior Notes effectively resulting
from such exchange), (B) cash payments made by Holdings to holders of the
Holdings Senior Notes who accept the Exchange Offer in an amount not to exceed
$10.00 for each $1,000.00 of principal amount of the Holdings Senior Notes
exchanged for Holdings Exchange Senior Notes pursuant to the Exchange Offer, (C)
payments or prepayments of accrued interest with respect to the Holdings Senior
Notes in connection with the exchange of such notes pursuant to the Exchange
Offer or (D) payments of accrued interest with respect to the Holdings Senior
Notes and the Holdings Exchange Senior Notes in accordance with the Holdings
Indenture and the Holdings Exchange Indenture, respectively, or (ii) the
Borrower shall make any payment or prepayment (in whatever form, whether
payment, redemption, repurchase or other form) with respect to (A) any Debt of
the Borrower owed to Holdings, other than payments of accrued interest with
respect to such Debt, which accrued interest shall not exceed a market rate of
interest, or (B) any Debt of Holdings Guaranteed by the Borrower.
(p) The occurrence of any "Event of Default" as such term is defined in
the Holdings Indenture or the Holdings Exchange Indenture.
(q) The Borrower shall (i) pay or make any dividend or other
distribution (whether in cash, Property or obligations), direct or indirect, on
account of (or the setting apart of money for a sinking or other analogous fund
for) any shares of any class of Capital Stock of the Borrower now or hereafter
outstanding, except a dividend payable solely in shares of that class of stock
to the holders of that class, (ii) make any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of the
Borrower now or hereafter outstanding, or (iii) make any payment to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of the Borrower now or hereafter
outstanding.
Section 11.2 Remedies. If any Event of Default shall occur and be
continuing, the Administrative Agent may and, if directed by the Required
Lenders, the Administrative Agent shall do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and accrued and
unpaid interest on the Loans and all other amounts payable by the Borrower under
the Loan Documents immediately due and payable, and the same shall thereupon
become immediately due and payable, without notice, demand, presentment, notice
of dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower;
(b) Termination of Commitments. Terminate each of the Commitments
without notice to the Borrower or any other Loan Party;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to the
Administrative Agent for the benefit of the Administrative Agent and the Lenders
to secure payment and performance of the Obligations in accordance with the
terms of the Loan Documents; or
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(e) Rights. Exercise any and all rights and remedies afforded by the
laws of the State of New York or any other jurisdiction, by any of the Loan
Documents, by equity or otherwise;
provided, however, that upon the occurrence of an Event of Default under Section
11.1(e) or Section 11.1(f), the Commitments of all of the Lenders shall
immediately and automatically terminate, and the outstanding principal of and
accrued and unpaid interest on the Loans and all other amounts payable by the
Borrower under the Loan Documents shall thereupon become immediately and
automatically due and payable, without notice, demand, presentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate, protest or
other formalities of any kind, all of which are hereby expressly waived by the
Borrower.
Section 11.3 Performance by the Administrative Agent, etc. If the
Borrower shall fail to perform any covenant or agreement in accordance with the
terms of the Loan Documents, the Administrative Agent may perform or attempt to
perform, or may cause any Lender (with the consent of such Lender) to perform or
attempt to perform, such covenant or agreement on behalf of the Borrower. In
such event, the Borrower shall, at the request of the Administrative Agent,
promptly pay any reasonable amount expended by the Administrative Agent or the
Lenders in connection with such performance or attempted performance to the
Administrative Agent at its Principal Office, together with interest thereon at
the applicable Default Rate from and including the date of such expenditure to
but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Administrative Agent nor any
Lender shall have any liability or responsibility for the performance of any
obligation of the Borrower or any other Person under this Agreement or any of
the other Loan Documents.
ARTICLE 12
The Administrative Agent
Section 12.1 Appointment, Powers and Immunities. Each Lender hereby
irrevocably appoints and authorizes the Administrative Agent to act as its agent
hereunder and under the other Loan Documents with such powers as are
specifically delegated to the Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Neither the Administrative Agent nor any of its
Affiliates, officers, directors, employees, attorneys or agents shall be liable
for any action taken or omitted to be taken by any of them hereunder or
otherwise in connection with this Agreement or any of the other Loan Documents
except for its or their own gross negligence or willful misconduct. Without
limiting the generality of the preceding sentence, the Administrative Agent (a)
may treat the payee of any Note as the holder thereof until the Administrative
Agent receives written notice of the assignment or transfer thereof signed by
such payee and in form satisfactory to the Administrative Agent, (b) shall have
no duties or responsibilities except those expressly set forth in this Agreement
and the other Loan Documents, and shall not by reason of this Agreement or any
other Loan Document be a trustee or fiduciary for any Lender, (c) shall not be
required to initiate any litigation or collection proceedings hereunder or under
any other Loan Document except to the extent requested by the Required Lenders,
(d) shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement or any other Loan
Document,
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or any certificate or other document referred to or provided for in, or received
by any of them under, this Agreement or any other Loan Document, or for the
value, validity, effectiveness, enforceability or sufficiency of this Agreement
or any other Loan Document or any other document referred to or provided for
herein or therein or for any failure by any Person to perform any of its
obligations hereunder or thereunder, (e) may consult with legal counsel
(including counsel for the Borrower), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts, and (f) shall incur no liability under or in respect of
any Loan Document by acting upon any notice, consent, certificate or other
instrument or writing reasonably believed by it to be genuine and signed or sent
by the proper party or parties. As to any matters not expressly provided for by
this Agreement, the Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Lenders, and such instructions of the
Required Lenders and any action taken or failure to act pursuant thereto shall
be binding on all of the Lenders; provided, however, that the Administrative
Agent shall not be required to take any action which exposes the Administrative
Agent to liability or which is contrary to this Agreement or any other Loan
Document or applicable law. The Administrative Agent shall not be deemed to have
any fiduciary relationship with any Lender or any Loan Party, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
Without limiting the generality of the foregoing, the use of the term "agent" in
this Agreement with respect to the Administrative Agent is not intended to
connote any fiduciary or other express or implied obligation arising under
agency doctrine of any applicable law; instead, such term is used merely as a
matter of market custom and is intended to create or reflect only an
administrative relationship among independent contracting parties.
Section 12.2 Rights of Administrative Agent as a Lender. With respect
to its Commitments, the Loans made by it and the Note(s) issued to it, Nortel
Networks (and any successor acting as Administrative Agent) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. The Administrative Agent and its Affiliates may (without having to
account therefor to any Lender) accept deposits from, lend money to, act as
trustee under indentures of, provide merchant banking services to, own
securities of, and generally engage in any kind of banking, trust or other
business with, the Borrower or any of its Affiliates and any other Person who
may do business with or own securities of the Borrower or any of its Affiliates,
all as if it were not acting as the Administrative Agent and without any duty to
account therefor to the Lenders.
Section 12.3 Defaults. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default (other than the
non-payment of principal of or interest on the Loans or of commitment fees)
unless the Administrative Agent has received notice from a Lender or the
Borrower specifying such Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice of
the occurrence of a Default, the Administrative Agent shall give prompt notice
thereof to the Lenders (and shall give each Lender prompt notice of each such
non-payment). The Administrative Agent shall (subject to Section 12.1) take such
action with respect to such Default as shall be directed by the Required
Lenders, provided that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to
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such Default as it shall seem advisable and in the best interest of the Lenders.
SECTION 12.4 INDEMNIFICATION. EACH LENDER HEREBY AGREES TO INDEMNIFY
THE ADMINISTRATIVE AGENT FROM AND HOLD THE ADMINISTRATIVE AGENT HARMLESS AGAINST
(TO THE EXTENT NOT REIMBURSED UNDER SECTIONS 13.1 AND 13.2, BUT WITHOUT LIMITING
THE OBLIGATIONS OF THE BORROWER UNDER SECTIONS 13.1 AND 13.2), RATABLY IN
ACCORDANCE WITH ITS PRO RATA SHARE (CALCULATED ON THE BASIS OF ITS COMMITMENT
PERCENTAGE OF THE COMMITMENTS), ANY AND ALL LIABILITIES (INCLUDING, WITHOUT
LIMITATION, ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING ATTORNEYS'
FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST THE ADMINISTRATIVE AGENT IN ANY WAY RELATING
TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO
BE TAKEN BY THE ADMINISTRATIVE AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN
DOCUMENTS; PROVIDED, FURTHER, THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF
THE FOREGOING TO THE EXTENT CAUSED BY THE ADMINISTRATIVE AGENT'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE
EXPRESS INTENTION OF THE LENDERS THAT THE ADMINISTRATIVE AGENT SHALL BE
INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH LIABILITIES
(INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES
(INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR
INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE
OF THE ADMINISTRATIVE AGENT (EXCEPT TO THE EXTENT THE SAME ARE CAUSED BY THE
ADMINISTRATIVE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT). WITHOUT LIMITING
ANY OTHER PROVISION OF THIS SECTION 12.4, EACH LENDER AGREES TO REIMBURSE THE
ADMINISTRATIVE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON
THE BASIS OF ITS COMMITMENT PERCENTAGE OF THE COMMITMENTS) OF ANY AND ALL
OUT-OF-POCKET EXPENSES (INCLUDING ATTORNEYS' FEES) INCURRED BY THE
ADMINISTRATIVE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION, DELIVERY,
ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT (WHETHER THROUGH
NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL ADVICE IN RESPECT OF
RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT THAT THE
ADMINISTRATIVE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH EXPENSES BY THE
BORROWER.
Section 12.5 Independent Credit Decisions. Each Lender agrees that it
has independently and without reliance on the Administrative Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Holdings, the Borrower and the
Subsidiaries of the Borrower and its own decision to enter into
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this Agreement and that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based upon such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any of the other Loan Documents. The Administrative Agent shall not be required
to keep itself informed as to the performance or observance by any Loan Party of
this Agreement or any other Loan Document or to inspect the Properties or books
of the Borrower (or any other Person). Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Administrative Agent hereunder or under the other Loan Documents, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other financial information concerning the affairs,
financial condition or business of any Loan Party which may come into the
possession of the Administrative Agent or any of its Affiliates.
Section 12.6 Several Commitments. The Commitments and other obligations
of the Lenders under this Agreement are several. The default by any Lender in
making a Loan in accordance with any of its Commitments shall not relieve the
other Lenders of their obligations under this Agreement. In the event of any
default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. In no event shall
any Lender be required to advance an amount or amounts with respect to any of
the Loans which would in the aggregate exceed such Lender's Commitment with
respect to such Loans. No Lender shall be responsible for any act or omission of
any other Lender.
Section 12.7 Successor Administrative Agent. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders will
have the right to appoint another Lender as a successor Administrative Agent. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders and shall have accepted such appointment within 30 days after the
retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the laws
of the U.S. or any state thereof or of a foreign country if acting through its
U.S. branch and having combined capital and surplus of at least $100,000,000.
Upon the acceptance of its appointment as successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all rights, powers, privileges, immunities and duties of the resigning
Administrative Agent, and the resigning Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any Administrative Agent's resignation as Administrative Agent,
the provisions of this Article 12 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was the
Administrative Agent. Each Administrative Agent (including each successor
Administrative Agent) agrees that, so long as it is acting as Administrative
Agent under this Agreement, it shall be a Lender under this Agreement.
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ARTICLE 13
Miscellaneous
Section 13.1 Expenses. The Borrower hereby agrees, on demand, to pay or
reimburse the Administrative Agent and each of the Lenders for paying: (a) all
reasonable out-of-pocket costs and expenses of the Administrative Agent incurred
in connection with the arranging, drafting, preparation, negotiation, execution
and delivery of the Loan Documents and in connection with any and all waivers,
amendments, modifications, renewals, extensions and supplements of or to the
Loan Documents, and the syndication of the Commitments and the Loans, including,
without limitation, the fees and expenses of legal counsel (including all local
counsel) for the Administrative Agent, (b) all out-of-pocket costs and expenses
of the Administrative Agent and the Lenders in connection with any Default, the
exercise of any right or remedy and the enforcement of this Agreement or any
other Loan Document or any term or provision hereof or thereof, including,
without limitation, the fees and expenses of all legal counsel for the
Administrative Agent and/or any Lender, provided, however, that (i) unless an
Event of Default has occurred and is continuing, all such costs and expenses of
the Administrative Agent and the Lenders to be paid or reimbursed by the
Borrower as referred to in this clause (b) shall be reasonable and (ii) all
Lenders and the Administrative Agent shall be limited to the legal fees and
expenses of one counsel for the Administrative Agent and all Lenders unless (A)
the Administrative Agent or any Lender determines in good faith that it has any
right, remedy or defense which is generally separate from those of the other of
the Administrative Agent or such Lenders or (B) such representation shall or
would result in a conflict-of-interest, in which case the Borrower shall,
subject to clause (i) preceding, pay the fees and expenses of all legal counsel
for the Administrative Agent and/or any Lender to the extent necessary or
appropriate, in the good faith determination of the Administrative Agent or such
Lender (as applicable), to the appropriate exercise of such right, remedy or
defense or to the appropriate avoidance of such conflict-of-interest,
respectively, (c) all transfer, stamp, documentary or Other Taxes levied by any
Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all costs, expenses, assessments and other charges incurred in
connection with any filing, registration, recording or perfection of any Lien
contemplated by this Agreement or any other Loan Document, and (e) all
reasonable out-of-pocket costs and expenses incurred by the Administrative Agent
in connection with due diligence, computer services, copying, appraisals,
environmental audits, collateral audits, field exams, insurance, consultants and
search reports.
SECTION 13.2 INDEMNIFICATION. THE BORROWER HEREBY AGREES TO INDEMNIFY
THE ADMINISTRATIVE AGENT AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND AGENTS (EACH AN
"INDEMNIFIED PARTY") FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL
LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES),
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES
(INCLUDING REASONABLE ATTORNEYS' AND CONSULTANTS' FEES) TO WHICH ANY OF THEM MAY
BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY
FORECLOSURE RIGHT OR OTHER RIGHT OR REMEDY WHETHER OR NOT SUCH EXERCISE IS IN
COMPLIANCE WITH LAWS AFFECTING OTHER PERSONS OR RESULTS IN DAMAGES PAYABLE TO
OTHER PERSONS, (B) ANY OF THE TRANSACTIONS
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CONTEMPLATED BY THE LOAN DOCUMENTS, (C) ANY BREACH BY ANY LOAN PARTY OF ANY
MATERIAL REPRESENTATION, WARRANTY, COVENANT OR OTHER AGREEMENT CONTAINED IN ANY
OF THE LOAN DOCUMENTS, (D) THE USE OF THE PROCEEDS OF ANY LOAN, (E) THE
PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL, REMOVAL OR CLEANUP OF ANY
HAZARDOUS MATERIAL LOCATED ON, WITHIN OR AFFECTING ANY OF THE PROPERTIES OF THE
BORROWER OR ANY OF ITS AFFILIATES CAUSED BY AN ACT OR OMISSION OF THE BORROWER
OR ANY OF ITS AFFILIATES, OR (F) ANY INVESTIGATION, LITIGATION OR OTHER
PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION,
LITIGATION OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BROUGHT
BY THE BORROWER, HOLDINGS, ANY CREDITOR OR ANY OTHER PERSON; PROVIDED, HOWEVER,
THAT, IF AND TO THE EXTENT THAT THE LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS OR EXPENSES TO BE INDEMNIFIED UNDER
THIS SECTION 13.3 ARE CAUSED BY THE GROSS NEGLIGENCE OR WILFUL MISCONDUCT OF AN
INDEMNIFIED PARTY, THEN THE INDEMNIFIED PARTIES SHALL NOT BE ENTITLED TO SUCH
INDEMNIFICATION UNDER THIS SECTION 13.3. WITHOUT LIMITING ANY PROVISION OF THIS
AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION 13.2 SHALL
BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES
(INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS AND EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE (AS OPPOSED TO GROSS NEGLIGENCE) OF SUCH PERSON. WITHOUT PREJUDICE TO
THE SURVIVAL OF ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, THE OBLIGATIONS
OF THE BORROWER UNDER THIS SECTION 13.2 SHALL SURVIVE THE REPAYMENT OF THE LOANS
AND OTHER OBLIGATIONS AND TERMINATION OF THE COMMITMENTS. NOTHING CONTAINED IN
THIS SECTION 13.3 SHALL BE CONSTRUED AS REQUIRING THE BORROWER TO INDEMNIFY
NORTEL NETWORKS INC. IN ITS CAPACITY AS VENDOR UNDER THE MASTER PURCHASE
AGREEMENT OR TO INDEMNIFY ANY OTHER INDEMNIFIED PARTY WITH RESPECT TO MATTERS
UNDER THE MASTER PURCHASE AGREEMENT.
Section 13.3 Limitation of Liability. None of the Administrative Agent,
any Lender or any Affiliate, officer, director, employee, attorney or agent
thereof shall be liable for any error of judgment or act done in good faith, or
be otherwise liable or responsible under any circumstances whatsoever (including
such Person's negligence), except for such Person's gross negligence or willful
misconduct. None of the Administrative Agent, any Lender or any Affiliate,
officer, director, employee, attorney or agent thereof shall have any liability
with respect to, and the Borrower hereby waives, releases and agrees not to xxx
any of them upon, any claim for any special, indirect, incidental or
consequential damages suffered or incurred by the Borrower or any Affiliate of
the Borrower in connection with, arising out of or in any way related to this
Agreement or any of the other Loan Documents, or any of the transactions
contemplated by this Agreement or any of the other Loan Documents. The Borrower
hereby waives, releases and
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agrees not to xxx the Administrative Agent or any Lender or any of their
respective Affiliates, officers, directors, employees, attorneys or agents for
exemplary or punitive damages in respect of any claim in connection with,
arising out of or in any way related to this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.
Section 13.4 No Duty. All attorneys, accountants, appraisers and other
professional Persons and consultants retained by the Administrative Agent and
the Lenders shall have the right to act exclusively in the interest of the
Administrative Agent and the Lenders and shall have no duty of disclosure, duty
of loyalty, duty of care or other duty or obligation of any type or nature
whatsoever to the Borrower or any of its Affiliates or any other Person.
Section 13.5 No Fiduciary Relationship. The relationship between the
Borrower and each Lender is solely that of debtor and creditor, and neither the
Administrative Agent nor any Lender has any fiduciary or other special
relationship with the Borrower or any of its Affiliates, (provided, however,
that the parties hereto acknowledge that there does exist a contractual
relationship between the Borrower and Nortel Networks pursuant to the Master
Purchase Agreement) and no term, provision or condition of any of the Loan
Documents shall be construed so as to deem the relationship between the Borrower
and any Lender, or such Affiliate and any Lender, to be other than that of
debtor and creditor. No joint venture or partnership is created by this
Agreement among the Lenders or among the Borrower or any of its Affiliates and
the Lenders.
Section 13.6 Equitable Relief. The Borrower recognizes that, in the
event it fails to pay, perform, observe or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the
Administrative Agent and the Lenders. The Borrower therefore agrees that the
Administrative Agent and the Lenders, if the Administrative Agent or the Lenders
so request, shall be entitled to temporary and permanent injunctive relief in
any such case without the necessity of proving actual damages.
Section 13.7 No Waiver; Cumulative Remedies. No failure on the part of
the Administrative Agent or any Lender to exercise and no delay in exercising,
and no course of dealing with respect to, any right, power or privilege under
this Agreement or any other Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege under this
Agreement or any other Loan Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided for in this Agreement and the other Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 13.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns. The Borrower may
not assign or transfer any of its rights or obligations under this Agreement or
any other Loan Document without the prior written consent of the Administrative
Agent and the Lenders. Any Lender may sell participations in all or a portion of
its rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitments and the
Loans owing to it); provided, however, that (i) such Lender's obligations under
this Agreement
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and the other Loan Documents (including, without limitation, its Commitments)
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
Borrower for the performance of such obligations, (iii) such Lender shall remain
the holder of its Notes for all purposes of this Agreement, (iv) the Borrower
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents, and (v) the Lenders shall not grant any participation under which the
participant shall have the right to approve (or under which the consent of the
participant must be obtained prior to the Lenders' being able to approve) any
amendment or waiver of this Agreement or the other Loan Documents, except to the
extent that such amendment or waiver (A) increases any Commitment, (B) reduces
the interest rate or the amount of principal or fees applicable to the Loans or
Commitments in which such participant is participating, (C) extends any Maturity
Date, (D) releases any of the Collateral (except as provided for herein or in
any other Loan Document) or any guaranty of the Obligations, or (E) releases any
Loan Party from its monetary Obligations under any of the Loan Documents.
(b) The Borrower and each of the Lenders agree that any Lender (the
"Assigning Lender") may at any time assign to one or more Eligible Assignees all
or any part of its rights and/or obligations under this Agreement and the other
Loan Documents (including, without limitation, its Commitments and/or Loans)
(each an "Assignee"); provided, however, that (i) each such assignment may be of
a varying percentage of the Assigning Lender's rights and/or obligations under
this Agreement and the other Loan Documents and may relate to some but not all
of such rights and/or obligations, (ii) except in the case of (A) an assignment
of all of a Lender's rights and obligations under this Agreement and the other
Loan Documents or (B) an assignment by a Lender to an Affiliate of such Lender,
to another Lender or to an Approved Fund, the amount of the Commitment(s) and/or
Loans of the Assigning Lender being assigned pursuant to each assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 calculated based upon the
aggregate amount of the Commitment(s) and/or Loans assigned and (iii) the
parties to each such assignment shall execute and deliver to the Administrative
Agent for its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with the Note subject to such assignment,
and a processing and recordation fee of $3,500. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in each
Assignment and Acceptance, which effective date shall be at least five Business
Days after the execution thereof or such other date as may be approved by the
Administrative Agent, (1) the Assignee thereunder shall be a party hereto as a
"Lender" and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and under the Loan Documents, and (2) the
Assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
and the other Loan Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of a Lender's rights and obligations under
the Loan Documents, such Lender shall cease to be a party thereto, provided that
such Lender's rights under Article 4, Section 13.1 and Section 13.2 accrued
through the date of assignment shall continue). At the time of each assignment
pursuant to this Section 13.8(b) to a Person which is not already a Lender
hereunder and which is not a U. S. Person, the respective assignee Lender shall,
to the extent legally entitled to do so, provide to the Borrower the appropriate
Internal Revenue Service Forms described in Section 3.6. To the extent that an
assignment of all or any portion of a Lender's Commitment and related
outstanding Obligations pursuant to this Section 13.8(b) would, at the time of
such assignment, result in
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increased costs under Sections 3.5, 4.1(a) or 4.6 from those being charged by
the respective assigning Lender prior to such assignment, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower, in
accordance with and pursuant to the other provisions of this Agreement, shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).
(c) By executing and delivering an Assignment and Acceptance, the
Assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto; (ii) such Assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the financial
condition or results of operations of the Borrower or any of its Affiliates or
the performance or observance by the Borrower or any of its Affiliates of its
obligations under the Loan Documents; (iii) such Assignee confirms that it has
received a copy of the Loan Documents, together with copies of the financial
statements referred to in Section 7.2 and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into such Assignment and Acceptance; (iv) such Assignee will,
independently and without reliance upon the Administrative Agent or such
Assigning Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents; (v) such
Assignee confirms that it is an Eligible Assignee; (vi) such Assignee appoints
and authorizes the Administrative Agent to take such action as agent on its
behalf and exercise such powers under the Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (vii) such Assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of the Loan Documents are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at its Principal Office a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to, each Lender from
time to time (the "Register"). The entries in the Register shall be conclusive
and binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes under the Loan
Documents. The Register shall be available for inspection by the Borrower or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assigning Lender and Assignee representing that it is an Eligible Assignee,
together with the Note(s) subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register, and
(iii) give prompt written notice thereof to the Borrower. Within five Business
Days after its receipt of such notice, the Borrower, at its expense, shall
execute and deliver to the Administrative Agent in exchange for each surrendered
Note evidencing the Loans assigned, a
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new Note evidencing such Loans payable to the order of such Eligible Assignee in
an amount equal to such Loans assigned to it and, if the Assigning Lender has
retained any Loans, a new Note evidencing each such Loans payable to the order
of the Assigning Lender in the amount of such Loans retained by it (each such
promissory note shall constitute a "Note" for purposes of the Loan Documents).
Such new Notes shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit B hereto.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 13.8, disclose
to the Assignee or participant or proposed Assignee or participant any
information relating to the Borrower or any of its Affiliates furnished to such
Lender by or on behalf of the Borrower or any of its Affiliates; provided that
each such actual or proposed Assignee or participant shall agree to be bound by
the provisions of Section 13.20.
(g) Any Lender may assign and pledge any Note held by it to any Federal
Reserve Bank or the U.S. Treasury as collateral security pursuant to Regulation
A of the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve System and/or Federal Reserve Bank;
provided, however, that any payment made by the Borrower for the benefit of such
assigning and/or pledging Lender in accordance with the terms of the Loan
Documents shall satisfy the Borrower's obligations under the Loan Documents in
respect thereof to the extent of such payment. No such assignment and/or pledge
shall release the assigning and/or pledging Lender from its obligations
hereunder.
(h) The Borrower shall maintain, or cause to be maintained, a register
(the "Registered Note Register") (which, at the request of the Borrower (which
request the Borrower makes by the execution of this Agreement) shall be kept by
the Administrative Agent on behalf of the Borrower at no extra charge to the
Borrower at the address to which notices to the Administrative Agent are to be
sent hereunder) on which it shall enter the name of the registered owner of each
of the Loans which is evidenced by a Registered Note. Notwithstanding anything
to the contrary contained in this Section 13.8, a Registered Note and the Loans
evidenced thereby may be assigned or otherwise transferred in whole or in part
only by registration of such assignment or transfer of such Registered Note and
the Loans evidenced thereby on the Registered Note Register (and each Registered
Note shall expressly so provide). Any assignment or transfer of all or part of
such Loans and the Registered Note evidencing the same shall be registered on
the Registered Note Register only upon surrender for registration of assignment
or transfer of the Registered Note evidencing such Loans, duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed by)
the registered noteholder thereof, and thereupon one or more new Registered
Notes in the same aggregate principal amount shall be issued to the designated
assignee(s) or transferee(s). Prior to the due presentment for registration of
transfer of any Registered Note, the Borrower and the Administrative Agent shall
treat the Person in whose name such Loans and the Registered Note(s) evidencing
the same are registered as the owner thereof for the purpose of receiving all
payments thereon and for all other purposes, notwithstanding any notice to the
contrary. The Registered Note Register shall be available for inspection by the
Borrower and any Lender at any reasonable time upon reasonable prior notice.
(i) The Borrower will not become a party to any loan agreement, credit
agreement or similar agreement which restricts or prohibits the right or ability
of any lender which is a party
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thereto to become a Lender under this Agreement.
(j) The Borrower shall provide prompt and reasonable assistance to the
Administrative Agent and the Lenders in connection with their efforts in
syndicating the Loans and Commitments. Such assistance shall include making
senior officers and other representatives of the Borrower and its Affiliates
available for meetings with prospective Lenders and providing, in a timely
manner, such assistance as may be reasonably requested by the Administrative
Agent or its advisors, including, without limitation, providing information to
and responding to inquiries from prospective Lenders with respect to the
business, operations, Business Plan, results and other matters relating to the
business of the Borrower, Holdings and the other Loan Parties.
Section 13.9 Survival. All representations and warranties made or
deemed made in this Agreement or any other Loan Document or in any document,
statement or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans, and no investigation by the
Administrative Agent or any Lender or any closing shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the obligations of the Borrower under
Article 4 and Sections 13.1 and 13.2 shall survive repayment of the Loans and
the Reimbursement Obligations and the other Obligations.
SECTION 13.10 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS (INCLUDING, WITHOUT
LIMITATION, ANY COMMITMENT LETTER), TERM SHEETS, AGREEMENTS, REPRESENTATIONS AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Section 13.11 Amendments. No amendment or waiver of any provision of
this Agreement, the Notes or any other Loan Document to which the Borrower is a
party, nor any consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to by the
Required Lenders and the Borrower in writing, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all of the Lenders and the Borrower, do any of
the following: (a) increase the Commitments of the Lenders (or any Lender) or
subject the Lenders to any additional obligations; (b) reduce the principal of,
or interest on, the Loans or any fees or other amounts payable hereunder; (c)
postpone any date fixed for any payment (including, without limitation, any
mandatory prepayment) of principal of, or interest on, the Loans or any fees or
other amounts payable hereunder; (d) change the Commitment Percentages or the
aggregate unpaid principal amount of the Loans or the number or interests of the
Lenders which shall be required for the Lenders or any of them to take any
action under this Agreement; (e) change any provision contained in Section 3.2,
3.3 or 5.1 or this Section 13.11 or modify the definition of "Required Lenders"
contained in Section 1.1; or (f) except as expressly authorized by this
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Agreement, release any Collateral from any of the Liens created by the Security
Documents; and provided further, however, that no amendment, waiver or consent
relating to Sections 12.1, 12.2, 12.3, 12.4 or 12.5 shall require the agreement
of the Borrower. Notwithstanding anything to the contrary contained in this
Section 13.11, no amendment, waiver or consent shall be made with respect to (i)
Article 12 hereof without the prior written consent of the Administrative Agent,
(ii) the definition of "Master Purchase Agreement", "Nortel Networks Equipment",
"Nortel Networks Goods and Services", "Nortel Networks Software" or Section 2.5,
2.9 or 2.10 hereof without the prior written consent of Nortel Networks (whether
or not Nortel Networks is then a Lender hereunder), or (iii) any condition
precedent set forth in Article 6 with respect to the making of any Loans without
the prior written consent of the Lenders that hold, at the time of such
amendment, waiver or consent, at least a majority (in Dollar amount) of the
Commitments.
Section 13.12 Maximum Interest Rate.
(a) No interest rate specified in this Agreement or any other Loan
Document shall at any time exceed the Maximum Rate. If at any time the interest
rate (the "Contract Rate") for any Obligation shall exceed the Maximum Rate,
thereby causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below the
Maximum Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been in
effect.
(b) Notwithstanding anything to the contrary contained in this
Agreement or the other Loan Documents, none of the terms and provisions of this
Agreement or the other Loan Documents shall ever be construed to create a
contract or obligation to pay interest at a rate in excess of the Maximum Rate;
and neither the Administrative Agent nor any Lender shall ever charge, receive,
take, collect, reserve or apply, as interest on the Obligations, any amount in
excess of the Maximum Rate. The parties hereto agree that any interest, charge,
fee, expense or other obligation provided for in this Agreement or in the other
Loan Documents which constitutes interest under applicable law shall be, ipso
facto and under any and all circumstances, limited or reduced to an amount equal
to the lesser of (i) the amount of such interest, charge, fee, expense or other
obligation that would be payable in the absence of this Section 13.12(b) or (ii)
an amount, which when added to all other interest payable under this Agreement
and the other Loan Documents, equals the Maximum Rate. If, notwithstanding the
foregoing, the Administrative Agent or any Lender ever contracts for, charges,
receives, takes, collects, reserves or applies as interest any amount in excess
of the Maximum Rate, such amount which would be deemed excessive interest shall
be deemed a partial payment or prepayment of principal of the Obligations and
treated hereunder as such; and if the Obligations, or applicable portions
thereof, are paid in full, any remaining excess shall promptly be paid to the
Borrower. In determining whether the interest paid or payable, under any
specific contingency, exceeds the Maximum Rate, the Borrower, the Administrative
Agent and the Lenders shall, to the maximum extent permitted by applicable law,
(i) characterize any nonprincipal payment as an expense, fee or premium rather
than as interest, (ii) exclude voluntary prepayments and the effects thereof,
and (iii) amortize, prorate, allocate and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
Obligations, or applicable portions thereof, so that the interest rate does not
exceed the Maximum Rate at any time during the term of the Obligations; provided
that, if the unpaid principal balance is paid and performed in full
CREDIT AGREEMENT - Page 80
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prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Rate,
the Administrative Agent and/or the Lenders, as appropriate, shall refund to the
Borrower the amount of such excess and, in such event, the Administrative Agent
and the Lenders shall not be subject to any penalties provided by any laws for
contracting for, charging, receiving, taking, collecting, reserving or applying
interest in excess of the Maximum Rate.
Section 13.13 Notices. All notices and other communications provided
for in this Agreement and the other Loan Documents to which the Borrower is a
party shall be given or made by telecopy (confirmed by the sender) or in writing
and telecopied, mailed by certified mail return receipt requested or delivered
to the intended recipient at the "Address for Notices" specified below its name
on the signature pages hereof (or, with respect to a Lender that becomes a party
to this Agreement pursuant to an assignment made in accordance with Section
13.8, in the Assignment and Acceptance executed by it); or, as to any party, at
such other address as shall be designated by such party in a notice to each
other party given in accordance with this Section 13.13. Except as otherwise
provided in this Agreement, all such communications shall be deemed to have been
duly given when transmitted by telecopy (confirmed by the sender) or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid; provided, however, that notices to the Administrative
Agent shall be deemed given when received by the Administrative Agent.
SECTION 13.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; SERVICE OF
PROCESS. THIS AGREEMENT, THE NOTES AND THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES) AND EACH OF THE PARTIES HERETO
CHOOSE THE LAWS OF THE STATE OF NEW YORK TO GOVERN THIS AGREEMENT PURSUANT TO
N.Y. GEN. OBLIG. LAW SECTION 5-1401 (CONSOL. 1995) AND APPLICABLE LAWS OF THE
U.S. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF EACH OF (1) THE U.S. DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND (2) ANY NEW YORK STATE COURT SITTING
IN NEW YORK, NEW YORK, FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL
PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH
PROCESS BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH PERSON AT ITS
ADDRESS SET FORTH UNDERNEATH ITS SIGNATURE HERETO. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORM.
CREDIT AGREEMENT - Page 81
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Section 13.15 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 13.16 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 13.17 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 13.18 Construction. The Borrower, the Administrative Agent and
each Lender acknowledges that it has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.
Section 13.19 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 13.20 Confidentiality.
(a) Lenders' Obligations. Each Lender agrees to exercise its best
efforts to keep any information delivered or made available by the Borrower or
Holdings to it which is clearly indicated to be confidential information,
confidential from anyone other than Persons employed or retained by such Lender
who are or are expected to become engaged in evaluating, approving, structuring
or administering the Loans; provided that nothing herein shall prevent any
Lender from disclosing such information (i) to any other Lender, (ii) to any
Person if reasonably incidental to the administration of the Loans, (iii) upon
the order of any court or administrative agency, (iv) upon the request or demand
of any Governmental Authority having jurisdiction over such Lender, (v) which
has been publicly disclosed, (vi) in connection with any litigation to which the
Administrative Agent, any Lender or their respective Affiliates may be a party,
(vii) to the extent reasonably required in connection with the exercise of any
right or remedy under the Loan Documents, (viii) to such Lender's legal counsel,
independent auditors and Affiliates, and (ix) to any actual or proposed
participant or Assignee of all or part of its rights hereunder, so long as such
actual or proposed participant or Assignee agrees to be bound by the provisions
of this Section 13.20(a).
(b) Loan Parties' and Affiliates' Obligations. The Borrower agrees that
it will, and will cause Holdings and the other Loan Parties and their Affiliates
to, keep the terms and provisions of this Agreement and the other Loan Documents
confidential from anyone other than individuals employed or retained by the
Borrower, Holdings, any other Loan Party or any of their Affiliates (including
employees, officers, directors, shareholders, representatives, agents,
accountants and lawyers of the Borrower, Holdings, any other Loan Party or any
of their
CREDIT AGREEMENT - Page 82
83
Affiliates), provided that nothing herein shall prevent any such Person from
disclosing such information (i) to any such other Loan Party or Affiliate, (ii)
upon the order of any court or administrative agency, (iii) upon the request or
demand of any Governmental Authority having jurisdiction over such Loan Party or
Affiliate, (iv) which has been publicly disclosed, (v) to World Access and/or
its employees, officers, directors, shareholders, lawyers, accountants, agents
or other representatives in connection with the Holdings Merger, and (vi) to
such Loan Party's or Affiliate's legal counsel and independent auditors;
provided, however, that the Borrower will deliver to the Administrative Agent
written notice of any intention or obligation of Holdings or any of its
Consolidated Subsidiaries (including, without limitation, the Borrower) to
deliver or provide a copy of this Agreement or any other Loan Document or any
term or provision hereof or thereof to any Governmental Authority at least ten
Business Days prior to the initial date upon which any such delivery or
provision occurs and the Borrower shall, and shall cause Holdings and its
Consolidated Subsidiaries to, use all reasonable efforts to redact or delete
from such copy or such term or provision such terms or provisions or language
relating to rates or amounts of interest, fees, financial covenants and other
terms or provisions of a sensitive nature (exclusive of the amount of the
Commitments, the identities of the parties to the Loan Documents and the
maturity of the Loans) as may be requested by the Administrative Agent to be so
redacted or deleted before the same is so delivered or provided. Without
limiting the generality of the foregoing, the Borrower agrees that it will not,
and will cause Holdings and the other Loan Parties and their Affiliates not to,
without the prior written consent of the Administrative Agent, issue or publish
a press release, tombstone or other similar announcement or publication relating
to this Agreement or any other Loan Document or the Loan Transactions
contemplated hereby unless it is required to do so by the order of any court or
administrative agency or in accordance with applicable law. Notwithstanding the
immediately preceding proviso (i.e., the second proviso in the immediately
preceding sentence), such proviso and requirements contained therein shall not
apply to a copy of this Agreement or any other Loan Document or any term or
provision hereof or thereof which is being provided to any Governmental
Authority after the date upon which this Agreement or any such other Loan
Document or any such term or provision hereof or thereof, respectively, has then
previously been publicly disclosed in compliance with this Section 13.20 (b).
SECTION 13.21 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE BORROWER, THE ADMINISTRATIVE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION OR ENFORCEMENT THEREOF.
Section 13.22 Approvals and Consent. Except as may be expressly
provided to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement of the other Loan Documents
where the approval, consent or exercise of judgment of the Administrative Agent
or any Lender is requested or required, (a) the granting or denial of such
approval or consent and the exercise of such judgment shall be within the sole
discretion of the Administrative Agent or such Lender, respectively, and the
Administrative Agent and such Lender shall not, for any reason or to any extent,
be required to grant such
CREDIT AGREEMENT - Page 83
84
approval or consent or to exercise such judgment in any particular manner,
regardless of the reasonableness of the request or the action or judgment of the
Administrative Agent or such Lender, and (b) no approval or consent of the
Administrative Agent or any Lender shall in any event be effective unless the
same shall be in writing and the same shall be effective only in the specific
instance and for the specific purpose for which given.
Section 13.23 Service of Process. The Borrower irrevocably consents to
the service of process by the mailing thereof by the Administrative Agent or the
Required Lenders by registered or certified mail, postage prepaid, to the
Borrower at its address listed on the signature pages hereof. The Administrative
Agent and the Lenders irrevocably consent to the service of process by the
mailing thereof by the Borrower by registered or certified mail, postage
prepaid, to the Administrative Agent or such Lenders (as applicable) at its
address listed on the signature pages hereof. Nothing in this Section 13.23
shall affect the right of the Administrative Agent or the Lenders or the
Borrower to serve legal process in any other manner permitted by law or affect
the right of the Administrative Agent or any Lender or the Borrower to bring any
action or proceeding against another party hereto or its Property in the court
of any jurisdiction.
Section 13.24 Acknowledgment relating to the Holdings Merger. The
Administrative Agent and the Lenders hereby acknowledge that Holdings is
contemplating consummating the Holdings Merger, and hereby agree that (a)
nothing contained in this Agreement or any other Loan Document shall prohibit
consummation of the Holdings Merger and (b) consummation of the Holdings Merger,
in and of itself, will not constitute a default under, or a breach of, any term
or provision of this Agreement or any other Loan Document or a Default.
Section 13.25 Purchase of Nortel Networks Equipment. The Borrower
shall, in connection with the purchase and delivery of any Nortel Networks
Equipment to the Borrower or any of its Subsidiaries or Affiliates, cause all
Nortel Networks Equipment which is to be used in the U.S. to be purchased by the
Borrower and delivered to the Borrower for the Borrower's use at one or more
business locations of the Borrower located in the U.S. and thereby ensure that
such Nortel Networks Equipment constitutes U.S. Nortel Networks Equipment and a
part of the Collateral.
[Remainder of page intentionally left blank.]
CREDIT AGREEMENT - Page 84
85
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
FACILICOM INTERNATIONAL, L.L.C.
By: /s/ Xxxxxxxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxxxxxxx X. Xxxx
---------------------------------------
Title: CFO
--------------------------------------
Address for Notices:
--------------------------------------------
FaciliCom International, L.L.C.
0000 Xxx Xxxx Xxxxxx, X.X.
0xx Xxxxx
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxxxx X. Xxxx
Chief Financial Officer
Telephone: 000-000-0000
Telecopy: 000-000-0000
CREDIT AGREEMENT - Page 85
86
ADMINISTRATIVE AGENT:
NORTEL NETWORKS INC.,
as Administrative Agent
By: /s/ Xxxx X. Day
-----------------------------------------
Name: Xxxx X. Day
Title: Vice President, Customer Finance
Address for Notices:
--------------------------------------------
Nortel Networks plc
Maidenhead Office Park
Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Attention: Vice President, Customer Finance
Telephone: 000 00 0 000 00 0000
Telecopy: 011 44 1 628 43 2884
and
Nortel Networks Inc.
XX Xxx 000000
Mail Stop 04D/02/A40
Xxxxxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxxx Xxx, Loan
Administration
Telephone: 000-000-0000
Telecopy: 000-000-0000
CREDIT AGREEMENT - Page 86
87
LENDERS:
Commitment: $40,000,000 NORTEL NETWORKS INC.,
-----------
By: /s/ Xxxx X. Day
-----------------------------------------
Name: Xxxx X. Day
Title: Vice President, Customer Finance
Address for Notices:
--------------------------------------------
Nortel Networks plc
Maidenhead Office Park
Xxxxxxxxx Xxx
Xxxxxxxxxx, Xxxxxxxxx XX0 0XX
Xxxxxx Xxxxxxx
Attention: Vice President, Customer Finance
Telephone: 000 00 0 000 00 0000
Telecopy: 011 44 1 628 43 2884
and
Nortel Networks Inc.
XX Xxx 000000
Mail Stop 04D/02/A40
Xxxxxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxxx Xxx, Loan Administration
Telephone: 000-000-0000
Telecopy: 000-000-0000
Lending Office for Base Rate Loans:
--------------------------------------------
Nortel Networks Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxx 00000
Lending Office for
--------------------------------------------
CREDIT AGREEMENT - Page 87
88
Eurodollar Loans:
-----------------
Nortel Networks Inc.
0000 Xxxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxx 00000
CREDIT AGREEMENT - PAGE 88
89
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE
CREDIT AGREEMENT - Page 89
90
EXHIBIT B
FORM OF NOTE
CREDIT AGREEMENT - Page 90
91
EXHIBIT C
FORM OF NOTICE OF BORROWINGS, CONVERSIONS,
CONTINUATIONS AND PREPAYMENTS
CREDIT AGREEMENT - Page 91
92
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
CREDIT AGREEMENT - Page 92
93
SCHEDULE 7.6
LITIGATION, ETC.
CREDIT AGREEMENT - Page 93
94
SCHEDULE 7.10
EXISTING DEBT
CREDIT AGREEMENT - Page 94
95
SCHEDULE 7.15
LOAN PARTIES
CREDIT AGREEMENT - Page 95
96
SCHEDULE 7.23
INSURANCE
CREDIT AGREEMENT - Page 96
97
SCHEDULE 10.1
ANNUALIZED EBITDA
Minimum Annualized
Fiscal Quarter Ending EBITDA
--------------------- ------------------
December 31, 1999 $ 1,595,000
March 31, 2000 $ 3,918,000
June 30, 2000 $ 6,476,000
September 30, 2000 $10,406,000
CREDIT AGREEMENT - Page 97
98
SCHEDULE 10.2
FIXED CHARGE COVERAGE
Minimum Ratio of
Fiscal Quarter Ending Annualized EBITDA
--------------------- to Consolidated Fixed Charges
-----------------------------
December 31, 1999 0.04 to 1.00
March 31, 2000 0.19 to 1.00
June 30, 2000 0.32 to 1.00
September 30, 2000 0.52 to 1.00
CREDIT AGREEMENT - Page 98
99
SCHEDULE 10.3
GROSS REVENUES
Fiscal Quarter Ending Gross Revenues
--------------------- --------------
December 31, 1999 $121,268,000
March 31, 2000 $140,251,000
June 30, 2000 $159,917,000
September 30, 2000 $182,646,000
CREDIT AGREEMENT - Page 99
100
SCHEDULE 10.4
MINUTES OF USE
Fiscal Quarter Ending Minutes of Use
--------------------- --------------
December 31, 1999 712,288,000
March 31, 2000 840,120,000
June 30, 2000 976,242,000
September 30, 2000 1,132,746,000
CREDIT AGREEMENT - Page 100
