SECOND AMENDMENT TO
CREDIT AGREEMENT
EXECUTION
FLAG ATLANTIC LIMITED
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT dated as of November 16, 2000 (the "Second
Amend-ment") to the CREDIT AGREEMENT dated as of October 8, 1999, as amended on
December 14, 1999 (such agreement as amended, supplemented or otherwise modified
to the date hereof, the "Credit Agreement") (this "Second Amendment") is entered
into by and among FLAG ATLANTIC LIMITED, a company organized and existing under
the laws of Bermuda (the "Company"), the Lenders party thereto, BARCLAYS
CAPITAL, as lead arranger, WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK
BRANCH, as syndication agent, DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES, as documentation agent and BARCLAYS BANK PLC as administrative agent
for the Lenders and as security agent for the Secured Parties (in such
capacities, the "Administrative Agent"). Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS WHEREAS, Company and Lenders are parties to the Credit Agreement,
pursuant to which Lenders have extended certain credit facilities to Company;
WHEREAS, FLAG Atlantic Holdings Limited ("FLAG Atlantic Holdings") desires
to purchase from GTS TransAtlantic Holdings, Ltd. ("GTS") the 50% of the Company
it does not already own;
WHEREAS, in order to effectuate the acquisition by FLAG Atlantic Holdings
of the 50% of the Company owned by GTS, Company and Lenders desire to amend the
Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT
1.1 Amendments to Article I Section 1.1 is hereby amended by deleting the
definitions of "Change in Control" and "Sponsor" in their entirety and
substituting therefor the following:
SECOND AMENDMENT TO
CREDIT AGREEMENT
2. "Change in Control" shall mean and shall be deemed to have occurred if
FLAG Telecom Holdings Limited shall cease to directly or indirectly own at least
50% of the issued and outstanding voting stock of the Company; provided,
however, that no "Change in Control" shall be deemed to occur if a successor or
transferee of any of the foregoing stock is a person (or whose (direct or
indirect) 100% parent is a person) whose debt is rated at least "investment
grade" by S&P and ▇▇▇▇▇'▇ (or, if rated by one only of S&P and ▇▇▇▇▇'▇, by such
rating agency) or as a result of any transaction entered into in accordance with
Section 6.7 or 6.8. "Sponsors" or "Sponsor" shall mean FLAG Atlantic Holdings;
provided that, solely for the purposes of the definition of "Sponsor Pre-Sale
Capacity Commitments," and terms and provisions with respect thereto, "Sponsor"
shall mean each of FLAG Atlantic Holdings and GTS TransAtlantic Holdings. 1.2
Amendments to Article VI A. Section 6.4 is hereby amended by inserting the words
"(other than GTS TransAtlantic Holdings)" after the words "provided, further,
that the Company shall cause each Sponsor" in the seventh to last line of such
Section. B. Clause (ii) of Section 6.30 is hereby amended by inserting the words
"(other than GTS TransAtlantic Holdings)" after the words "acquired by a
Sponsor" in the second line of such clause . C. Clause (iii) of Section 6.30 is
hereby amended by inserting the words "(excluding GTS TransAtlantic Holdings)"
after the words "other than Sponsor" in the third line of such clause.
SECTION 2. CONSENT The Lenders hereby consent to either, or a combination,
of the following:
(i) the amendment or assignment of Project Documents solely for the
purposes of the assumption by FLAG Atlantic Holdings or any of its Affiliates of
the rights and obligations of GTS or its relevant Affiliate under such Project
Documents or (ii) the termination of Project Documents (other than Capacity
Sales Agreements), provided that FLAG Atlantic Holdings enters into,
simultaneously with such termination, agreements on substantially identical
terms, and no less favorable to Lenders, to such terminated Project Documents.
This consent shall not be provided, or continue to be provided, unless each
Sponsor Pre-Sale Capacity Commitment shall remain in full force and effect
notwithstanding any amendment to the Credit Agreement effected pursuant to this
Second Amendment. Any revisions to Capacity Sales Agreements entered into by GTS
pursuant to Sponsor Pre-Sale Capacity Commitments shall be reasonably
satisfactory to the Administrative Agent.
SECOND AMENDMENT TO CREDIT AGREEMENT
3 The Lenders hereby consent to the release by the Administrative Agent of
all their rights, title, claim and interest in or under (i) solely with respect
to GTS, the Shareholder Pledge Agreement effective on the transfer to FLAG
Atlantic Holdings of all the shares representing GTS' interest in the Company,
(ii) the Equity Contribution Agreement, dated October 8, 1999, between the
Administrative Agent and GTS, and (iii) the Limited Guarantee Agreement (GTS).
SECTION 3. CONDITIONS TO EFFECTIVENESS Sections 1 and 2 of this Second
Amendment shall become effective only upon the satisfaction of all of the
following conditions precedent (the date of satisfaction of such conditions
being referred to herein as the "Second Amendment Effective Date"):
A. execution. The Company, Majority Lenders and the Administrative Agent shall
have executed this Second Amendment.
B. Certain Documents. On or before the Second Amendment Effective Date, the
Company or its Affiliates, as the case may be, shall deliver or cause to be
delivered to Lenders (or to Administrative Agent for Lenders with sufficient
originally executed copies, where appropriate, for each Lender and its counsel):
(i) one or more favorable written opinions of in-house counsel to the
Company with respect to due authorization, execution and validity of the
Pledge Supplement (as defined in 3.D. below), dated as of the Second
Amendment Effective Date and in form and substance reasonably satisfactory
to the Administrative Agent and their counsel and as to such other matters
as Administrative Agent acting on behalf of Lenders may reasonably
request; and
(ii) one or more favorable written opinions in respect of the share pledge
described in 3.D. below of (y) ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special U.S.
counsel for the Company and (z) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, special Bermudan
counsel to the Company, in each case as of the Second Amendment Effective
Date and in form and substance reasonably satisfactory to the
Administrative Agent and their counsel as to such matters as
Administrative Agent acting on behalf of Lenders may reasonably request.
C. Representations and Warranties; Performance of Agreements. Company shall have
delivered to Administrative Agent an Officer's Certificate, in form and
substance satisfactory to Administrative Agent, to the effect that (i) the
representations and warranties contained in Section 4 of this Second Amendment
are true, correct and complete in all material respects on and as of the Second
Amendment Effective Date to the same extent as though made on and as of that
date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date, and (ii) Company shall
have performed in all material respects all agreements and satisfied all
conditions which this Second Amendment provides shall be performed or satisfied
by Company on or before.
SECOND AMENDMENT TO CREDIT AGREEMENT 4 the Second Amendment Effective Date,
except as otherwise disclosed to and agreed to in writing by Administrative
Agent.
D. Share Pledge. FLAG Atlantic Holdings shall deliver a supplement (the "Pledge
Supplement") to the Shareholder Pledge Agreement whereby it shall pledge to the
Administrative Agent on behalf of the Lenders the shares representing the 50% of
the Company it is acquiring from GTS immediately upon the acquisition of such
shares.
E. Other Documents. Administrative Agent and Lenders shall have received such
other
documents and information regarding the Company, the Financing Documents and the
documents contemplated by Section 3.B. above as Administrative Agent may
reasonably request.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF COMPANY
In order to induce Lenders to enter into this Second Amendment and to amend the
Credit Agreement in the manner provided herein, the Company represents and
warrants to each Lender that the following statements are true, correct and
complete in all material respects:
A. Corporate Power and Authority. The Company has all requisite corporate power
and authority to enter into this Second Amendment and to carry out the
transactions contemplated by, and perform its obligations under the Credit
Agreement, as amended by this Second Amendment, and the other Financing
Documents.
B. Authorization of Agreements. The execution and delivery of this Second
Amendment and the performance of the Credit Agreement, as amended by this Second
Amendment, and the other Financing Documents have been duly authorized by all
necessary corporate or partnership (as applicable) action on the part of the
Company.
C. No Conflict. The execution and delivery by the Company of this Second
Amendment and the performance by the Company of the Credit Agreement, as amended
by this Second Amendment, and the other Financing Documents do not and will not
(i) violate (A) any provision of any law, statute, rule or regulation, or of the
certificate or articles of incorporation or partnership agreement, other
constitutive documents or by-laws of the Company or any of its Subsidiaries, (B)
any applicable order of any court or any rule, regulation or order of any
Governmental Authority or (C) any provision of any indenture, certificate of
designation for preferred stock, agreement or other instrument to which the
Company or any of its Subsidiaries is a party or by which any of them or any of
their property is or may be bound, (ii) be in conflict with, result in a breach
of or constitute (alone or with notice or lapse of time or both) a default under
any such indenture, certificate of designation for preferred stock, agreement or
other instrument, where any such conflict, violation, breach or default referred
to in clause (i) or (ii) of this Section 4.C., individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect, (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of the Company (other than any Liens created under any of the Financing
Documents in favor of Administrative Agent on behalf of Lenders), or (iv)
require any approval of stockholders or partners.
SECOND AMENDMENT TO CREDIT AGREEMENT or any approval or consent of any Person
under any contractual obligation of the Company, except for such approvals or
consents which will be obtained on or before the Second Amendment Effective
Date.
D. Governmental Consents. No action, consent or approval of, registration or
filing with or any other action by any Governmental Authority is or will be
required in connection with the execution and delivery by the Company of this
Second Amendment and the performance by Company of the Credit Agreement, as
amended by this Second Amendment, and the other Financing Documents, except for
such actions, consents and approvals the failure to obtain or make which could
not reasonably be expected to result in a Material Adverse Effect or which have
been obtained and are in full force and effect.
E. Binding Obligation. This Second Amendment and the Credit Agreement, as
amended by this Second Amendment, have been duly executed and delivered by the
Company and each constitutes a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally and
except as enforceability may be limited by general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
F. Incorporation of Representations and Warranties From Credit Agreement. The
representations and warranties contained in Article III of the Credit Agreement,
as amended by this Second Amendment, are true, correct and complete in all
material respects on and as of the date hereof, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case they were true, correct and complete in all material respects on and as of
such earlier date. For the avoidance of doubt, for purposes of Section 3.32 of
the Credit Agreement, as amended by this Second Amendment, reference to the
"Sponsor" therein shall be deemed to be reference to FLAG Atlantic Holdings
only.
G. Absence of Default. No event has occurred and is continuing or will result
from the consummation of the transactions contemplated by this Second Amendment
that would constitute an Event of Default or a Default.
H. Adverse Change. There has not been, as of the date hereof, any material
adverse change in the financial condition, results of operations, businesses,
operations or properties of the Company and its Subsidiaries, taken as a whole,
or of the Company on an individual basis, since October 8, 1999.
SECTION 5. FURTHER ASSURANCES The Company agrees that from time to time, at the
expense of Company, it will execute and deliver such further agreements,
documents and instruments (including, without limitation, financing statements
and amendments to financing statements specifying each item of the Collateral
and the serial number therefor) and take such further action as may be requested
by the Administrative Agent to carry out the terms and provisions and purposes
of this Second Amendment, the Credit Agreement, as amended by this Second
Amendment, and the other Financing Documents, to evidence the Obligations and to
create, preserve, maintain and perfect the Liens of the Administra-tive Agent
for the benefit of itself and the Lenders in and to the Collateral and the
required priority of such Liens.
SECTION 6. ACKNOWLEDGMENT AND CONSENT Each of FLAG Atlantic Holdings, FLAG
Atlantic USA Limited, FLAG Atlantic UK Limited and FLAG Atlantic France SARL has
(i) guarantied the Obligations and (ii) created Liens in favor of Lenders on
certain Collateral to secure its obligations under the Subsidiary Guarantee
Agreements. FLAG Atlantic Holdings, FLAG Atlantic USA Limited, FLAG Atlantic UK
Limited and FLAG Atlantic France SARL are collectively referred to herein as the
"Credit Support Parties", and the Subsidiary Guarantee Agreements and the
Security Agreements are collectively referred to herein as the "Credit Support
Documents". Each Credit Support Party hereby acknowledges that it has reviewed
the terms and provisions of the Credit Agreement and this Second Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
Second Amendment. Each Credit Support Party hereby confirms that each Credit
Support Document to which it is a party or otherwise bound and all Collateral
encumbered thereby will continue to guarantee or secure, as the case may be, to
the fullest extent possible in accordance with the Credit Support Documents the
payment and performance of all "Obligations" under each of the Subsidiary
Guarantee Agreements and Security Agreements, as the case may be (in each case
as such terms are defined in the applicable Credit Support Document), including
without limitation the payment and performance of all such "Obligations" under
each of the Subsidiary Guarantee Agreements and Security Agreements, as the case
may be, in respect of the Obligations of the Company now or hereafter existing
under or in respect of the Credit Agreement, as amended by this Second
Amendment, and hereby pledges and assigns to the Administrative Agent, and
grants to the Administrative Agent a continuing lien on and security interest in
and to all Collateral as collateral security for the prompt payment and
performance in full
when due of the "Obligations" under each of the Subsidiary Guarantee Agreements
and Security Agreements to which it is a party (whether at stated maturity, by
acceleration or otherwise). Each Credit Support Party acknowledges and agrees
that any of the Credit Support Documents to which it is a party or otherwise
bound shall continue in full force and effect and that all of its obligations
thereunder shall be valid and enforceable and shall not be impaired or limited
by the execution or effectiveness of this Second Amendment. Each Credit Support
Party represents and warrants that all representations and warranties of such
Credit Support Party contained in the Credit Agreement, this Second Amendment
and the Credit Support Documents to which it is a party or otherwise bound are
true, correct and complete in all material respects on and as of the date hereof
to the same extent as though made on and as of that date, except to the extent
such representations and warranties specifically relate to an earlier date, in
which case they were true, correct andcomplete in all material respects on and
as of such earlier date. The representation and warranty in the immediately
preceding sentence shall also be given as of the Second Amendment Effective
Date. Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Second Amendment, such Credit
Support Party is not required by the terms of the Credit Agreement or any other
Financing Document to consent to the amendments to the Credit Agreement effected
pursuant to this Second Amendment and (ii) nothing in the Credit Agreement, this
Second Amendment or any other Financing Document shall be deemed to require the
consent of such Credit Support Party to any future amendments to the Credit
Agreement.
SECTION 7. MISCELLANEOUS A. Reference to and Effect on the Credit Agreement and
the Other Loan Documents. (i) On and after the Second Amendment Effective Date,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit Agreement,
and each reference in the other Financing Documents to the "Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended by
this Second Amendment. (ii) Except as specifically amended by this Second
Amendment, the Credit Agreement and the other Financing Documents shall remain
in full force and effect and are hereby ratified and confirmed. (iii) The
execution, delivery and performance of this Second Amendment shall not, except
as expressly provided herein, constitute a waiver of any provision of, or
operate as a waiver of any right, power or remedy of any Agent or Lender under
the Credit
Agreement or any of the other Financing Documents.
B. Headings. Section and Subsection headings in this Second Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Second Amendment for any other purpose or be given any substantive
effect.
C. Applicable Law. THIS SECOND AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES..SECOND AMENDMENT TO
CREDIT AGREEMENT
D. COUNTERPARTS. This Second Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. [Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY: FLAG ATLANTIC LIMITED
By:
Name:
Title:
By:
Name:
Title:
CREDIT SUPPORT PARTIES: FLAG ATLANTIC HOLDINGS LIMITED
By:
Name:
Title: FLAG ATLANTIC USA LIMITED
By:
Name:
Title:
FLAG ATLANTIC UK LIMTED
By:
Name:
Title: FLAG ATLANTIC FRANCE SARL
By:
Name:
Title:
LENDERS AND AGENTS: BARCLAYS BANK PLC,
as the Administrative Agent
By:
Name:
Title: BARCLAYS BANK PLC, as the Lead Arranger and a Lender
By:
Name:
Title:.SECOND AMENDMENT TO CREDIT AGREEMENT
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
as Documentation Agent and Lender
By:
Name:
Title:
By:
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,
as Syndication Agent and Lender
By:
Name:
Title:
AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD.
By:
Name:
Title:
BANK OF SCOTLAND
By:
Name:
Title: CITY NATIONAL BANK
By:
Name:
Title: CREDIT LYONNAIS
By:
Name:
Title: DG BANK
By:
Name:
Title:
ERSTE BANK DER OESTERRIECHISCHEN SPARKASSEN AG
By:
Name:
Title: GULF INTERNATIONAL BANK B.S.C.
By:
Name:
Title:
HYPOVEREINSBANK
By:
Name:
Title: 13 IKB DEUTSCHE INDUSTRIEBANK AG C/O STRUCTURED FINANCE
By:
Name:
Title: KBC FINANCE IRELAND
By:
Name:
Title: LANDESBANK HESSAN-THURINGEN GIROZENTRALE
By:
Name:
Title: LANDESBANK SACHEN GIROZENTRALE
By:
Name:
Title: MITSUBISHI TRUST & BANKING CORP.
By:
Name:
Title: NIB CAPITAL BANK
By:
Name:
Title: RABOBANK INTERNATIONAL
By:
Name:
Title: RAIFFEISEN ZENTRALBANK OSTERREICH AKTIENGESELLSCHAFT
By:
Name:
Title: SOCIETE GENERALE
By:
Name:
Title: SUMITOMO BANK LIMITED
By:
Name:
Title: THE ROYAL BANK OF SCOTLAND PLC
By:
Name:
Title: