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EXHIBIT 99.2
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CREDIT AGREEMENT
Dated as of
October 8, 1999
among
FLAG ATLANTIC LIMITED,
as the Company
BARCLAYS BANK PLC,
as the Administrative Agent
DRESDNER BANK AG, NEW YORK BRANCH,
as the Documentation Agent
WESTDEUTSCHE LANDESBANK GIROZENTRALE, NEW YORK BRANCH,
as the Syndication Agent
BARCLAYS BANK PLC
AND THE LENDERS LISTED HEREIN,
as the Lenders
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BARCLAYS CAPITAL,
as the Lead Arranger
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Construction and Permanent Financing of a
12,000 Kilometer Submarine Fiberoptic Cable System
Connecting the United States of America and Europe
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS 2
SECTION 1.1. DEFINED TERMS 2
SECTION 1.2. CLASSIFICATION OF LOANS AND BORROWINGS 44
SECTION 1.3. TERMS GENERALLY 44
SECTION 1.4. ACCOUNTING TERMS; GAAP 45
ARTICLE II COMMITMENTS AND LOANS 45
SECTION 2.1. COMMITMENTS; CONVERSION DATE 45
SECTION 2.2. LOANS AND BORROWINGS 46
SECTION 2.3. REQUESTS FOR BORROWINGS 47
SECTION 2.4. FUNDING OF BORROWINGS 48
SECTION 2.5. INTEREST ELECTIONS 48
SECTION 2.6. TERMINATION AND REDUCTION OF COMMITMENTS 50
SECTION 2.7. REPAYMENT OF LOANS; EVIDENCE OF DEBT 50
SECTION 2.8. OPTIONAL PREPAYMENTS OF LOANS 52
SECTION 2.9. MANDATORY PREPAYMENTS 53
SECTION 2.10. FEES 55
SECTION 2.11. INTEREST 56
SECTION 2.12. ALTERNATE RATE OF INTEREST; ILLEGALITY 56
SECTION 2.13. INCREASED COSTS 57
SECTION 2.14. BREAK FUNDING PAYMENTS 58
SECTION 2.15. TAXES 59
SECTION 2.16. PAYMENTS GENERALLY; ETC. 60
SECTION 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS 62
ARTICLE III REPRESENTATIONS AND WARRANTIES 63
SECTION 3.1. FINANCIAL CONDITION 63
SECTION 3.2. NO MATERIAL ADVERSE EFFECT 63
SECTION 3.3. ORGANIZATION; EXISTENCE; BUSINESS 63
SECTION 3.4. COMPLIANCE WITH LAW 63
SECTION 3.5. POWER AND AUTHORIZATION; ENFORCEABLE OBLIGATIONS 64
SECTION 3.6. CAPITAL AND CORPORATE STRUCTURE 65
SECTION 3.7. GOVERNMENTAL ACTIONS, PERMITS, ETC. 65
SECTION 3.8. NO LEGAL BAR 66
SECTION 3.9. NO PROCEEDING OR LITIGATION 66
SECTION 3.10. NO DEFAULT, EVENT OF DEFAULT OR EVENT OF LOSS 66
SECTION 3.11. OWNERSHIP OF PROPERTY; LIENS; COMMON STOCK 67
SECTION 3.12. TAXES 68
SECTION 3.13. FEDERAL REGULATIONS 68
SECTION 3.14. ERISA 68
SECTION 3.15. INVESTMENT COMPANY ACT 68
SECTION 3.16. FULL DISCLOSURE 69
SECTION 3.17. PRINCIPAL PLACE OF BUSINESS, ETC. 69
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SECTION 3.18. INTELLECTUAL PROPERTY 69
SECTION 3.19. SUFFICIENCY OF PROJECT DOCUMENTS 70
SECTION 3.20. ENVIRONMENTAL MATTERS 70
SECTION 3.21. COMMERCIAL INSURANCE 70
SECTION 3.22. IMMUNITY 70
SECTION 3.23. FOREIGN CORRUPT PRACTICES ACT 70
SECTION 3.24. FEES AND ENFORCEMENT 71
SECTION 3.25. ENFORCEMENT; PERFORMANCE 71
SECTION 3.26. DISPUTES 71
SECTION 3.27. INDEBTEDNESS 71
SECTION 3.28. OTHER ACTS 71
SECTION 3.29. PROJECT COSTS 71
SECTION 3.30. SUBMISSION TO JURISDICTION 71
SECTION 3.31. YEAR 2000 72
SECTION 3.32. REPRESENTATIONS AND WARRANTIES 72
ARTICLE IV CONDITIONS 72
SECTION 4.1. CLOSING DATE 72
SECTION 4.2. CONSTRUCTION LOANS 78
SECTION 4.3. EACH LOAN 80
SECTION 4.4. CONVERSION DATE 82
SECTION 4.5. EQUITY WITHDRAWALS 84
ARTICLE V AFFIRMATIVE COVENANTS 85
SECTION 5.1. COMPLETION OF THE PROJECT 85
SECTION 5.2. FINANCIAL STATEMENTS AND OTHER INFORMATION 86
SECTION 5.3. REPORTS; OTHER INFORMATION 87
SECTION 5.4. PAYMENT OF OBLIGATIONS 88
SECTION 5.5. EXISTENCE 88
SECTION 5.6. COMPLIANCE WITH LAWS 88
SECTION 5.7. PERFORMANCE AND ENFORCEMENT OF AGREEMENTS 89
SECTION 5.8. TAXES AND CLAIMS 89
SECTION 5.9. NOTICES 89
SECTION 5.10. INSURANCE 90
SECTION 5.11. FISCAL YEAR 91
SECTION 5.12. USE OF PROCEEDS 91
SECTION 5.13. INTEREST RATE PROTECTION 91
SECTION 5.14. CAPACITY SALES AGREEMENT LETTERS OF CREDIT 91
SECTION 5.15. GOVERNMENTAL ACTIONS AND RIGHTS-OF-WAY 92
SECTION 5.16. COOPERATION WITH INDEPENDENT ENGINEER 92
SECTION 5.17. REVENUE ACCOUNT 92
SECTION 5.18. MAINTENANCE OF PROCESS AGENT 92
SECTION 5.19. SYSTEM OPERATION AND MAINTENANCE 92
SECTION 5.20. EVENT OF LOSS 92
SECTION 5.21. BOOKS AND RECORDS; INSPECTION RIGHTS 93
SECTION 5.22. FOREIGN CORRUPT PRACTICES ACT 94
SECTION 5.23. INTELLECTUAL PROPERTY 94
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SECTION 5.24. BUDGETS AND OPERATING REPORTS 94
SECTION 5.25. SPARE PARTS 95
SECTION 5.26. MATERIAL REAL ESTATE ASSETS 95
SECTION 5.27. NOTICES OF ASSIGNMENT 95
SECTION 5.28. FRENCH GUARANTEE FEE 95
SECTION 5.29. CHARGE OVER BUSINESS 96
SECTION 5.30. FURTHER ASSURANCES 96
ARTICLE VI NEGATIVE COVENANTS 96
SECTION 6.1. INDEBTEDNESS 96
SECTION 6.2. LIENS 97
SECTION 6.3. FUNDAMENTAL CHANGES 97
SECTION 6.4. SALE OF ASSETS 97
SECTION 6.5. INVESTMENTS, ACQUISITIONS, ETC. 98
SECTION 6.6. RESTRICTED PAYMENTS 99
SECTION 6.7. LIMITATIONS ON ISSUANCE OF INTERESTS 100
SECTION 6.8. LIMITATIONS ON TRANSFERS OF INTERESTS 101
SECTION 6.9. PAYMENT OF CONSTRUCTION COSTS; OPERATING BUDGET 101
SECTION 6.10. AMENDMENT OF PROJECT DOCUMENTS 102
SECTION 6.11. TERMINATION, ASSIGNMENT OF PROJECT DOCUMENTS 103
SECTION 6.12. APPROVAL OF ADDITIONAL CONTRACTS 104
SECTION 6.13. SALES OF CAPACITY 104
SECTION 6.14. ACCEPTANCE OF PROJECT 105
SECTION 6.15. LEASES 106
SECTION 6.16. CHANGE OF OFFICE 106
SECTION 6.17. CHANGE OF NAME 106
SECTION 6.18. TRANSACTIONS WITH AFFILIATES 106
SECTION 6.19. SALE AND LEASEBACK 106
SECTION 6.20. CAPITAL EXPENDITURES; OTHER PURCHASES OF ASSETS 107
SECTION 6.21. UNRELATED ACTIVITIES; ABANDONMENT 107
SECTION 6.22. SET-OFF 107
SECTION 6.23. SUBSIDIARIES 107
SECTION 6.24. CONCENTRATION OF CASH 108
SECTION 6.25. AMENDMENTS OF ORGANIZATIONAL DOCUMENTS 108
SECTION 6.26. IMMUNITY 108
SECTION 6.27. RESTRICTIVE AGREEMENTS 108
SECTION 6.28. CUMULATIVE CAPACITY SALES REVENUE 109
SECTION 6.29. PRESENT VALUE COVERAGE RATIO 110
SECTION 6.30. INTEREST COVERAGE RATIO 110
ARTICLE VII EVENTS OF DEFAULT 111
ARTICLE VIII ACCOUNTS 117
SECTION 8.1. CREATION OF ACCOUNTS 117
SECTION 8.2. REQUIRED DEPOSITS INTO THE ACCOUNTS 118
SECTION 8.3. DEPOSITS HELD AS CASH COLLATERAL 119
SECTION 8.4. SOURCE OF PAYMENTS; DEPOSITS IRREVOCABLE 120
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SECTION 8.5. BOOKS OF ACCOUNT; STATEMENTS 120
SECTION 8.6. LOCATION OF THE ACCOUNTS 121
SECTION 8.7. RECEIPT BY THE COMPANY 121
SECTION 8.8. PRE-SALE PROCEEDS ACCOUNT 121
SECTION 8.9. CONSTRUCTION ACCOUNT 122
SECTION 8.10. DEBT PROCEEDS ACCOUNT 123
SECTION 8.11. EQUITY PROCEEDS ACCOUNT 123
SECTION 8.12. REVENUE ACCOUNT 124
SECTION 8.13. DEBT RESERVE ACCOUNT 126
SECTION 8.14. OPERATING RESERVE ACCOUNT 126
SECTION 8.15. CURRENT ACCOUNT 126
SECTION 8.16. MAINTENANCE RESERVE ACCOUNT 127
SECTION 8.17. INSURANCE PROCEEDS ACCOUNT 127
SECTION 8.18. SPECIAL PAYMENT ACCOUNT 128
SECTION 8.19. VAT ACCOUNT 128
SECTION 8.20. SALES AND ISSUANCES PROCEEDS ACCOUNT 128
SECTION 8.21. EXCESS REVENUE ACCOUNT 129
SECTION 8.22. PERMITTED SOURCES ACCOUNT 130
SECTION 8.23. CAPACITY UPGRADES RESERVE ACCOUNT 130
SECTION 8.24. DELIVERY OF OFFICER'S CERTIFICATES; TIMING OF PAYMENTS 130
SECTION 8.25. RELEASE OF EXCESS AMOUNTS 131
SECTION 8.26. EVENT OF DEFAULT 131
SECTION 8.27. INVESTMENT 132
SECTION 8.28. STATEMENTS OF ACCOUNTS 132
SECTION 8.29. VALUE 132
SECTION 8.30. OTHER DETERMINATIONS 132
SECTION 8.31. SALES OF PERMITTED INVESTMENTS 133
SECTION 8.32. AVAILABLE CASH 133
SECTION 8.33. TERMINATION 133
ARTICLE IX THE AGENTS 133
ARTICLE X MISCELLANEOUS 136
SECTION 10.1. NOTICES 136
SECTION 10.2. WAIVERS; AMENDMENTS 137
SECTION 10.3. EXPENSES; INDEMNITY; DAMAGE WAIVER 138
SECTION 10.4. SUCCESSORS AND ASSIGNS; CONSENT AND AGREEMENT 141
SECTION 10.5. SURVIVAL 143
SECTION 10.6. COUNTERPARTS; INTEGRATION; EFFECTIVENESS 143
SECTION 10.7. SEVERABILITY 144
SECTION 10.8. RIGHT OF SETOFF 144
SECTION 10.9. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS 144
SECTION 10.10. WAIVER OF SOVEREIGN IMMUNITY 146
SECTION 10.11. JUDGMENT CURRENCY 146
SECTION 10.12. DAMAGE WAIVER 147
SECTION 10.13. WAIVER OF JURY TRIAL 147
SECTION 10.14. HEADINGS 147
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SECTION 10.15. REMOVAL OF CONSULTANTS 147
SECTION 10.16. CONFIDENTIALITY 147
ARTICLE XI ADMINISTRATIVE AGENT 148
SECTION 11.1. TRUST FOR SECURED PARTIES 148
SECTION 11.2. DEFAULT PROCEDURE 148
SECTION 11.3. APPLICATION OF PROCEEDS 149
SECTION 11.4. THE ADMINISTRATIVE AGENT'S RIGHTS, POWERS AND DISCRETIONS 151
SECTION 11.5. RESIGNATION OF ADMINISTRATIVE AGENT AS SECURITY AGENT 157
SECTION 11.6. APPOINTMENT OF ADDITIONAL SECURITY AGENTS 157
SECTION 11.7. COSTS AND INDEMNITIES 158
SECTION 11.8. MISCELLANEOUS 159
SECTION 11.9. ADMINISTRATIVE AGENT AS DIRECT CREDITOR 159
SECTION 11.10. WINDING-UP OF TRUST 159
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SCHEDULES:
Schedule 1.1(i) Certain Calculations
Schedule 1.1(ii) Commitments
Schedule 1.1(iii) Principal Payment Dates/Amortization
Schedule 1.1(iv) Project Budget
Schedule 1.1(v) Sponsor Pre-Sale Capacity Commitments
Schedule 1.1(vi) Project Timetable
Schedule 1.1(vii) Schedule of Sources and Uses
Schedule 1.1(viii) Applicable Margin/Commitment Fees
Schedule 3.6 Capital and Corporate Structure
Schedule 3.7(b) Governmental Acts and Rights of Way
Schedule 3.9 Litigation
Schedule 3.11(a) Real Estate Assets and Leases
Schedule 3.11(b) Collateral Recordings and Filings
Schedule 3.19(b) Contractual Obligations
Schedule 5.10 Insurance
Schedule 5.26 Conditions to Satisfy as to Material Real Estate Assets
Schedule 6.18 Transactions with Affiliates
Schedule 10.1 Notice Addresses
EXHIBITS:
Exhibit A Assignment and Acceptance
Exhibit B Borrowing Notice
Exhibit C Capacity Sales Agreement Provisions
Exhibit D Subsidiary Guarantee Agreement
Exhibit E-1 Company Security Agreements (US)
Exhibit E-2 Company Security Agreements (England)
Exhibit E-3A Company Security Agreements (France)
Exhibit E-3B Charge Over Bank Account(s)
Exhibit E-4 Company Security Agreement (Bermuda)
Exhibit F Continuation/Conversion Notice
Exhibit G Form of Consent
Exhibit H-1 Equity Contribution Agreement (FLAG Atlantic Holdings)
Exhibit H-2 Equity Contribution Agreement (GTS TransAtlantic Holdings)
Exhibit I Projections
Exhibit J Expense Certificate
Exhibit K Shareholder Pledge Agreement
Exhibit L Charge Over Business Agreement
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Exhibit M-1 Pre-Sale Capacity Agreement Letter of Credit (Purchaser as Account Party)
Exhibit M-2 Pre-Sale Capacity Agreement Letter of Credit (Company as Account Party)
Exhibit N-1 Revolving Credit Note
Exhibit N-2 Construction Loan Note
Exhibit N-3 Term Loan Note
Exhibit O-1 Legal Opinion of Bermuda counsel to the Company and the Sponsors
Exhibit ▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ counsel to the Company and the Sponsors
Exhibit O-3 Legal Opinion of French counsel to Alcatel and the Contractor
Exhibit ▇-▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ counsel to the Administrative Agent and Lenders
Exhibit O-5 Legal Opinion of English counsel to the Lenders and Administrative Agent
Exhibit O-6 Legal Opinion of French Counsel to the Lenders and the Administrative
Agent
Exhibit P-1 Limited Guarantee Agreement (FLAG)
Exhibit P-2 Limited Guarantee Agreement (GTS)
Exhibit Q Landlord Consent and Estoppel (U.S. Mortgaged Property)
Exhibit R Lessor Deed (U.K. Mortgaged Property)
Exhibit S Landlord Notice (U.K. Mortgaged Property)
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of October 8, 1999 (as amended, supplemented
or otherwise modified from time to time, this "AGREEMENT"), among FLAG ATLANTIC
LIMITED, a company organized and existing under the laws of Bermuda (the
"COMPANY"), the Lenders (as defined herein), BARCLAYS CAPITAL, as lead arranger
(in such capacity, the "LEAD ARRANGER"), WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH, as syndication agent (in such capacity, the "SYNDICATION
AGENT"), DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, as documentation
agent (in such capacity, the "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").
W I T N E S S E T H:
WHEREAS, capitalized terms used in these recitals shall have the
meanings ascribed thereto in Section 1.1;
WHEREAS, the Company proposes to develop, construct, own, provide,
operate and sell Capacity on a 12,000 kilometer, six fiber pair, submarine fiber
optic cable system connecting the United States to Europe, together with
backhaul systems (some of which may be leased from existing systems) related
thereto (collectively, the "PROJECT");
WHEREAS, in order to finance project costs associated with the design,
engineering, construction and installation of the Project, the Sponsors have
severally agreed to make cash equity contributions to the Company in the
aggregate amount of U.S. $200,000,000, and to fund or otherwise to obtain
Sponsor Pre-Sale Capacity Commitments in the aggregate amount of U.S.
$300,000,000;
WHEREAS, in order (a) to finance the remaining project costs associated
with the design, engineering, construction and installation of the Project, (b)
to pay transaction, legal, financing (including interest expense and fees) and
other related costs, (c) to fund operating and maintenance costs and expenses
and working capital requirements and (d) to the extent of any remaining
availability, to fund the Reserve Accounts, the Company has requested that the
Lenders provide certain extensions of credit hereunder to the Company consisting
of Construction Loan Commitments in an aggregate principal amount of up to
$575,000,000;
WHEREAS, the Company has requested that the Lenders make Revolving
Credit Commitments in an aggregate principal amount of up to $25,000,000; and
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WHEREAS, in order to secure and support the Company's obligations to
the Lenders under the Financing Documents, the Company, its Subsidiaries, and
the Sponsors will enter into the Security Documents;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Defined Terms. Capitalized terms used herein shall have
the meanings assigned to them as follows (such definitions to be equally
applicable to both the singular and plural forms of the terms defined). Any term
defined by reference to an agreement, instrument or other document shall have
the meaning so assigned to it whether or not such agreement, instrument or other
document is in effect.
"ABR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Acceptance" shall mean any of Acceptance (Phase 1) or Acceptance
(Phase 2).
"Acceptance (Phase 1)" means the earlier to occur of (i) the tendering
by the Company to the Contractor (with the consent of the Independent Engineer)
of the Certificate of Commercial Acceptance (Phase 1) or (ii) the provision of
the Certificate of Provisional Acceptance (Phase 1).
"Acceptance (Phase 2)" means the earlier to occur of (i) the tendering
by the Company to the Contractor (with the consent of the Independent Engineer)
of the Certificate of Commercial Acceptance (Phase 2) or (ii) the provision of
the Certificate of Provisional Acceptance (Phase 2).
"Accounts" shall be the collective reference to the Revenue Account,
the Current Account, the Construction Account, the Equity Proceeds Account, the
Pre-Sale Proceeds Account, the Debt Proceeds Account, the Debt Reserve Account,
the Operating Reserve Account, the Insurance Proceeds Account, the Special
Payment Account, the Sales and Issuances Proceeds Account, the Maintenance
Reserve Account, the Excess Revenue Account, the Permitted Sources Account, the
VAT Account, the Capacity Upgrades Reserve Account and each other account
established and maintained pursuant to Article VIII.
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"Additional Borrowing Amount" shall mean as defined in Section 4.2(b).
"Additional Contract" shall mean each contract entered into by the
Company or any Subsidiary thereof after the Closing Date (other than Capacity
Sales Agreements, employment contracts and contracts involving payments by or to
the Company of less than $1,000,000 annually).
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Loan
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" shall have the meaning ascribed thereto in the
preamble hereof, together with each of its successors hereunder.
"Affiliate" shall mean, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Alcatel" shall mean Alcatel, a corporation organized under the laws of
France.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, the Alternate Base Rate shall be determined
without regard to clause (b) of the preceding sentence until such time as the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Laws" shall mean all Requirements of Law, all Governmental
Actions and all applicable laws, statutes, treaties, rules, codes, ordinances,
regulations (including all export laws and regulations related thereto),
certificates, orders, interpretations, licenses and permits of any Governmental
Authority and judgments, decrees, injunctions, writs, orders or like action of
any court, arbitrator or other administrative, judicial or quasi-judicial
tribunal or agency of competent jurisdiction (including those pertaining to
health, safety or the environment).
"Applicable Margin" shall mean, for any day, with respect to any ABR
Loan or Eurodollar Loan, the applicable rate per annum set forth in Part I of
Schedule 1.1.(viii) annexed hereto.
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"Applicable Percentage" shall mean, with respect to (i) the Revolving
Credit Commitment, if any, of any Lender at any time of determination, the
percentage of the total unused Revolving Credit Commitments and outstanding
Revolving Credit Loans represented by such Lender's unused Revolving Credit
Commitment and outstanding Revolving Credit Loans, and (ii) the Construction
Loan Commitment of any Lender at any time of determination, the percentage of
the total unused Construction Loan Commitments and outstanding Construction
Loans represented by such Lender's unused Construction Loan Commitment and
outstanding Construction Loans. To the extent applicable, if either of the
Commitments has terminated or expired, the Applicable Percentages shall be
determined based upon the applicable Commitments most recently in effect, giving
effect to any assignments.
"Approved Fund" shall mean, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Assigned Documents" shall be the collective reference to each
agreement which is being assigned by the Company or any Subsidiary of the
Company to the Administrative Agent pursuant to the relevant Security Document.
"Assignment and Acceptance" shall mean any assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent in accordance with Section 10.4, substantially in the form of Exhibit A or
any other form approved by the Administrative Agent.
"Backhaul Agreements" means those agreements described in Subsection
3.4.2 of the Shareholders Agreement.
"Backhaul Elements" means, collectively, the European Backhaul Element
and the U.S. Backhaul Element.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrowing" shall mean Loans of the same Class and Type, made,
converted or continued on the same date and (in the case of Eurodollar Loans) as
to which a single Interest Period is in effect.
"Borrowing Date" shall mean (a) with respect to Construction Loans
only, prior to the Conversion Date, initially, the Closing Date, and thereafter,
the last Business Day of each month, unless another Business Day is otherwise
specified to be the Borrowing Date for any calendar month by the Company in a
written notice at least thirty (30) days prior to such newly specified Business
Day, in which case such specified Business Day
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shall be the Borrowing Date for that calendar month for all purposes of the
Financing Documents (including the making of Construction Loans under this
Agreement) and (b) with respect to Revolving Credit Loans only, the date
specified in a Borrowing Notice delivered to the Administrative Agent pursuant
to Section 2.3.
"Borrowing Notice" shall mean a notice from the Company, executed by a
Responsible Officer of the Company, substantially in the form of Exhibit B.
"Budget Category" shall mean each of the categories under the Project
Budget.
"Budget Category Amount" shall mean the maximum aggregate amount which
may be drawn down under the Construction Funding Facilities in respect of any
Budget Category.
"Business Day" shall mean any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capacity" shall mean the service offered by the Project consisting of
the right of use of a defined portion of the Project for telecommunication
(including sales of fiber pairs (or capacity thereon)), or, where the context so
requires, the fraction of total capacity for telecommunication service available
on the Project on the relevant segment of the Project referred to in the context
of which the term is used.
"Capacity Commitments" shall mean the aggregate amount of the cash
payments in Dollars that the Sponsors, Capacity Purchasers or other Persons are
obligated to make to the Company or its Subsidiaries for the purchase of
Capacity pursuant to Capacity Sales Agreements.
"Capacity Purchaser" shall mean any international telecommunications
entity or other Person which commits to purchase or lease or otherwise acquire
rights with respect to Capacity pursuant to a Capacity Sales Agreement.
"Capacity Sales Agreements" shall mean all agreements for the sale,
lease or other disposition of Capacity entered into in accordance with Section
6.13 in each case as the same may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Capacity Upgrades" shall mean (a) any and all physical additions,
improvements or upgrades to the Project that are contemplated by the
Construction Contract or the System Configuration to upgrade Capacity in
increments of at least 40 gigabits per second, and (b) any other physical
additions, improvements or upgrades to the Project
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that the Independent Engineer certifies to the Administrative Agent will add to
the overall value of the Project, provided that in the case of (b), such
addition, improvement or upgrade (i) could not reasonably be expected to have an
adverse effect (other than a temporary or minor adverse effect) on the normal
use or operation of the Project, (ii) will not require the Company to enter into
any Additional Contract or otherwise amend any Project Document, except as
permitted by Sections 6.10 and 6.12, (iii) will not otherwise result in a
Default or Event of Default and (iv) could not reasonably be expected to have a
Material Adverse Effect.
"Capacity Upgrades Reserve Account" shall mean the special account
designated by that name established by the Administrative Agent pursuant to
Article VIII.
"Capacity Upgrades Reserve Required Balance" shall mean, as of any date
of determination, an amount equal to the product of (i) in the case of the first
upgrade of the Project to be done by the Company, (x) $147,000 (or such lesser
amount as the Company and the Independent Engineer agree represents the then per
unit cost of upgrading 1024 STM-1's) times the first 615 STM-1's sold by the
Company in respect of which cash proceeds shall have been received in full plus
(y) $88,000 (or such lesser amount as the Company and the Independent Engineer
shall agree is the then per unit cost of upgrading 1024 STM-1's) times any
subsequent STM-1's sold by the Company in respect of which cash proceeds shall
have been received in full and (ii) in the case of any subsequent upgrade of the
Project, $88,000 (or such lesser amount as the Company and the Independent
Engineer shall agree is the then per unit cost of upgrading 1024 STM-1's) times
any subsequent STM-1's sold by the Company in respect of which cash proceeds
shall have been received in full by the Company, in each case less the aggregate
amount of expenditure with regard to the relevant upgrade of Capacity from
September 30, 1999; provided, that sales of fiber pairs shall be excluded for
the purposes of this calculation.
"Capital Lease Obligations" of any Person, shall mean the obligation to
pay rent or other amounts under any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which
obligations are required to be classified and accounted for as capital leases on
a balance sheet of such Person under GAAP, and the amount of such obligations
shall be the capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, and any and all equivalent ownership interests in a Person (other
than a corporation) and any and all warrants or options to purchase any of the
foregoing.
"Cash Equity Contribution Amount" shall mean $200,000,000.
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"Cash Equity Contributions" shall mean the cash equity contributions
required to be made by the Sponsors to the Company pursuant to the Equity
Contribution Agreements, including any such amounts on deposit in a cash
collateral account or the Equity Proceeds Account.
"Cash Operating Expenses" shall mean, for any period, the sum (without
duplication) of the following for the Company and its Subsidiaries: (a) all
salaries, employee benefits and other compensation paid during such period, plus
(b) insurance premiums paid during such period, plus (c) the costs of operating
and maintaining the Project paid during such period, plus (d) property and other
taxes (except income taxes) paid during such period, plus (e) fees for
accounting, legal and other professional services paid during such period, plus
(f) all selling, general and administrative expenses paid during such period,
plus (g) all other cash expenditures relating to operation, maintenance and
administrative costs of the Project paid during such period.
"Casualty Proceeds" shall mean all payments and proceeds of each
insurance policy maintained by the Company or any Subsidiary thereof (or with
respect to which the Company or one of its Subsidiaries is the named insured, a
co-insured or a loss payee) and all compensation, awards, damages or other
payments or relief in respect of any taking of, or in respect of casualty to or
loss of, property, but excluding business interruption insurance and payments in
respect of liability policies.
"Casualty Proceeds Deposits" shall have the meaning ascribed thereto in
Section 8.17(a).
"Certificate of Commercial Acceptance" shall have the meaning ascribed
thereto in the Construction Contract.
"Certificate of Commercial Acceptance (Phase 1)" shall mean the
Certificate of Commercial Acceptance issued in connection with commercial
acceptance of Phase 1 pursuant to the terms of the Construction Contract.
"Certificate of Commercial Acceptance (Phase 2)" shall mean the
Certificate of Commercial Acceptance issued in connection with commercial
acceptance of Phase 2 pursuant to the terms of the Construction Contract.
"Certificate of Provisional Acceptance" shall have the meaning ascribed
thereto in the Construction Contract.
"Certificate of Provisional Acceptance (Phase 1)" shall mean the
Certificate of Provisional Acceptance issued in connection with the Provisional
Acceptance Date (Phase 1).
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16
"Certificate of Provisional Acceptance (Phase 2)" shall mean the
Certificate of Provisional Acceptance issued in connection with the Provisional
Acceptance Date (Phase 2).
"Certificate of Resolutions and Incumbency" shall mean, with respect to
any Person, a certificate of a Responsible Officer and, in the case of (b)
below, the Secretary or an Assistant Secretary of such Person, certifying (a)
that the resolutions of the Board of Directors (or similar governing body) of
such Person (copies of which shall be attached to such certificate) that
authorize the execution, delivery and performance by such Person of each
Transaction Document to which it is or is to become a party and authorize such
Person to enter into the transactions contemplated hereby and thereby are in
full force and effect and have not been amended, modified or supplemented since
the date of their adoption, and (b) the incumbency of the Person or Persons
authorized to execute and deliver such documents on its behalf, together with
exemplary signatures thereof.
"Change in Control" shall mean and shall be deemed to have occurred if
any of the following occurs: (a) FLAG Telecom Holdings Limited shall cease to
directly or indirectly own at least 50% of the issued and outstanding voting
stock of FLAG Atlantic Holdings; or (b) GTS Carrier Services, Inc. shall cease
to directly or indirectly own at least 50% of the issued and outstanding voting
stock of GTS TransAtlantic Holdings; provided, however, that no "Change of
Control" shall be deemed to occur if (i) 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 or (ii)
there shall occur any change in the relative ownership levels of the Sponsors
(or any permitted successor or assignee thereof) solely in connection with a
change in the respective shareholdings of the Sponsors (or any permitted
successor or assignee thereof) under Section 14.3 of the Shareholders Agreement.
"Change in Law" shall mean (a) the adoption of any law, rule or
regulation after the Closing Date, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the Closing Date or (c) compliance by any Lender or any parent of any
Lender with any request, guideline or directive of any Governmental Authority
made or issued after the Closing Date (whether or not having the force of law).
"Charge Over Business Agreement" shall mean the charge over the
business (Nantissement de Fonds de Commerce) substantially in the form set out
in Exhibit L to be entered into between the Administrative Agent and FLAG
Atlantic France S.A.R.L.
"Class" when used in reference to any Loan or Borrowing, refers to
whether such Loan is part of, or the Loans comprising such Borrowing are,
Revolving Credit
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Loans, Construction Loans or Term Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Credit Commitment
or a Construction Loan Commitment.
"Closing Date" shall mean the date of this Agreement.
"Co-Arrangers" means Barclays Capital as Lead Arranger, Dresdner Bank
AG, New York and Grand Cayman Branches, as Documentation Agent and Westdeutsche
Landesbank Girozentrale, New York Branch, as Syndication Agent.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall be the collective reference to (a) the "Collateral"
as such term is defined in any Security Agreement, (b) the "Security" as such
term is defined in any Security Agreement, (c) the Pledged Stock and (d) all
other property, if any, in which a Lien is, or is purported to be, granted to
secure the Obligations (or any portion thereof).
"Commitments" shall mean the Revolving Credit Commitments or the
Construction Loan Commitments, or a combination thereof (as the context
requires).
"Commonly Controlled Entity" shall mean, as to any Person, an entity,
whether or not incorporated, which is under common control with such Person
within the meaning of Section 4001 of ERISA or is part of a group which includes
such Person and which is treated as a single employer under Section 414 of the
Code.
"Company" shall have the meaning ascribed thereto in the preamble
hereof.
"Company's Excess Cash Flow Account" shall have the meaning ascribed
thereto in Section 6.24.
"Company Security Agreements" shall mean the collective reference to
the Company Security Agreement (U.S.), the Company Security Agreement (England),
the Company Security Agreements (France) and the Company Security Agreement
(Bermuda).
"Company Security Agreement (Bermuda)" shall mean the Security
Agreement, dated as of the Closing Date, substantially in the form of Exhibit
E-4, made by the Company in favor of the Administrative Agent, for the benefit
of the Secured Parties, as amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof.
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"Company Security Agreements (France)" shall mean the Security
Agreements, dated as of the Closing Date, substantially in the forms of Exhibits
E-3A and E-3B, made by the Company and/or any of its Subsidiaries in France in
favor of the Administrative Agent, for the benefit of the Secured Parties, as
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"Company Security Agreement (England)" shall mean the Security
Agreement, dated as of the Closing Date, substantially in the form of Exhibit
E-2A, Exhibit E-2B, Exhibit E-2C, made by the Company in England in favor of the
Administrative Agent, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Company Security Agreement (U.S.)" shall mean the Security Agreement,
dated as of the Closing Date, substantially in the form of Exhibit E-1, made by
the Company and any of its Subsidiaries in the U.S. in favor of the
Administrative Agent, for the benefit of the Secured Parties, as amended,
supplemented or otherwise modified from time to time in accordance with the
terms hereof.
"Confidential Materials" shall have the meaning ascribed thereto in
Section 10.16.
"Consents" shall be the collective reference to the Guarantor Consent,
the Contractor Consent and each other consent to assignment, in the form of
Exhibit G as the case may be, to be executed and delivered by each party (other
than the Company) to any Additional Contract which are required to be obtained
and delivered to the Administrative Agent in accordance with Section 6.12 or the
Security Agent in accordance with the Security Documents.
"Consolidated Adjusted EBITDA" shall mean without duplication, for any
period, Cumulative Capacity Sales Revenues (with respect to the Interest
Coverage Ratio, calculation, for the four-fiscal quarter period then ended) plus
other revenues received in cash at any date of determination for such period
from continuing operations, minus Cash Operating Expenses.
"Consolidated Cash Interest Expense" shall mean, for any period,
Consolidated Interest Expense for such period, excluding any amounts not payable
in Cash.
"Consolidated Interest Expense" shall mean, for any period, the amount
of interest expense, both expensed and capitalized, of the Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP for
such period on the aggregate principal amount of their Indebtedness determined
on a consolidated basis in accordance with GAAP.
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"Construction Account" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"Construction Contract" shall mean the FLAG Atlantic Fibre Optic Cable
System Contract, dated as of September 20, 1999, between the Company its
Subsidiaries and the Contractor (including all schedules and appendices
thereto), as amended, supplemented or otherwise modified prior to the Closing
Date and as the same may be further amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Construction Contract Guaranty" shall mean the Guaranty, dated on or
before the date hereof, made by Alcatel in favor of the Company, as amended,
supplemented or otherwise modified prior to the Closing Date and as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Construction Funding Facilities" shall mean, collectively, and without
duplication, the following:
(a) all funds on deposit in the Equity Proceeds Account (or
any cash collateral account into which the equity proceeds are
otherwise paid) and the Debt Proceeds Account;
(b) all amounts available to be funded under this Agreement,
the Limited Guarantee Agreements and the Equity Contribution
Agreements;
(c) all amounts available under (i) the Sponsor Pre-Sale
Capacity Commitments, (ii) Qualifying Pre-Sale Capacity Commitments to
the extent such amounts are payable prior to the Conversion Date and
(iii) any other Capacity Commitments, to the extent such amounts are
received prior to the Conversion Date;
(d) all other funds which are available for the payment of
Project Costs from a source and on terms acceptable in all respects to
the Administrative Agent; and
(e) to the extent not included in (a) through (c) above, all
other amounts on deposit in the Construction Account or the Pre-Sale
Proceeds Account.
"Construction Loan Commitment" shall mean, as to any Construction Loan
Lender, the obligation of such Lender to make Construction Loans to the Company
in an aggregate amount not to exceed, at any one time outstanding, the amount
set forth opposite such Construction Loan Lender's name on Schedule 1.1(ii)
under the heading
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"Construction Loan Commitment" or, in the case of any Construction Loan Lender
that is an assignee, the amount of the assigning Construction Loan Lender's
Construction Loan Commitment assigned to such assignee pursuant to Section 10.4,
in each case as such amount may be adjusted or reduced from time to time as
provided herein.
"Construction Loan Commitment Period" shall mean the period from and
including the Closing Date to and including the Construction Loan Commitment
Termination Date.
"Construction Loan Commitment Termination Date" shall mean the earliest
of (a) the date on which the then outstanding Construction Loans equal the
Construction Loan Commitments then in effect, (b) the Conversion Date and (c)
the date on which the Commitments shall terminate under the terms of the
Financing Documents.
"Construction Loan Lenders" shall mean, at any time of determination,
Lenders having outstanding Construction Loans or unused Construction Loan
Commitments.
"Construction Loan Notes" shall have the meaning ascribed thereto in
Section 2.7(f).
"Construction Loans" shall have the meaning ascribed thereto in Section
2.1(a)(i).
"Construction Management Agreements" shall mean, collectively, (i) the
Construction Management Agreement, dated on or before the date hereof between
the Company and GTS Carrier Services Inc. to provide for the management of
construction of the U.S. and European Backhaul Elements and (ii) the
Construction Management Agreement, dated on or before the date hereof between
the Company and FLAG Telecom Group Services Ltd. to provide for management of
construction of the Subsea Element, as each may be further amended, supplemented
or otherwise modified from time to time in accordance with the terms of this
Agreement.
"Construction Progress Report" shall mean a report to be submitted by
the Company to the Administrative Agent no later than fifteen days prior to the
applicable Borrowing Date in relation to Construction Loans, or prior to a
proposed Equity Withdrawal under Section 4.5, providing (a) an assessment by the
Company of the overall construction progress and cost of the Project since the
date of the last such report and since the Closing Date, together with an
assessment of how such progress and cost compare to the Plan of Work, the
Project Timetable and the Project Budget (including, without limitation, the
Additional Borrowing Amount), (b) a detailed description of any and all material
problems (including, but not limited to, actual and anticipated cost overruns or
delays, if any) encountered or anticipated in connection with the Project since
the date of the last such report, together with an assessment of any impact of
any such problems on the Plan of Work, the Project Timetable and the Project
Budget, (c)
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a detailed description of the proposed solutions to the problems referred to in
clause (b) above, (d) a statement as to the anticipated delivery dates of major
equipment or Supplies for the Project, together with an assessment of how such
delivery dates will impact the Project Timetable and (e) an analysis of such
other matters relating to the Project as the Administrative Agent or the
Independent Engineer shall request.
"Consultants" shall be the collective reference to the Independent
Engineer and the Market Consultant.
"Contest" shall mean, with respect to any tax, Lien, claim or
obligation, a contest with respect thereto pursued in good faith and by
appropriate and timely proceedings diligently conducted, so long as (a) no Lien
(other than Permitted Liens) shall have been filed in connection therewith or
any Lien (other than Permitted Liens) filed in connection therewith shall have
been fully removed from the record by the bonding thereof, (b) except with
respect to any Lien that has been removed from the record by the bonding thereof
in accordance with clause (a), adequate reserves (which shall be in cash unless
the Administrative Agent otherwise agrees) shall have been established with
respect to such tax, Lien, claim or obligation, (c) during the period of such
contest the enforcement of any contested item is effectively stayed, (d) such
contest could not reasonably be expected to involve any material danger of the
sale, forfeiture or loss of any of the Pledged Stock or any material part of the
other Collateral or the Project, title thereto or any interest therein and will
not cause a material interference with any Project Activity and (e) the failure
to pay such tax, Lien, claim or obligation during the pendency of such contest
could not reasonably be expected to have a Material Adverse Effect.
"Continuation/Conversion Notice" shall mean a notice in the form of
Exhibit F, which may be contained in the Borrowing Notice or otherwise, and
which shall be executed by a Responsible Officer of the Company.
"Contract Variation" shall mean any amendment, supplement or other
modification to the Construction Contract and shall include any "Contract
Variation" as such term is defined in the Construction Contract.
"Contractor" shall mean Alcatel Submarine Networks, Alcatel Submarine
Networks Inc. and Alcatel Submarine Networks Limited each a direct or indirect
Subsidiary of Alcatel.
"Contractor Consent" shall mean the consent to and notice of
assignment, in the form of Exhibit G, made by the Contractor in favor of the
Administrative Agent, as the case may be.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or any agreement, instrument, judgment,
order, decree
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or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"Contractual Rights" means all representations, covenants, guarantees,
indemnities and other contractual provisions in favour of the Administrative
Agent (other than any such made or granted solely for its own benefit) made or
granted in or pursuant to any of the Financing Documents.
"Control" shall mean the possession, directly or indirectly, of (a) the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise and/or (b) the ownership of 25% or more of the securities having
ordinary voting power for the election of directors of a Person. "Controlled"
shall have the meaning correlative thereto.
"Conversion Date" shall mean the date on which the conditions precedent
set forth in Section 4.4 have been satisfied and the Construction Loans are
converted into Term Loans in accordance with the terms hereof.
"Critical Timetable Event" shall mean each event set forth in the
Project Timetable under the heading "Critical Timetable Event".
"Cumulative Capacity Sales Revenue" shall mean, for any period, (a) the
aggregate cash amount of Capacity Commitments received from September 30, 1999,
up to and including the end of such period in respect of the sale, lease and/or
other disposition of Capacity which are not subject to return to the applicable
Capacity Purchaser (net of any amount received which is subject to a rebate
obligation) less (b) that portion of the aggregate cash amount referred to in
the preceding clause (a) which is in respect of the Sponsor Pre-Sale Capacity
Commitments.
"Current Account" shall mean the special account designated by that
name established by the Administrative Agent pursuant to Article VIII.
"Debt Proceeds Account" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"Debt Reserve Account" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"Debt Reserve Required Balance" shall mean, as of any date of
determination, an amount (not less than zero) equal to the difference between
(a) the Gross Debt Reserve Required Amount at such time and (b) the aggregate
amount of the Revolving Credit Commitments then in effect.
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"Default" shall mean any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Design Documents" shall mean any document submitted by the Company and
requested by the Independent Engineer as justification that the design and/or
installation of the Project (or any portion thereof) meets the requirements and
specifications set forth in the Construction Contract and the Backhaul
Agreements.
"Designated Event" shall mean, as of any date of determination, the
failure of the Company and its Subsidiaries to be in compliance with Section
6.28, 6.29 or 6.30 as of such date, as set forth in the certificate delivered by
the Company to the Administrative Agent in accordance with Section 5.3(b), or
the failure of the Company to deliver such certificate when required.
"Documentation Agent" as defined in the preamble hereto.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Environmental Laws" shall mean any and all international, national,
state, local or municipal treaties, laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, permits or requirements of any Governmental
Authority relating to the protection of the environment, natural resources or
human health, including, but not limited to, those relating to emissions,
discharge, Releases or threatened Releases of Hazardous Materials into the
environment including, without limitation, ambient air, surface water,
groundwater or land, or relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as now or hereafter in effect.
"Environmental Liability" shall mean any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Company or any Subsidiary
thereof directly or indirectly resulting from or based upon (a) a violation of
any Environmental Law or (b) the release or threatened release of any Hazardous
Materials into the environment.
"EOL Compliance Certificate" shall have the meaning ascribed thereto in
Section 5.20(a).
"Equity Contribution Agreements" shall mean the Equity Contribution
Agreement made by each Sponsor in favor of the Company and the Administrative
Agent, dated as of the Closing Date, substantially in the form of Exhibit H, as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
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"Equity Contribution Letters of Credit" shall mean the irrevocable
standby letters of credit issued or confirmed by financial institutions which
constitute Qualifying Banks (as of the date of such issuance or confirmation) in
favor of the Administrative Agent, supporting the obligations of the Sponsors
under, and in accordance with the terms of, the Equity Contribution Agreements,
as the same may be amended, supplemented or otherwise modified from time to time
in accordance with the terms hereof.
"Equity Proceeds Account" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"Equity Withdrawal" shall mean the making of transfers out of the
Equity Proceeds Account.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" shall mean any entity (whether or not incorporated)
that, together with the Company, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
4043(c) of ERISA or the regulations issued thereunder with respect to a Plan
(other than an event for which the 30-day notice period is waived under
applicable PBGC regulations); (b) the failure to make a required contribution to
any Plan sufficient to give rise to a lien under Section 302(f) of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the taking of any steps by the Company or any of its
ERISA Affiliates to terminate any Plan, if such termination could result in any
liability under Title IV of ERISA with respect to such Plan; (f) the receipt by
the Company or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (g) the incurrence by the Company or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal, within the meaning of Section 4063 of ERISA, from any
multiple-employer Plan; or (h) the receipt by the Company or any ERISA Affiliate
of any notice from any Multiemployer Plan concerning the imposition of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
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"Eurodollar" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"European Backhaul Element" shall have the meaning ascribed thereto in
Annex 5 of the Shareholders Agreement.
"Event of Default" shall mean the occurrence of any of the events
specified in Article VII, provided that any requirement for the giving of
notice, the lapse of time or both, or for the happening of any other condition,
has been satisfied.
"Event of Loss" shall mean (a) the actual or constructive total loss
(by way of condemnation, expropriation or otherwise) of all or substantially all
of the Project, (b) the loss, destruction, damage or constructive loss of a
material portion of the Project (by way of condemnation, expropriation or
otherwise), (c) the cessation or material impairment of the operation of the
Project for a period greater than 90 days or (d) the occurrence of one or more
judgments or decrees being entered in the form of an injunction or similar form
of relief requiring suspension or abandonment of a portion of the Project and
the failure of the Company to have such injunction or similar form of relief
stayed or discharged within 60 days.
"Excess Cash Flow" shall mean, for each quarterly period ending on a
Principal Payment Date, all cash revenue received by the Company during such
period and available after the application of clauses first through eighth of
Section 8.12(b) in accordance with the terms of Article VIII.
"Excess Revenue Account" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
"Excluded Taxes" shall mean, with respect to the Administrative Agent
the Lead Arranger or any Lender (a) income or franchise taxes imposed on (or
incurred by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which such Lender or the Administrative Agent, as the case may
be, is located and (c) in the case of a Lender, any withholding Tax that is
attributable to such Lender's failure to comply with Section 2.15(e).
"Expense Certificate" shall mean a certificate of the Company
substantially in the form of Exhibit J.
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"Facilities Management Agreement" shall mean the Facilities Management
Agreement dated on or before the date hereof among the Company, GTS Carrier
Services, Inc. and FLAG Telecom Group Services Ltd.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" shall mean the fee letter agreement, dated as of the
Closing Date, among the Company, the Lead Arranger and the Administrative Agent,
as amended, supplemented or otherwise modified from time to time.
"Final" shall, (a) as to any Governmental Action issued or transferred
to any Person, mean the status of such Governmental Action as (i) duly issued in
the name of, or validly transferred to, such Person and accepted by such Person,
(ii) in full force and effect and (iii) not then subject to any pending judicial
or administrative proceedings or (b) as to any judicial proceeding, mean the
resolution of such proceeding by a court of competent jurisdiction from which no
appeal is or can be taken.
"Final Maturity Date" shall mean April 30, 2007.
"Financing Documents" shall be the collective reference to this
Agreement, the Notes, the Security Documents, the Interest Hedging Agreements,
the Subsidiary Guarantee Agreements, the Limited Guarantee Agreements, the
Equity Contribution Agreements and the Consents.
"FLAG Atlantic Holdings" shall mean FLAG Atlantic Holdings Limited, a
company organized and existing under the laws of Bermuda.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, as in effect from time to time.
"GTS TransAtlantic Holdings" shall mean GTS TransAtlantic Holdings
Limited, a company organized and existing under the laws of Bermuda.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, claims,
orders, judgments and decrees, licenses, exemptions, publications, filings,
notices to and declarations of or with any Governmental Authority and shall
include, without limitation, permits,
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licenses, authorities and approvals for the Company's cable to cross other
telecommunications cables, pipelines, and the like, to rest or be buried in any
inland waters, territorial waters, continental shelf, contiguous zones,
Exclusive Economic Zones (as defined in the 1982 Convention on the Law of the
Sea) and permissions to cross any beach or land and all other construction,
installation, siting, environmental and operating permits and licenses that are
required for the performance of the Project Activities.
"Governmental Authority" shall mean the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Gross Debt Reserve Required Amount" shall mean, as of any date of
determination, an amount equal to the sum of (a) 50% of all scheduled payments
of interest (based on the then current interest rates on the Loans after giving
effect to any principal prepayments made on or prior to such date) and (b) 50%
of all scheduled payments of principal (before giving effect to any principal
prepayments) on the Term Loans, in each case for the next succeeding twelve
months, provided that the amount set forth in clause (b) shall in no event
exceed the aggregate principal amount of the Term Loans outstanding as of such
date.
"Gross Maintenance Reserve Required Amount" shall mean, as of any date
of determination, an amount (not less than zero) equal to the difference of (a)
the actual Operating Expenses for the preceding six-month period ending on such
date, less (b) 50% of the aggregate of all Operating Payments received by the
Company during the immediately preceding twelve-month period ending on such date
(or, for any date prior to the first anniversary of the Conversion Date, 50% of
the aggregate of all Operating Payments received by the Company since the
Conversion Date, annualized to an annual period).
"Guarantor" shall mean Alcatel and its permitted successors and
assigns.
"Guaranty" of or by any Person (the "guarantor") shall mean any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the
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primary obligor so as to enable the primary obligor to pay such Indebtedness or
other obligation or (d) as an account party in respect of any letter of credit
or letter of guaranty issued to support such Indebtedness or obligation;
provided, that the term Guaranty shall not include endorsements for collection
or deposit in the ordinary course of business.
"Guarantor Consent" shall mean the consent to and notice of assignment,
dated as of the Closing Date, made by Alcatel in favor of the Administrative
Agent, in the form of Exhibit G, as amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Hazardous Materials" shall mean any petroleum or petroleum products or
any chemicals, materials or substances defined as or included in the definition
of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely
hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic
pollutants", "contaminants" or "pollutants", or words of similar import, under
any applicable Environmental Law.
"Hedging Agreement" shall mean any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person shall mean, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind; provided, however, that refunds or credits which the
Company may from time to time be obligated to pay or make under any Capacity
Sales Agreement shall not be considered "Indebtedness", (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person in respect of the deferred purchase price of
property or services (excluding current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary practices),
(d) all Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien on property owned or acquired by such Person, whether or not the
Indebtedness secured thereby has been assumed, provided, however, that the
amount of such Indebtedness shall be the lesser of (x) the fair market value of
such property and (y) the amount of such Indebtedness of others, (e) all
Guaranties by such Person of Indebtedness of others, (f) all obligations of such
Person constituting Capital Lease Obligations, (g) all obligations, contingent
or otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty (other than trade-related letters of credit or letters
of guaranty entered into in the ordinary course of business), (h) all net
obligations of such Person under any Hedging Agreement (including all net
Interest Hedging Obligations) and (i) all obligations, contingent or otherwise,
of such Person in respect of bankers' acceptances; provided, however, that for
the avoidance of doubt, the Company's payment obligations under the Project
Documents shall not constitute "Indebtedness".
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"Indemnified Taxes" shall mean Taxes other than Excluded Taxes.
"Indemnitee" shall have the meaning ascribed thereto in Section
10.3(c).
"Independent Engineer" shall mean BT Worldwide or such other engineer
or engineering firm as may be appointed by the Administrative Agent in
accordance with Section 10.15.
"Initial Principal Payment Date" shall mean the first scheduled
Interest Payment Date in respect of Eurodollar Loans falling after the
Conversion Date (or, in the event that all of the Loans in existence at such
time are ABR Loans, the first scheduled Interest Payment Date in respect of ABR
Loans falling after the Conversion Date).
"Insurance Advisor" shall mean ▇▇▇▇▇ Group, LLC., or any successor
thereof.
"Insurance Proceeds Account" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"Intellectual Property" shall mean, with respect to any Person, all
licenses, trademarks, tradenames, copyrights, patents, technology, know-how,
processes and other such similar agreements and all Software.
"Interest Coverage Ratio" means the ratio, as of the last day of any
fiscal quarter of the Company (and its Subsidiaries, on a consolidated basis)
following the fiscal quarter in which the Conversion Date occurs (but, in any
event, no earlier than the last quarter of 2001), of (i) Consolidated Adjusted
EBITDA for the four-fiscal quarter period then ended, to (ii) Consolidated Cash
Interest Expense for such four-fiscal quarter period, in each case as set forth
in the most recent certificate delivered by the Company to the Administrative
Agent pursuant to Section 5.3(b) in respect of such fiscal period; provided that
for purposes of calculating the Interest Coverage Ratio as of the last day of
each of the first, second and third fiscal quarters occurring after the fiscal
quarter in which the Conversion Date occurs, such ratio shall be determined by
multiplying each of Consolidated Adjusted EBITDA and Consolidated Cash Interest
Expense for the period commencing on the first day of the first full fiscal
quarter following the Conversion Date, and ending as of the end of such fiscal
quarter by (i) 4, in the case of the first fiscal quarter, (ii) 2, in the case
of the second fiscal quarter, and (iii) 4/3, in the case of the third fiscal
quarter.
"Interest Hedging Agreement" means any Hedging Agreement evidencing an
Interest Hedging Transaction.
"Interest Hedging Counterparty" shall mean (a) Barclays Capital, any
other Lender or any agency, branch or Affiliate thereof or (b) any other
financial institution
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whose long-term unsecured indebtedness is rated "A" or better by S&P or "A2" or
better by Moody's, at the time of such financial institution's entry into an
Interest Hedging Transaction with the Company.
"Interest Hedging Obligations" shall mean all indebtedness, liabilities
and obligations of the Company under any agreement or agreements entered into by
the Company and one or more Interest Hedging Counterparties with respect to any
Interest Hedging Transaction.
"Interest Hedging Transaction" shall mean any interest rate swap
transaction, interest "cap" or "collar" transaction and/or any other interest
rate hedging transaction entered into by the Company with an Interest Hedging
Counterparty to hedge the Company's interest rate exposure with respect to the
Loans.
"Interest Payment Date" shall mean (a) with respect to any ABR Loan,
the last day of each month commencing with the Closing Date (or, if any such day
is not a Business Day, the immediately preceding Business Day) and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to the Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, the day
that occurs three months after the first day of such Interest Period (or, if
such day is not a Business Day, the next succeeding Business Day (unless such
next succeeding Business Day would fall in the next calendar month in which case
such payment date shall fall on the next preceding Business Day)).
"Interest Period" shall mean, with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Company may elect in accordance with the terms
hereof; provided that (a) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period, (c)
Interest Periods shall be selected so that sufficient funds are available
without breakage to make scheduled amortization payments on the Loans, (d) if
the Administrative Agent elects an Interest Period under Section 2.5(e), such
Interest Period may be of any period of time and is not subject to the
restriction that it shall have a duration of either one, two, three or six
months, (e) any Interest Period for a Construction Loan that would otherwise
extend beyond the Construction Loan Commitment Termination Date, shall end on
the Construction Loan Commitment Termination Date, (f) any Interest Period for a
Revolving Credit Loan that would otherwise extend beyond the Revolving Credit
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Commitment Termination Date, shall end on the Revolving Credit Commitment
Termination Date and (g) any Interest Period that would otherwise extend beyond
the Final Maturity Date, shall end on the Final Maturity Date. For purposes
hereof, the date of a Borrowing initially shall be the date on which such
Borrowing is made and thereafter shall be the effective date of the most recent
conversion or continuation of such Borrowing.
"Landing License" shall mean each material license or permit required
by Applicable Law specifically for the landing and/or operating of the Project
in England, the United States and France as identified on Schedule 3.7(b)
hereto, and any other country in which the Project may be situated.
"Lead Arranger" shall mean Barclays Capital.
"Lenders" shall be the collective reference to the lenders listed on
the signature pages hereto, together with their respective successors and
permitted assigns hereunder.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the average (rounded
upwards, if necessary, to the next 1/16 of 1%) of the respective rates notified
to the Administrative Agent by each of the Reference Lenders as the rate at
which such Reference Lender is offered Dollar deposits at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such Interest
Period in the London interbank eurodollar market for delivery on the first day
of such Interest Period for the number of days comprised therein and in amount
comparable to the amount of its Eurodollar Loans to be outstanding during such
Interest Period.
"Lien" shall mean, with respect to any asset (a) any mortgage,
assignment, deposit arrangement, deed of trust, lien (statutory or other),
pledge, hypothecation, encumbrance, charge, expropriation (or expropriatory
claims), security interest or similar encumbrance in, on or of such asset and
(b) the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to such
asset.
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"Limited Guarantee Agreements" shall mean, collectively, the Limited
Guarantee Agreement (FLAG) and the Limited Guarantee Agreement (GTS).
"Limited Guarantee Agreement (FLAG)" shall mean the Guarantee
Agreement, dated as of the Closing Date, substantially in the form of Exhibit
P-1, made by FLAG Atlantic Holdings in favor of the Administrative Agent, for
the benefit of the Secured Parties, as amended, supplemented, or otherwise
modified from time to time in accordance with the terms hereof.
"Limited Guarantee Agreement (GTS)" shall mean the Guarantee Agreement,
dated as of the Closing Date, substantially in the form of Exhibit P-2, made by
GTS TransAtlantic Holdings in favor of the Administrative Agent, for the benefit
of the Secured Parties, as amended, supplemented, or otherwise modified from
time to time in accordance with the terms hereof.
"Loans" shall mean, collectively, (a) at any time prior to the
Conversion Date, the Construction Loans and the Revolving Credit Loans and (b)
at any time on or after the Conversion Date, the Term Loans and the Revolving
Credit Loans.
"Maintenance Reserve Account" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"Maintenance Reserve Required Balance" shall mean, as of any date of
determination, an amount (not less than zero) equal to the difference between
(a) the Gross Maintenance Reserve Required Amount at such time and (b) the
excess, if any, of the aggregate amount of the Revolving Credit Commitments at
such time over the Gross Debt Reserve Required Amount at such time.
"Majority Lenders" shall mean, at any time of determination, one or
more Lenders having 51% or more of the aggregate of (i) (a) at any time prior to
the Conversion Date, the Construction Loan Commitments then in effect; (b) at
any time on or after the Conversion Date, the Term Loans then outstanding and
(ii)(a) at any time prior to the Revolving Credit Commitment Termination Date,
the Revolving Credit Commitments then in effect; and (b) at any time on or after
the Revolving Credit Commitment Termination Date, the Revolving Credit Loans
then outstanding.
"Market Consultant" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or such other market
consultant as may be appointed by the Administrative Agent in accordance with
Section 10.15.
"Marketing Agreement" shall mean the Customer Marketing Agreement,
dated on or before the date hereof among the Company, FLAG Atlantic Holdings (or
an Affiliate) and GTS TransAtlantic Holdings (or an Affiliate), as the same may
be further amended, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
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"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, condition (financial or otherwise), or property or
prospects of the Company and its Subsidiaries, taken as a whole, or the Project,
(b) the ownership, use or operation of the Project, (c) the ability of the
Company or any of its Subsidiaries to perform its obligations under any
Financing Document, (d) the value, validity, perfection and enforceability of
the Liens granted to the Administrative Agent under the Security Documents, or
(e) the validity or enforceability of the Financing Documents or the Principal
Project Documents (other than any Capacity Sales Agreement) excluding Capacity
Sales Agreements entered into by Sponsors) or the availability of the remedies
of the Administrative Agent or the Lenders under the Financing Documents;
provided, however, that an adverse change in sales or prospective sales of
Capacity based on changes or perceived changes in external market conditions
(including as a result of increased competition or introductions or applications
of new technology) will not, in and of itself, provide a basis that an event
described above has occurred.
"Material Indebtedness" shall mean Indebtedness (other than the Loans)
in a principal amount exceeding $1,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of the Company in
respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) that the Company would be
required to pay if such Hedging Agreement were terminated at such time.
"Material Real Estate Asset" means (i) any fee-owned Real Estate Asset
(a) having a fair market value in excess of $1,000,000 as of the date of the
acquisition thereof, or (b) on which any of the landing stations or points of
presence are located, or (ii) any Leasehold Property (as defined in Schedule
5.26) (a) on which any of the landing stations or points of presence are located
or (b) (i) with respect to which the aggregate annual payments under the lease
are in excess of $500,000, (ii) that have personal property located thereon with
an aggregate value in excess of $1,000,000 or (iii) that relate to a site the
loss of which would have a material adverse effect on the operation of the
business of the Company and of its Subsidiaries, taken as a whole; provided,
however, that Rights-of-Way and Real Estate Assets with respect to which the
Company (or its Subsidiaries) has a subsea permit (each a "SUBSEA REAL ESTATE
ASSET") shall be excluded from the term "Material Real Estate Asset," in the
event that the granting of a mortgage lien on such Subsea Real Estate Asset
would not be recognized or effective under applicable law.
"Minimum Credit Rating" shall mean, with respect to any Person, a
rating of such Person's senior long-term debt of at least BBB or higher by S&P
and Baa2 or higher by Moody's or if only one of S&P and Moody's rates such
Person, the applicable rating specified in this definition.
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"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean as follows:
(a) with respect to the sale, transfer, lease or other
dispositions of any asset (excluding dispositions of Capacity other
than after the Conversion Date sales of Capacity constituting the sale
of fiber pairs of the Project), an amount certified in reasonable
detail by a Responsible Officer of the Company to the Lenders as the
excess, if any, of (i) the sum of cash received in connection with such
sale, transfer, lease or other disposition over (ii) the sum of (A)
amounts placed in escrow or held as a reserve against any liabilities
directly associated with such sale or disposition (except that, to the
extent and as of the time any such amounts are released from such
escrow or reserve, such amounts shall constitute Net Cash Proceeds),
(B) amounts paid to minority interest holders of such asset and the
principal amount of any Indebtedness (other than Indebtedness under
this Agreement) which is secured by any such asset and which is repaid
in connection with the sale, transfer, lease or other disposition
thereof, (C) the out-of-pocket expenses incurred by the Company in
connection with such sale, transfer, lease or other disposition and (D)
provision for taxes payable by the Company and which are directly
attributable to such sale, transfer, lease or other disposition (as
estimated by the Company in good faith within one month of such sale to
be payable by the Company, provided that to the extent such estimate
shall have exceeded the amount of taxes actually paid, such difference
shall thereupon constitute Net Cash Proceeds);
(b) with respect to the issuance of any Capital Stock, an
amount certified in reasonable detail by a Responsible Officer of the
Company or either Sponsor, as applicable to the Lenders as the excess
of (i) the sum of the cash received in connection with such issuance
over (ii) the underwriting discounts and commissions (if any) and other
fees, out-of-pocket expenses and other costs incurred by the Company or
either Sponsor, as applicable, in connection with such issuance; and
(c) with respect to the incurrence of Indebtedness, an amount
certified in reasonable detail by a Responsible Officer of the Company
to the Lenders as the excess of (i) the sum of the cash received in
connection with such incurrence of Indebtedness over (ii) the fees,
out-of-pocket expenses and other costs incurred by the Company in
connection with such incurrence of Indebtedness.
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"Notes" shall be the collective reference to the Revolving Credit Notes
and (i) prior to the Conversion Date, the Construction Loan Notes, and (ii) on
and after the Conversion Date, the Term Loan Notes.
"Obligations" shall mean (a) all the unpaid principal amount of, and
accrued interest on, the Loans, and all other obligations of the Company, any of
its Subsidiaries or any other Person to the Secured Parties (including, without
limitation, interest accruing at the then applicable rate provided for in the
Financing Documents after the maturity of the Loans and interest accruing at the
then applicable rate provided in the Financing Documents after the filing or
commencement of any bankruptcy, insolvency, reorganization, administration
(whether judicial or not) or like proceeding relating to the Company or any of
its Subsidiaries whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of or in connection with this Agreement, the Notes or any
other Financing Document, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees and disbursements of counsel) or
otherwise and (b) any extension, renewal or refunding of any indebtedness
referred to in clause (a) above.
"Obligors" shall mean the Company and the Company's Subsidiaries.
"Officers' Certificate" shall mean, with respect to any Person, a
certificate of a Responsible Officer of such Person, which states:
(a) the representations and warranties of such Person
contained in Article III and/or in each other Financing Document to
which it is a party are true and accurate on and as of the date such
certificate is required to be delivered as though made on and as of
such date except to the extent that such representations and warranties
relate solely to an earlier date (in which case such representations
and warranties shall have been true and accurate on and as of such
earlier date);
(b) the representations and warranties of such Person
contained in each Project Document to which it is a party are true and
accurate in all material respects on and as of the date such
certificate is required to be delivered except to the extent that such
representations and warranties relate solely to an earlier date (in
which case such representations and warranties shall have been true and
accurate in all material respects on and as of such earlier date);
(c) in the case of the Officers' Certificate to be provided by
the Company, no event or condition has occurred and is continuing, or
would result from the consummation of any transaction contemplated by
the Transaction
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Documents to which it is a party, which constitutes a default by the
Company under any of such Transaction Documents or a Default or Event
of Default;
(d) each Transaction Document to which it is a party remains
in full force and effect; and
(e) in the case of the Officers' Certificate to be provided by
the Company, there has been no material adverse change in the financial
condition or results of operations of such Person since the date of the
financial statements referred to in Section 4.1(x), except as
specifically contemplated by the Project Budget.
"Operating Budget" shall have the meaning ascribed thereto in Section
5.24.
"Operating Expense Transfer Date" shall have the meaning ascribed
thereto in Section 8.12(a).
"Operating Expenses" shall mean, with respect to any period, all
operation, administration and maintenance expenses with respect to such period
which are payable by the Company or any Subsidiary of the Company in such
period, including all selling, general and administrative expenses, all standby
and repair maintenance expenses, landing site operations expense, project
management expense, insurance expense, all commissions on dispositions of
Capacity, all sales, excise and similar taxes and all other Taxes and duties
payable by the Company (excluding income taxes) in respect of operating the
Project; provided, however, in no event shall "Operating Expenses" include (a)
any payments made by the Company to purchasers or lessees of Capacity relating
to such purchase or lease or (b) any payments made by the Company not related to
the transfer of Capacity or other Project Activities.
"Operating Payments" means all payments made to the Company or any
Subsidiary with respect to, or that are allocated to restoration services or to
maintenance and repair of the Project.
"Operating Plan" shall have the meaning ascribed thereto in Section
5.24.
"Operating Projections" shall have the meaning ascribed thereto in
Section 4.1(t).
"Operating Reserve Account" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"Operating Reserve Maximum Balance" shall mean $20,000,000.
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"Operating Year" shall mean initially, the period from the Conversion
Date to the following December 31st and, thereafter, each ensuing calendar year.
"Operations and Maintenance Plan" shall mean the plan prepared in
accordance with the Facilities Management Agreements.
"Organizational Documents" means (a) with respect to any corporation,
its certificate or articles of incorporation, as amended, and its by-laws, or
its memorandum and articles of association, as amended, (b) with respect to any
limited partnership, its certificate of limited partnership, as amended, and its
partnership agreement, as amended, (c) with respect to any general partnership,
its partnership agreement, as amended, (d) with respect to any limited liability
company, its articles of organization, as amended, and its operating agreement,
as amended, and (e) with respect to any US or Bermuda entity, a good standing
certificate and a certificate of compliance, respectively. In the event any term
or condition of this Agreement or any other Financing Document requires any
Organizational Document to be certified by a secretary of state or similar
governmental official, the reference to any such "Organizational Document" shall
only be to a document of a type customarily certified by such governmental
official.
"Other Taxes" shall mean any and all present or future stamp or
documentary Taxes, charges or similar levies arising from any payment hereunder
or from the execution, delivery or enforcement of, or otherwise with respect to,
this Agreement or any other Financing Document.
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Participant" shall have the meaning ascribed thereto in Section
10.4(e).
"Performance Bond" shall mean the letter of credit, dated October 8,
1999 issued by Credit Commercial de France, in favor of the Company in
accordance with Section 48 of the Construction Contract, as amended,
supplemented or otherwise modified prior to the Closing Date and as the same may
be further amended, supplemented or otherwise modified, or replaced from time to
time in accordance with the terms hereof.
"Permitted Investments" shall mean the following:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
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(b) investments in certificates of deposit, banker's
acceptances and time deposits maturing within one hundred eighty (180)
days from the date of acquisition thereof issued or guaranteed by or
placed with, and overnight sweep accounts, money market deposit
accounts issued or offered by, (i) the Administrative Agent or any of
its Affiliates, (ii) any Lender or (iii) any other bank which has a
combined capital and surplus and undivided profits of not less than
$250,000,000;
(c) fully collateralized repurchase agreements with a term of
not more than thirty (30) days for securities described in clause (a)
above and entered into with a financial institution satisfying the
criteria described in clause (b) above; and
(d) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, a credit rating of at least A-2 from S&P or at least P-2
from ▇▇▇▇▇'▇.
"Permitted Liens" shall mean the following:
(a) Liens imposed by law for Taxes that are either not yet due
or that are subject to a Contest;
(b) materialmen's, mechanics', workers', repairmen's,
employees', carriers', warehousemen's and other like Liens relating to
the construction of the Project or otherwise arising in the ordinary
course of business for amounts that either are not more than sixty (60)
days past due or are subject to a Contest;
(c) Liens of any of the types referred to in clause (b) above
that have been bonded for the full amount in dispute (or as to which
other security arrangements satisfactory to the Administrative Agent
have been made);
(d) the rights of the Capacity Purchasers with respect to
portions of the Project;
(e) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfying the conditions for
the continuation of proceedings to contest Taxes set forth in the
definition of the term "Contest";
(f) subordinated Liens granted by Sponsors in favor of other
Sponsors (or guarantors of either Sponsor) on the Capital Stock of the
Company on terms satisfactory to the Administrative Agent;
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(g) subordinated Liens on the Capital Stock of the Company
granted by a Sponsor to the issuing bank of an Equity Contribution
Letter of Credit or to any other Person providing financing to a
Sponsor in connection with such Sponsor's investment in the Company, in
each case on terms satisfactory to the Administrative Agent;
(h) [Deliberately omitted]
(i) Liens created by or arising out of the Security Documents;
(j) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(k) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not interfere with the ordinary conduct of
business of the Company or of the Project;
(l) Liens arising in connection with Permitted Sale
Leasebacks;
(m) Liens arising in connection with Capital Lease Obligations
permitted under Section 6.15; and
(n) any Lien over or conditional assignment of the Company's
rights, including without limitation the right to receive payment,
under a Capacity Sales Agreement, to the extent that such Lien or
conditional assignment is in favor of a financial institution providing
a letter of credit supporting the relevant Capacity Purchaser's payment
obligations under such Capacity Sales Agreement.
"Permitted Sale Leasebacks" shall mean sale leasebacks of real and
personal property constituting a portion of the Project, provided that (a) such
sale leasebacks shall be undertaken for fair value pursuant to a tax program
reasonably satisfactory to the Majority Lenders and recommended by an
internationally recognized tax consultant of the Company, (b) the terms of such
sale leasebacks shall be acceptable to the Majority Lenders and (c) the Net Cash
Proceeds of any sale of assets undertaken in connection therewith shall be
applied to the prepayment of the Loans in accordance with Section 2.9.
"Permitted Sources" shall mean, so long as no Event of Default shall
have occurred and be continuing, the following sources (so long as the funds
from any such
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source has not been provided for or otherwise allocated to another purpose in
accordance with the terms hereof):
(a) funds received by the Company after the Closing Date in
respect of the issuance of Capital Stock of the Company which are not
required to prepay the Loans in accordance with Section 2.9 and are on
deposit in the Sales and Issuances Proceeds Account;
(b) funds actually made available to the Company for its sole
benefit after the application of clauses "first" through "eighth" of
Section 8.12(b) and which are being maintained on deposit in the
Permitted Sources Account or the Company's Excess Cash Flow Account
(or, if such amounts are not on deposit therein, such funds have been
committed to on terms and pursuant to documentation satisfactory to the
Administrative Agent); and
(c) funds made available by parties other than the Company and
its Subsidiaries without any recourse to the Company, its assets (other
than to Capacity to the extent conveyed in accordance with the terms
hereof), any of its Subsidiaries or their respective assets or any
portion of the Project and which funds are being maintained on deposit
in the Permitted Sources Account (or, if such amounts are not on
deposit therein, such funds have been committed to on terms and
pursuant to documentation satisfactory to the Administrative Agent).
"Permitted Sources Account" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"Person" shall mean any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Phase" shall mean any of Phase 1 or Phase 2.
"Phase 1" shall have the meaning ascribed thereto in the Construction
Contract.
"Phase 2" shall have the meaning ascribed thereto in the Construction
Contract.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Company or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Plan of Work" shall mean, collectively, (i) the plan of work in
relation to the Subsea Element, as reflected in Annex 3 to the Construction
Contract and (ii) in respect
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of the Backhaul Element, the plans of work contained in the Backhaul Agreements
calling for the delivery, construction and/or installation of any portion of the
Backhaul Element.
"Pledged Stock" shall mean all Capital Stock of the Company and of each
of the Company's Subsidiaries, together with all other related "Pledged
Collateral" as defined in the Shareholder Pledge Agreement and all other related
"Collateral" or "Security" as defined in the Company Security Agreements.
"Pre-Sale Capacity Agreement Letters of Credit" shall mean the letters
of credit to be issued or confirmed by financial institutions which constitute
Qualifying Banks (as of the date of such issuance or confirmation) on behalf of
certain Capacity Purchasers to support such Capacity Purchaser's payment
obligations under the Capacity Sales Agreement to which such Capacity Purchaser
is a party, such letters of credit to be in the form of Exhibit M-1 or Exhibit
M-2, as the same may be amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
"Pre-Sale Proceeds" shall mean all cash proceeds received by the
Company prior to the Conversion Date in respect of the purchase of Capacity
under any Capacity Sales Agreement.
"Pre-Sale Proceeds Account" shall mean the special account designated
by that name established by the Administrative Agent pursuant to Article VIII.
"Present Value Coverage Ratio" shall have the meaning ascribed thereto
on Schedule 1.1(i).
"Pricing Schedule" shall mean the price lists for the sale, lease or
other disposition of Capacity by the Company, including any discounts for
aggregated purchases, as the same may be amended by the Company from time to
time.
"Prime Rate" shall mean the rate of interest per annum established by
Barclays Bank Plc as its prime or reference or base rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is effective. The Prime Rate
is not necessarily the lowest rate of interest charged to borrowers.
"Principal Payment Date" shall mean the Initial Principal Payment Date
and each subsequent date set forth on Schedule 1.1(iii), or if any such day is
not a Business Day, the preceding Business Day.
"Principal Project Documents" shall be the collective reference to the
following agreements (to the extent such agreements are in effect and have not
been terminated
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or replaced in accordance with the terms hereof): the Construction Management
Agreements, the Construction Contract, the Construction Contract Guaranty, each
Capacity Sales Agreement, the Facilities Management Agreement, the Backhaul
Agreements, the Marketing Agreement and the Performance Bond, and any
replacement of any of the foregoing in accordance with the terms hereof.
"Proceeds" means all receipts or recoveries by the Administrative Agent
(or by any of the Obligors and paid over to the Administrative Agent) pursuant
to, and upon enforcement of, any of the rights and all other monies which are by
the terms of any of the Financing Documents to be applied in accordance with
Section 11.3, after deducting (to the extent not already deducted or retained
prior to such receipt of recovery by the Administrative Agent):
(a) all sums which are by Applicable Law or contract payable
to any Receiver;
(b) all sums which the Administrative Agent is required by the
terms of any Security Document to pay to any other person before
distributing any such receipts or recoveries to any of the Secured
Parties and/or discharging any of the Secured Obligations;
(c) all sums which the Administrative Agent is by Applicable
Law required to pay to any person in priority to the Secured Parties;
(d) (in the case of any proceeds of insurance), all sums to be
applied in accordance with Section 5.20.
"Project" shall have the meaning ascribed thereto in the recitals
hereof, as the same is modified from time to time in accordance with the terms
hereof.
"Project Activities" shall mean (a) the design, development,
engineering, acquisition, installation, construction, landing, completion,
disposition, financing, modification, start-up, testing, operation, ownership,
possession, maintenance and use of the Project (and any portion thereof), (b)
the sale, lease or other disposition of Capacity and (c) all activities related
or incidental to any of the foregoing.
"Project Budget" shall mean the budget, substantially in the form of
Schedule 1.1(iv), as it may be amended in accordance with Section 6.9.
"Project Costs" shall mean all costs and expenses (without duplication)
incurred or to be incurred by the Company or any of its Subsidiaries in
connection with any Project Activity, including:
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(a) the Total Contract Price and any other amounts payable by
the Company pursuant to the Construction Contract;
(b) all costs and expenses payable by the Company in
connection with the performance by it of its covenants in the
Construction Contract;
(c) all costs and expenses payable by the Company or its
Subsidiaries in connection with the Backhaul Agreements;
(d) the cost of insurance;
(e) program management expenses, selling, general and
administrative expenses, in each case to the extent set forth in the
Project Budget and legal, accounting, engineering and financing fees
and expenses;
(f) interest expense;
(g) other fees and expenses payable by the Company or any of
its Subsidiaries to the Administrative Agent and the Lenders pursuant
to the Financing Documents;
(h) all Taxes;
(i) the cost of establishing an inventory of spare parts for
the Project;
(j) recording and filing fees;
(k) funding of the Debt Reserve Account and the other accounts
as provided in Section 5.12 to the extent required; and
(l) all other costs related to any Project Activities.
"Project Documents" shall mean the Shareholders Agreement, each of the
Principal Project Documents, the Consents and each Additional Contract.
"Project Revenues" shall, for any applicable period, mean all revenues
received by the Company and its Subsidiaries including, without limitation, all
revenues and proceeds received from (a) sales, leases or other dispositions of
Capacity (whether in respect of direct or indirect sales of Capacity), (b) the
sale, lease, transfer or other disposition of any assets, (c) any Person in
connection with the performance under any Project Document, (d) joint marketing
agreements or joint venture or similar agreements and (e) any other source
(including Operating Payments, but not including Special
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Payments); provided, however, that Project Revenues shall not, in any event,
include proceeds of the Construction Funding Facilities.
"Project Timetable" shall mean the project timetable, substantially in
the form of Schedule 1.1(vi), as it may be amended with the consent of the
Independent Engineer to the extent reasonably required to be consistent with the
Plan of Work, and as it may be otherwise amended, supplemented or modified from
time to time in accordance with the terms hereof.
"Provisional Acceptance Date" shall mean any of Provisional Acceptance
Date (Phase 1) or Provisional Acceptance Date (Phase 2).
"Provisional Acceptance Date (Phase 1)" shall mean the RFPA for Phase
1.
"Provisional Acceptance Date (Phase 2)" shall mean the RFPA for Phase
2.
"Public Debt Rating" shall mean, with respect to any Person and at any
time of determination, the lowest rating that has been most recently announced
at such time by either S&P or ▇▇▇▇▇'▇, as the case may be, for any class of
long-term senior unsecured debt issued by such Person.
"Qualifying Bank" shall mean a commercial bank with an office for the
presentation of drafts and certificates under a letter of credit located in the
City of New York or London whose long term unsecured debt securities are rated
"A" or better by S&P and "A2" or better by ▇▇▇▇▇'▇ (or whose credit is otherwise
acceptable to the Administrative Agent).
"Qualifying Capacity Purchasers" shall mean, at any time of
determination, (i) any Capacity Purchasers with at least a Minimum Credit Rating
at the time of entry into a Capacity Sales Agreement, provided that if such
Purchaser shall only have a BBB rating from S&P or a Baa2 rating by ▇▇▇▇▇'▇,
then such purchaser shall not be on "negative credit watch" of any credit rating
agency at the time of its entry into a Capacity Sales Agreement and (ii) other
Capacity Purchasers, to the extent their payment obligations under their
respective Capacity Sales Agreements are supported by a Pre-Sale Capacity
Agreement Letter of Credit issued or confirmed by a bank which constitutes a
Qualifying Bank at the time of such issuance or confirmation.
"Qualifying Pre-Sale Capacity Commitments" shall mean the Dollar amount
of Capacity Commitments under executed Capacity Sales Agreements entered into
with Qualifying Capacity Purchasers no later than the date which is three (3)
years after the Conversion Date; provided, however, that "Qualifying Pre-Sale
Capacity Commitments" shall exclude (i) Capacity Commitments by such Persons
which are used to satisfy the Sponsor Pre-Sale Capacity Commitments and (ii) any
unexercised options
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to purchase capacity; provided, further, that such Qualifying Pre-Sale Capacity
Commitments shall be due and payable within three (3) years of the Conversion
Date.
"Qualifying Pre-Sale Capacity Receivables" shall mean the Dollar amount
of Qualifying Pre-Sale Capacity Commitments (including, without limitation, the
Requisite Qualifying Pre-Sales), less any amount of cash paid to the Company to
satisfy Qualifying Pre-Sale Capacity Commitments, less any amount of Qualifying
Pre-Sale Capacity Commitments (i) deemed uncollectible by the Company or (ii)
that are in excess of 90 days past due (upon which the entire unpaid portion of
the Qualifying Pre-Sale Capacity Commitment (including, without limitation, the
unpaid portion of the Requisite Qualifying Pre-Sales) of the relevant Capacity
Purchaser (to the extent not supported by a Pre-Sale Capacity Agreement Letter
of Credit) shall be deemed uncollectible in accordance with (i) above).
"RFPA" shall have the meaning ascribed thereto in the Construction
Contract.
"Real Estate Asset" means any interest in real property (whether
leasehold, fee or freehold, Right-of-Way or otherwise) or any interest in on or
over land of a third party that at any time of determination may be owned by the
Company or any Subsidiary thereof or have been granted to the Company or any
Subsidiary thereof.
"Receiver" shall have the meaning ascribed thereto in the Subsidiary
Debenture and the Company Security Agreement (England).
"Reference Lender" shall be the reference to Barclays Bank Plc.
"Register" shall have the meaning ascribed thereto in Section 10.4(c).
"Related Parties" shall mean, with respect to any specified Person,
such Person's Affiliates and Subsidiaries and the respective directors, officers
and employees of such Person.
"Release" shall mean any release, burial, disposal, discharge,
emission, injection, spillage, leakage, seepage, leaching, dumping, pumping,
pouring, escaping, emptying or placement.
"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than an event for which
the 30-day notice requirement is waived under Subsections .13, .14, .16, .18,
.19 or .20 of PBGC Regulation Section 2615.
"Required Applicable Acceptance Date" shall mean (a) with respect to
Phase 1, June 30, 2001 and (b) with respect to Phase 2, September 30, 2001.
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46
"Required Balance" shall mean, as of any Principal Payment Date or
other date of determination (a) with respect to the Debt Reserve Account, the
Debt Reserve Required Balance, (b) with respect to the Maintenance Reserve
Account, the Maintenance Reserve Required Balance and (c) with respect to the
Capacity Upgrades Reserve Account, the Capacity Upgrades Reserve Required
Balance.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-Laws (or in the case of a partnership, its partnership
agreement) or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation of any Governmental Authority, and any
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.
"Requisite Qualifying Pre-Sales" shall mean (a) cash proceeds under
Capacity Sales Agreements received prior to the Conversion Date plus (b)
Capacity Commitments under executed Capacity Sales Agreements entered into with
Requisite Qualifying Capacity Purchasers no later than the date immediately
preceding the date on which the Company draws Loans resulting in there being in
excess of $190,000,000 of Loans outstanding; provided, however, that "Requisite
Qualifying Pre-Sales" shall exclude (i) Capacity Commitments by such Persons
which are used to satisfy the Sponsor Pre-Sale Capacity Commitments and (ii) any
unexercised options to purchase capacity; provided, further, that such Requisite
Qualifying Pre-Sales shall be due and payable in full by the Conversion Date.
"Requisite Qualifying Capacity Purchasers" shall mean, at any time of
determination, (i) any Capacity Purchasers with at least a Minimum Credit Rating
at the time of entry into a Capacity Sales Agreement, and (ii) other Capacity
Purchasers, to the extent their payment obligations under their respective
Capacity Sales Agreements are supported by a Pre-Sale Capacity Agreement Letter
of Credit issued or confirmed by a bank which constitutes a Qualifying Bank at
the time of such issuance or confirmation.
"Responsible Officer" shall mean, with respect to any Person, the
Chairman, Chief Financial Officer, President, Treasurer or other authorized
representative of any such Person.
"Restricted Payment" shall mean (i) any dividend or distribution
(whether in cash, securities or other property) with respect to any shares of
any class of Capital Stock of the Company, (ii) any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such shares of Capital Stock of the Company or any option,
warrant or other right to acquire any such shares of Capital Stock of the
Company and (iii) any payment by the Company to a Related Party
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of the Company or either Sponsor under any Project Document to which such
Related Party is also a party.
"Revenue Account" shall mean the special account designated by that
name established by the Administrative Agent pursuant to Article VIII.
"Revolving Credit Availability Period" shall mean, with respect to any
Revolving Credit Loan, the period from and including the Closing Date to but not
including the Revolving Credit Commitment Termination Date.
"Revolving Credit Commitment" shall mean, as to any Revolving Credit
Lender, the obligation of such Revolving Credit Lender to make Revolving Credit
Loans to the Company in an aggregate amount not to exceed, at any one time
outstanding, the amount set forth opposite such Revolving Credit Lender's name
on Schedule 1.1(ii) under the heading "Revolving Credit Commitment" or, in the
case of any Revolving Credit Lender that is an assignee, the amount of the
assigning Revolving Credit Lender's Revolving Credit Commitment assigned to such
assignee pursuant to Section 10.4, in each case as such amount may be adjusted
or reduced from time to time as provided herein.
"Revolving Credit Commitment Termination Date" shall mean the earlier
to occur of (a) April 30, 2006 and (b) the date on which the Commitments shall
terminate under the terms of the Financing Documents.
"Revolving Credit Lenders" shall mean, to the extent applicable, at any
time of determination, Lenders having outstanding Revolving Credit Loans or
unused Revolving Credit Commitments.
"Revolving Credit Loans" shall have the meaning ascribed thereto in
Section 2.1.
"Revolving Credit Note" shall have the meaning ascribed thereto in
Section 2.7(f).
"Rights-of-Way" shall mean all easements, rights-of-way and other
similar real property interests and all consents required or reasonably
necessary for access to the premises where the Project is located or any Project
Activity is to be performed, and to allow the Company's cable to cross other
telecommunications cables, pipelines, and the like, to rest or be buried in any
inland waters, territorial waters, continental shelf, contiguous zones,
Exclusive Economic Zones (as defined in the 1982 Convention on the Law of the
Sea) and permissions required to enable the Company's cable to cross any beach
or land and all other construction, installation, siting, environmental and
operating permits and licenses that are required for the performance of the
Project Activities.
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"S&P" shall mean Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor thereto.
"Sales and Issuances Proceeds Account" shall mean the special account
designated by that name established by the Administrative Agent pursuant to
Article VIII.
"Schedule of Sources and Uses " shall mean the Schedule of Sources and
Uses as set forth on Schedule 1.1(vii), as amended from time to time.
"Secured Parties" shall be the collective reference to the
Administrative Agent, the Lenders and the Interest Hedging Counterparties
described in clause (a) of the definition thereof.
"Security Agreements" shall be the collective reference to the Company
Security Agreement (US), the Company Security Agreement (England), the Company
Security Agreements (France), the Company Security Agreement (Bermuda) and the
Subsidiary Security Agreements.
"Security Documents" shall be the collective reference to the Security
Agreements, the Shareholder Pledge Agreement and any other document pursuant to
which a security interest is, or is purported to be, granted to secure the
Obligations.
"Shareholders Agreement" shall mean the Agreement, dated as of October
7, 1999 by and between FLAG Atlantic Holdings and GTS TransAtlantic Holdings, as
amended, supplemented or otherwise modified prior to the Closing Date and as the
same may be further amended, supplemented or otherwise modified from time to
time in accordance with the terms hereof.
"Shareholder Pledge Agreement" shall mean the Pledge Agreement, dated
as of the Closing Date, substantially in the form of Exhibit K, made by FLAG
Atlantic Holdings and GTS TransAtlantic Holdings in favor of the Administrative
Agent, for the benefit of the Secured Parties, as amended, supplemented or
otherwise modified from time to time in accordance with the terms hereof.
"Single Employer Plan" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"Software" shall have the meaning ascribed thereto in the Construction
Contract.
"Special Payment Account" shall mean the special account designated by
that name established by the Administrative Agent pursuant to Article VIII.
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"Special Payments" shall mean (a) all payments made by the Contractor
under the Construction Contract and all other payments made by the Contractor or
Alcatel in respect of any breach or failure by the Contractor to perform its
obligations under the Construction Contract, whether as a result of any
proceeding, settlement or otherwise, and (b) all payments made under the
Performance Bond.
"Specifications" shall mean the specifications for the Project set
forth in the Construction Contract and those Backhaul Agreements which call for
the delivery, construction and/or installation of any portion of the Backhaul
Element, as amended from time to time.
"Specified Participant" shall be the collective reference to the
Company and at any time prior to the expiration of the Warranty Period, Alcatel.
"Sponsor Pre-Sale Capacity Commitments" shall mean the Dollar amount of
Capacity Commitments of each Sponsor (or its Affiliates), which Capacity
Commitments shall be in the aggregate amount of $300,000,000, consisting of (i)
$200,000,000 of Capacity Commitments by GTS TransAtlantic Holdings and (ii)
$100,000,000 of Capacity Commitments by, or arranged by, FLAG Atlantic Holdings,
which Capacity Commitments (under both (i) and (ii) above) are as set forth on
Schedule 1.1(v) describing the contract purchaser, dollar amount, dates for
payment and letter of credit issuer supporting payment (if any).
"Sponsors" shall mean each of FLAG Atlantic Holdings and GTS
TransAtlantic Holdings (or any successor thereto or transferee thereof).
"Statutory Reserve Rate" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Administrative Agent is
subject for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"STM-1" means a 155.520 Mbits per second both way digital line section
between two interfaces on the Project, together with such interfaces, in
accordance with the International Telecommunications Union Telecommunications
Standardization Sector (previously known as CCITT) recommendations and shall
mean the minimum unit in which Capacity is disposed of from time to time.
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"Stock Option Plan" shall mean a stock option plan to be created by the
Company for the benefit of certain employees of the Company and/or any of its
Subsidiaries.
"Subject Collateral" shall mean all Collateral a security interest in
which can be perfected by the taking of action in respect of the United States,
Bermuda, England and Wales or France.
"Subsea Element" shall have the meaning ascribed thereto in Annex 4 of
the Shareholders Agreement.
"Subsidiary" shall mean, as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person.
"Subsidiary Debenture" shall mean a debenture, substantially in the
form of Exhibit E-2, entered into between FLAG Atlantic UK Limited and the
Administrative Agent.
"Subsidiary Guarantee Agreement" shall mean the Subsidiary Guarantee
Agreement, substantially in the form of Exhibit D, made by each Subsidiary in
favor of the Administrative Agent for the benefit of the Secured Parties.
"Subsidiary Security Agreements" shall be the collective reference to
the Subsidiary Debenture and all other security agreements entered into by any
Subsidiary of the Company pursuant to Section 4.1(c) and Section 6.23 (b), as
the same may be amended, supplemented or otherwise modified from time to time in
accordance with the terms hereof.
"Supplies" shall have the meaning ascribed thereto in the Construction
Contract.
"Syndication Agent" as defined in the preamble hereto.
"System Configuration" shall mean the configuration of the Project as
described on Annex 4 to the Construction Contract.
"Tax" or "Taxes" shall mean any and all present or future fees
(including, without limitation, documentation, recording, license and
registration fees), taxes (including, without limitation, net income, franchise,
value added, ad valorem, gross
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income, gross receipts, sales, use, rental, property (personal and real,
tangible and intangible) and stamp taxes), levies, imposts, duties, deductions,
charges, assessments or withholdings of any nature whatsoever, general or
special, ordinary or extraordinary, imposed or assessed by any Governmental
Authority, together with any and all penalties, fines, additions to tax and
interest thereon and including any and all liabilities, losses, expenses and
costs of any kind whatsoever that are in the nature of taxes.
"Technical Requirements" shall have the meaning ascribed thereto in the
Construction Contract.
"Term Loan Notes" shall have the meaning ascribed thereto in Section
2.7(f).
"Term Loans" shall have the meaning ascribed thereto in Section
2.1(b)(i).
"Total Contract Price" shall have the meaning ascribed to the term
"Contract Sum" in the Construction Contract.
"Total Utilization of Revolving Credit Commitments" means, as at any
date of determination, the aggregate principal amount of all outstanding
Revolving Credit Loans.
"Transaction Documents" shall be the collective reference to the
Financing Documents and the Project Documents.
"Type" when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"Voting Stock" shall mean, with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling the holders
thereof to vote under ordinary circumstances in the election of members of the
board of directors or other governing body of such Person.
"UCC" or "Uniform Commercial Code" shall mean the Uniform Commercial
Code or any comparable law as in effect in any applicable jurisdiction.
"U.S." shall mean the United States of America.
"U.S. Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978, as
amended, as the same may be further amended, and any other Applicable Law with
respect to bankruptcy, insolvency or reorganization that is a successor thereto.
"U.S. Backhaul Element" shall have the meaning ascribed thereto in
Annex 5 of the Shareholders Agreement.
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"VAT Account" shall mean the special account designated by that name
established by the Collateral Trustee pursuant to Article VIII.
"Warranty Period" shall have the meaning ascribed thereto in the
Construction Contract.
"Withdrawal Liability" shall mean liability to a Multiemployer Plan as
a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Work" shall mean any and all services, functions, duties,
responsibilities or other obligations to be undertaken and performed by any
contractor pursuant to the Construction Contract, including, but not limited to,
all "Work" and "Services" as such terms are defined in the Construction
Contract, and the provision of all labor, material and services utilized in the
design, construction, installation, engineering, equipping and testing of the
Project.
"Year 2000 Problem" shall mean any significant risk that computer
hardware, software or equipment containing embedded microchips essential to the
business or operations of the Company or any of its Subsidiaries will not, in
the case of dates or time periods occurring after December 31, 1999, function at
least as effectively and reliably as in the case of times and time periods
occurring before January 1, 2000, including the making of accurate leap year
calculations.
SECTION 1.2. Classification of Loans and Borrowings. For purposes
hereof, Loans may be classified and referred to by Class (e.g., a "Revolving
Credit Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g.,
a "Eurodollar Revolving Credit Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Revolving Credit Borrowing") or by Type (e.g., a
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
Credit Borrowing").
SECTION 1.3. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as amended, supplemented, or
otherwise modified from time to time (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
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import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.4. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time.
ARTICLE II
COMMITMENTS AND LOANS
SECTION 2.1. Commitments; Conversion Date.
(a) Commitments.
(i) Subject to the terms and conditions set forth
herein, each Construction Loan Lender severally agrees to make
construction loans (collectively, the "CONSTRUCTION LOANS") to the
Company from time to time during the Construction Loan Commitment
Period in an aggregate principal amount at any one time outstanding not
to exceed such Construction Loan Lender's Construction Loan Commitment
at such time.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Company may borrow, prepay but not reborrow any Construction Loans.
(ii) During the Revolving Credit Availability Period,
subject to the terms and conditions hereof, each Revolving Credit
Lender severally agrees to make Revolving Credit Loans to the Company
in the aggregate amount up to but not exceeding such Revolving Credit
Lender's Revolving Credit Commitment; provided, after giving effect to
the making of any Revolving Credit Loans in no event shall the Total
Utilization of Revolving Credit Commitments exceed the aggregate amount
of Revolving Credit Commitments then in effect. Amounts borrowed
pursuant to this Section 2.1(a)(ii) may be repaid and reborrowed during
the Revolving Credit Commitment Period; provided, however, that any
amounts borrowed and repaid prior to the Conversion Date may only be
reborrowed after the Conversion Date. Each Revolving Credit Lender's
Revolving Credit Commitment shall expire on the Revolving Credit
Commitment Termination Date and all Revolving Credit Loans and all
other amounts owed hereunder with respect to the Revolving
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Credit Loans and the Revolving Credit Commitments shall be paid in full
no later than the Final Maturity Date.
(b) Conversion Date.
(i) Subject to the terms and conditions set forth
herein, on the Conversion Date all Construction Loans then outstanding
shall convert into outstanding Term Loans (the "TERM LOANS") without
any action required to be taken by the Company, the Administrative
Agent, any Lender or any other Person. On and after the Conversion
Date, all references to each Construction Loan shall be a reference to
a Term Loan and each Lender holding outstanding Construction Loans on
the Conversion Date shall thereafter be deemed to be holding Term Loans
of the same principal amount as the applicable Construction Loans. Each
Term Loan as converted from a Construction Loan on the Conversion Date
shall be subject to each of the terms and conditions hereof and of each
other Financing Document applicable to Term Loans.
SECTION 2.2. Loans and Borrowings. (a) Each Loan shall be made as part
of a Borrowing consisting of Loans of the same Class and Type made by the
applicable Lenders ratably in accordance with their Applicable Percentage of
such Commitments of the applicable Class. The failure of any Lender to make any
Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; provided that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Subject to Section 2.12, each Borrowing of a Class shall
be comprised entirely of ABR Loans or Eurodollar Loans as the Company may
request in accordance herewith. Each Lender, at its option, may make any
Eurodollar Loan by causing any domestic or foreign branch of such Lender to make
such Loan; provided that any exercise of such option shall not affect the
obligation of the Company to repay such Loan in accordance with the terms hereof
and shall not increase the cost to the Company with respect to such Loan.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000, and at the time
each ABR Borrowing is made, such Borrowing shall be in an aggregate amount that
is an integral multiple of $1,000,000 and not less than $5,000,000; provided
that any Borrowing may be in an aggregate amount that is equal to the entire
unused balance of the total Revolving Credit Commitments or the total
Construction Loan Commitments, as the case may be. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not at any time be more than a total of ten (10) Eurodollar Borrowings
outstanding.
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(d) Notwithstanding any other provision hereof, the Company
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Final Maturity Date.
SECTION 2.3. Requests for Borrowings. To request a Borrowing, the
Company shall: (i) in the case of Construction Loans deliver a draft Borrowing
Notice to the Administrative Agent and the Independent Engineer not later than
11:00 a.m., New York City time, five (5) Business Days prior to a proposed
Borrowing Date and the Independent Engineer shall review and confirm to the
Administrative Agent and the Company, or revise and send back to the Company,
such draft Borrowing Notice not later than 11:00 a.m. New York City time, three
(3) Business Days prior to the proposed Borrowing Date (and any failure to
respond within such time shall be deemed to be a confirmation of such draft
Borrowing Notice), such review to be based on the information provided under the
Construction Progress Report delivered to the Independent Engineer in connection
with such proposed Borrowing; and (ii) deliver a Borrowing Notice to the
Administrative Agent (a) in the case of a Eurodollar Borrowing, not later than
11:00 a.m., New York City time, three Business Days before the proposed
Borrowing Date or (b) in the case of an ABR Borrowing, not later than 11:00
a.m., New York City time, one Business Day before the proposed Borrowing Date.
Each such Borrowing Notice shall be irrevocable. Each such Borrowing Notice
shall specify the following information in compliance with Section 2.2:
(a) whether the requested Borrowing is to be a Revolving
Credit Borrowing and/or a Construction Loan Borrowing;
(b) the aggregate amount of each requested Borrowing;
(c) the Borrowing Date of such Borrowing;
(d) whether each such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(e) in the case of any Eurodollar Borrowing, the initial
Interest Period to be applicable thereto.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be a Eurodollar Borrowing. If no Interest Period is specified
with respect to any requested Eurodollar Borrowing, then the Company shall be
deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Notice in accordance with this Section, the
Administrative Agent shall advise each applicable Lender of the details thereof
and of the amount of such Lender's Loan to be made as part of the requested
Borrowing.
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SECTION 2.4. Funding of Borrowings. (a) Each Lender shall make its
Applicable Percentage of the Loans to be made hereunder on the proposed date
thereof by wire transfer of immediately available funds by 12:00 noon, New York
City time, to the account of the Administrative Agent most recently designated
by it for such purpose by notice to the Lenders. The Administrative Agent will
make such Loans available to the Company by (i) with respect to Construction
Loans made on the Closing Date or any Revolving Loans, promptly distributing the
amounts so received, in like funds, in accordance with the instructions set
forth in the related Borrowing Notice, provided such instructions are (in the
case of such Construction Loans) consistent with the Schedule of Sources and
Uses, and (ii) with respect to all other Construction Loans, promptly crediting
the amounts so received, in like funds, to the Debt Proceeds Account.
(b) Unless the Administrative Agent shall have received notice
from a Lender prior to the proposed date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's Applicable
Percentage of such Borrowing, the Administrative Agent may assume that such
Lender has made such Applicable Percentage available on such date in accordance
with paragraph (a) of this Section 2.4 and may, in reliance upon such
assumption, make available to the Company a corresponding amount. In such event,
if a Lender has not in fact made its share of the applicable Borrowing available
to the Administrative Agent, then the applicable Lender and the Company
severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the
date such amount is made available to the Company to but excluding the date of
payment to the Administrative Agent, at (i) in the case of such Lender, the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Company, the interest rate applicable to
ABR Revolving Credit Loans. If such Lender pays such amount to the
Administrative Agent, then such amount shall constitute such Lender's Loan
included in such Borrowing.
SECTION 2.5. Interest Elections. (a) Each Borrowing shall be of the
Type and, in the case of a Eurodollar Borrowing, shall have an initial Interest
Period, as specified in the applicable Borrowing Notice. Thereafter, the Company
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section 2.5 or as otherwise provided in
Section 2.3. The Company may elect different options with respect to different
portions of the affected Borrowing of any Class, in which case each such portion
shall be allocated ratably among the Lenders of such Class holding the Loans of
such Class comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Company
shall notify the Administrative Agent of such election by delivering a
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Continuation/Conversion Notice to the Administrative Agent by the time that a
Borrowing Notice would be required under Section 2.3 if the Company were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such notice shall be irrevocable.
(c) Each Continuation/Conversion Notice shall specify the
following information in compliance with Section 2.2:
(i) the Borrowing to which such
Continuation/Conversion Notice applies and, if different options are
being elected with respect to different portions thereof, the portions
thereof to be allocated to each resulting Borrowing (in which case the
information to be specified pursuant to clauses (iii) and (iv) below
shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant
to such Continuation/Conversion Notice, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar
Borrowing, the Interest Period to be applicable thereto after giving
effect to such election.
If any such Continuation/Conversion Notice requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Company shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of a Continuation/Conversion
Notice, the Administrative Agent shall advise the applicable Lenders of the
details thereof and of such Lender's portion of each resulting Borrowing.
(e) Subject to Sections 2.2 and 2.12 and the other provisions
of this Section, if the Company fails to deliver a timely
Continuation/Conversion Notice with respect to a Eurodollar Borrowing prior to
the end of the Interest Period applicable thereto, then the Company shall be
deemed to have selected to continue such Borrowing as a Eurodollar Borrowing
with an Interest Period of one month's duration. Notwithstanding any contrary
provision hereof, if an Event of Default as described in paragraph (a) of
Article VII (or any other Event of Default if the Administrative Agent so
elects) has occurred and is continuing and the Administrative Agent so notifies
the Company, then, so long as such Event of Default is continuing, if the
Company wishes to continue any Borrowing as, or convert any Borrowing to, a
Eurodollar Borrowing, the Administrative Agent shall have the right to elect the
Interest Period for such Eurodollar Borrowing, which Interest Period may be of
any period of time and is not subject to the restriction that it shall have the
duration of either one, two, three or six months.
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SECTION 2.6. Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) the Construction Loan Commitments shall terminate on
the Construction Loan Commitment Termination Date, and (ii) the Revolving Credit
Commitments shall terminate on the Revolving Credit Commitment Termination Date.
(b) (i) The Company shall notify the Administrative Agent
of any election to terminate or reduce the Commitments under paragraph (c) of
this Section at least three (3) Business Days prior to the effective date of
such termination or reduction, specifying such election and the effective date
thereof.
(ii) The Company shall pay Project Costs first with
the cash proceeds from sales of Capacity. The Company shall notify the
Administrative Agent of any election to pay Project Costs with any
funds other than those available under the Loans, the Sponsor Pre-Sale
Capacity Commitments and the Equity Contribution Agreements. The
Construction Loan Commitments shall automatically be reduced by an
amount equal to the amount of Project Costs being paid with such funds,
other than the portion thereof attributable to Sponsor Pre-Sale
Capacity Commitments.
(iii) Promptly following receipt of any notice under
clause (i) or (ii), the Administrative Agent shall advise each
applicable Lender of the contents thereof and the resulting
Construction Loan Commitment amount (which amounts shall be determined
as of such date of reduction in the manner specified in Section
2.2(a)). Each notice delivered by the Company pursuant to this Section
shall be irrevocable. Any termination or reduction of any Commitment
shall be permanent. Each reduction of any Commitment shall be made
ratably among the applicable Lenders in accordance with their
respective Commitments.
(c) The Company may at any time terminate, or from time to
time reduce, either or both the Revolving Credit Commitments and the
Construction Loan Commitments; provided that each reduction of the Commitments
shall be in an amount that is an integral multiple of $1,000,000.
SECTION 2.7. Repayment of Loans; Evidence of Debt. (a) The Company
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Revolving Credit Lender, the then unpaid principal amount of
each Revolving Credit Loan of such Revolving Credit Lender on the Final Maturity
Date (together with accrued interest thereon).
(b) The Company hereby unconditionally promises to pay to the
Administrative Agent, for the benefit of the Term Lenders, the aggregate unpaid
principal amount of the Term Loans, in quarterly installments on Principal
Payment
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Dates, commencing on the Initial Principal Payment Date, in an amount for each
such Principal Payment Date as set forth in Schedule 1.1(iii) under the heading
"Amortization". To the extent not previously paid, all Term Loans shall be due
and payable on the Final Maturity Date. Each repayment of Term Loan Borrowings
shall be applied to repay any outstanding ABR Term Loan Borrowings first, and
then to outstanding Eurodollar Term Loan Borrowings in the order of the
remaining duration of their respective Interest Periods (the Borrowing with the
shortest remaining Interest Period to be repaid first). Repayments of Term Loan
Borrowings shall be accompanied by accrued interest thereon.
(c) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Company to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(d) The Administrative Agent shall maintain the Register
pursuant to Section 10.4(c) and a subaccount therein for each Lender, in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Company to each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each Lender's
share thereof.
(e) The entries made in the Register maintained pursuant to
paragraph (d) of this Section shall constitute prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts
pursuant to Sections 2.7(c) or (d) or any error therein shall not in any manner
affect the obligation of the Company to repay the Loans in accordance with the
terms hereof.
(f) The Company agrees that, upon the request by the
Administrative Agent on behalf of any Lender, the Company will execute and
deliver to such Lender, as applicable:
(i) a promissory note of the Company payable to such
Lender and its registered assigns evidencing the Revolving Credit Loans
of such Lender and substantially in the form of Exhibit N-1 with
appropriate insertions as to date and principal amount (each, a
"Revolving Credit Note");
(ii) prior to the Conversion Date, a promissory note
of the Company payable to such Lender and its registered assigns
evidencing the Construction Loans of such Lender and substantially in
the form of Exhibit N-2 with appropriate insertions as to date and
principal amount (each, a "Construction Loan Note"); and
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(iii) on and after the Conversion Date, and in
exchange for the return to the Company of the corresponding
Construction Loan Note(s) (if any) marked "canceled" by each Lender who
holds such note, a promissory note of the Company payable to such
Lender and its registered assigns evidencing the Term Loans of such
Lender and substantially in the form of Exhibit N-3, as applicable,
with appropriate insertions as to date and principal amount (each, a
"Term Loan Note").
Thereafter, the Loans evidenced by any such Note and interest thereon shall at
all times (including after assignment pursuant to Section 10.4) be represented
by one or more Notes payable to the payee named therein and its registered
assigns. A Note and the obligation evidenced thereby may be assigned or
otherwise transferred in whole or in part only as part of an assignment under
this Agreement in accordance with Section 10.4 and only by registration of such
assignment or transfer of such Note and the obligation evidenced thereby in the
Register (and each Note shall expressly so provide). Any assignment or transfer
of all or part of an obligation evidenced by a Note shall be registered in the
Register only upon surrender for registration of assignment or transfer of the
Note evidencing such obligation, accompanied by an Assignment and Acceptance
duly executed by the assignor thereof, and thereupon, if requested by the
assignee, one or more new Notes shall be issued to the designated assignee and
the old Note shall be returned by the Administrative Agent to the Company marked
"canceled". No assignment of a Note and the obligation evidenced thereby shall
be effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
SECTION 2.8. Optional Prepayments of Loans. (a) The Company shall have
the right at any time and from time to time to prepay any Borrowing in whole or
in part, without premium or penalty (out of funds available to the Company after
the application of clauses "first" through "eighth" of Section 8.12(b)) subject
to prior notice in accordance with paragraph (b) of this Section and subject to
the provisions of Section 2.14.
(b) The Company shall notify the Administrative Agent in
writing of any optional prepayment hereunder, not later than 11:00 a.m., New
York City time, five (5) Business Days before the date of prepayment. Each such
notice shall be irrevocable and shall specify the date and amount of prepayment
and whether the prepayment is (i) of Construction Loans, Term Loans, Revolving
Credit Loans or a combination thereof and (ii) of Eurodollar Loans, ABR Loans or
a combination thereof, and, in each case if a combination thereof, the principal
amount allocable to each Class, and shall specify how such prepayment shall be
applied to the remaining installments of the Loans. Promptly following receipt
of any such notice, the Administrative Agent shall advise the applicable Lenders
of the contents thereof. Partial optional prepayments shall be in a minimum
aggregate principal amount of $1,000,000 and integral multiples
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of $1,000,000 in excess thereof or, if less, the Applicable Percentage of the
Loans being prepaid or the entire amount of a Borrowing for which the date of
prepayment is the last day of the Interest Period of such Borrowing. Optional
prepayments shall be accompanied by accrued interest thereon. Optional
prepayments with respect to the Construction Loans or the Term Loans may not be
reborrowed.
(c) Optional prepayments shall be applied to the remaining
installments of the Loans in direct order of maturity.
SECTION 2.9. Mandatory Prepayments. (a) The Company shall prepay the
Construction Loans with funds available in the Pre-Sale Proceeds Account in
accordance with the terms of Section 8.8.
(b) The Company shall prepay the Loans on each Principal
Payment Date in accordance with the terms of Section 8.12(b).
(c) The Company shall prepay the Loans immediately (except as
provided in Sections 2.9(a) and 2.9(b)) after the receipt of Net Cash Proceeds
as follows:
(i) by an amount equal to 50% of the Net Cash
Proceeds of any issuance on and after the Closing Date of Capital Stock
of the Company or a Sponsor; provided, however, so long as no Default,
Event of Default or Designated Event shall have occurred and be
continuing or may occur as a result of such issuance, (y) such Sponsor
shall be permitted to invest the Net Cash Proceeds of its own issuance
in other joint ventures or projects of such Sponsor or (z) such Sponsor
may apply the Net Cash Proceeds of its own issuance to the
collateralization, replacement, refinancing or repayment (in whole or
in part) of any financing provided to support the payment of such
Sponsor's Cash Equity Contribution commitment; provided, further, such
Net Cash Proceeds must be committed in accordance with either clause
(y) or (z) above within six months upon receipt and must be invested in
accordance with clause (y) or (z) above within twelve months. (For the
avoidance of doubt in no event shall less than 50% of Net Cash Proceeds
of an issuance of Capital Stock of the Company be used to prepay the
Loans);
(ii) by an amount equal to 100% of the Net Cash
Proceeds of any incurrence of Indebtedness on and after the Closing
Date by the Company or by any Subsidiary of the Company in accordance
with Section 6.1(h);
(iii) by an amount equal to 100% of the Net Cash
Proceeds of any sale, transfer or other disposition of any asset of the
Company or any Subsidiary thereof (other than sales, transfers or
dispositions of Capacity (excluding (i) sales resulting from the
exercise by FLAG Atlantic Holdings
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under the Shareholders Agreement of any option to acquire capacity in
the Project and (ii) notwithstanding anything to the contrary herein,
after the Conversion Date Net Cash Proceeds received from sales of
Capacity constituting the sale of fiber pairs of the Project
(including, without limitation, the Net Cash Proceeds from fiber pair
sales made before the Conversion Date)) described in clause (a) of
Section 6.4 and dispositions resulting in aggregate Net Cash Proceeds
not exceeding $1,000,000 during any fiscal year of the Company);
provided, however, that the Company shall not be required to make any
such prepayment if such Net Cash Proceeds are, within three months of
receipt, used to replace such assets disposed of with similar assets of
at least substantially the same value, utility and useful life.
(d) If an Event of Loss shall occur, unless the affected
portion of the Project is being repaired, replaced or restored in accordance
with Section 5.20, the Company shall, on the third Business Day following the
date on which insurance, condemnation or expropriation proceeds are received
with respect to such Event of Loss, prepay the Loans in an amount equal to the
insurance, condemnation and/or expropriation proceeds received (net of any costs
of collection (including attorneys fees)).
(e) The Company shall immediately prepay the Loans with the
Net Cash Proceeds received in respect of any Permitted Sale Leaseback.
(f) The proceeds of any Special Payments (net of any costs of
collection (including attorneys' fees)) shall be used to prepay the Loans in
accordance with Section 8.18; provided, however, that if and to the extent that
such payments are being utilized to repair, replace or restore any affected
portion of the Project in accordance with Section 5.20 (b), the Company shall
not be required to prepay the Loans with the proceeds of such Special Payments
being so utilized.
(g) The Company shall from time to time prepay Construction
Loans to the extent necessary so that the aggregate principal amount of
outstanding Construction Loans shall not at any time exceed an amount equal to
the aggregate amount of Construction Loan Commitments then in effect.
(h) The Company shall from time to time prepay Revolving
Credit Loans to the extent necessary so that the aggregate principal amount of
outstanding Revolving Credit Loans shall not at any time exceed the Revolving
Credit Commitments then in effect.
(i) Mandatory prepayments shall be accompanied by accrued
interest.
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(j) Mandatory prepayments of the Loans pursuant to paragraphs
(a), (b), (c), (d), (e) and (f) above shall be applied first, to the mandatory
prepayment of the Construction Loans or Term Loans, as the case may be, and
second, to the mandatory prepayment of the Revolving Credit Loans (and then,
unless the Revolving Credit Commitments shall have been terminated, to the cash
collateralization of the Revolving Credit Commitments on terms and subject to
documentation reasonably satisfactory to the Administrative Agent). Mandatory
prepayments of the Construction Loans or Term Loans, as the case may be, shall
be applied, 50% in direct order of maturity and 50% in inverse order of maturity
of all scheduled payments; provided, however, that no Event of Default shall
have occurred and be continuing and otherwise in inverse order of maturity of
such scheduled payments.
(k) Upon being required to make a mandatory prepayment
pursuant to this Section, the Company shall have the right first, to prepay the
ABR Loans and any and all Eurodollar Loans having Interest Period(s) ending on
the date such prepayment is required.
SECTION 2.10. Fees. (a) During the Construction Loan Commitment Period,
the Company agrees to pay to the Administrative Agent, for the account of the
Construction Loan Lenders, a commitment fee, calculated in accordance with part
II of Schedule 1.1(viii).
(b) During the Revolving Credit Availability Period, if
applicable, the Company agrees to pay to the Administrative Agent, for the
account of the Revolving Credit Lenders, a commitment fee calculated in
accordance with Part II of Schedule 1.1(viii).
(c) Accrued commitment fees shall be payable in arrears on the
last day of each of January, April, July and October (and, with respect to the
commitment fees payable in respect of any Commitment being terminated or
reduced, on the date of such termination or reduction) commencing on the Closing
Date (or, if any such day is not a Business Day, on the immediately preceding
Business Day). All commitment fees shall be computed on the basis of a year of
three hundred sixty (360) days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day). Upon payment
by the Company of the foregoing fees, the Administrative Agent shall promptly
distribute to each Construction Loan Lender or Revolving Credit Lender, as the
case may be, its Applicable Percentage thereof.
(d) The Company agrees to pay to the Administrative Agent, for
its own account, an annual administration fee in the amounts set forth in the
Fee Letter and payable on the Closing Date and each anniversary thereof prior to
the Final Maturity Date, and on the Final Maturity Date, all as set forth in the
Fee Letter.
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(e) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent, for distribution,
in the case of commitment fees, to the relevant Lenders.
SECTION 2.11. Interest. (a) The Loans comprising each ABR Borrowing
shall bear interest at a rate per annum equal to the Alternate Base Rate plus
the Applicable Margin.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at a rate per annum equal to the Adjusted LIBO Rate for the Interest
Period in effect for such Borrowing plus the Applicable Margin.
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Company hereunder
is not paid when due, whether at stated maturity, upon acceleration or
otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to (i) in the case of overdue principal of
or interest on any Loan, 2% plus the rate otherwise applicable to such Loan as
provided above or (ii) in the case of any other amount, 2% plus the highest rate
applicable to the Loans as provided above.
(d) Accrued interest on each Loan shall be payable in arrears
on each Interest Payment Date for such Loan; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan, accrued and unpaid
interest on the principal amount repaid or prepaid shall be payable on the date
of such repayment or prepayment, (iii) in the event of any conversion of any
Eurodollar Borrowing prior to the end of the current Interest Period therefor,
accrued interest on such Loan shall be payable on the effective date of such
conversion and (iv) all unpaid accrued interest shall be payable upon the Final
Maturity Date.
(e) All interest hereunder shall be computed on the basis of a
year of three hundred sixty (360) days, except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of three
hundred sixty five (365) days (or three hundred sixty six (366) days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest; Illegality. (a)
Notwithstanding any other provision hereof to the contrary, if prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
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(i) the Administrative Agent determines (which
determination shall be conclusive absent manifest error) that adequate
and reasonable means do not exist for ascertaining the Adjusted LIBO
Rate for such Interest Period; or
(ii) the Administrative Agent is advised by the
Majority Lenders that the Adjusted LIBO Rate for such Interest Period
will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Company and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Company and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any
Continuation/Conversion Notice that requests the conversion of any Borrowing to,
or continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and such Borrowing shall continue as, or be converted to, as applicable, an ABR
Borrowing and (ii) if any Borrowing Notice requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
(b) Notwithstanding any other provision hereof to the
contrary, if on or after the date hereof the adoption of or any change in any
applicable law or in the interpretation or application thereof shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by
this Agreement, such Lender shall give telex, telecopy or telephonic notice
thereof to the Administrative Agent and the Company as soon as practicable (and,
with respect to any such telephonic notice, the party delivering the same agrees
to confirm such notice in writing) and (i) the commitment of such Lender
hereunder to make Eurodollar Loans and continue Eurodollar Loans as such shall
forthwith be cancelled and (ii) such Lender's Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to ABR Loans on the
respective last days of the then current Interest Periods with respect to such
Loans or within such earlier period as required by law.
SECTION 2.13. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended or participated in by, any
Lender (except any such reserve requirement reflected in the Adjusted
LIBO Rate); or
(ii) impose on any Lender or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender;
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and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Company will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on the capital of such Lender or any holding company for such Lender, if any, as
a consequence hereof or the Loans made by such Lender, to a level below that
which such Lender or the holding company for such Lender would have achieved but
for such Change in Law (taking into consideration such Lender's or such Lender's
holding company's policies with respect to capital adequacy), then from time to
time the Company will pay to such Lender or such Lender's holding company, as
the case may be, such additional amount or amounts as will compensate such
Lender for any such reduction suffered.
(c) If any Lender becomes entitled to claim compensation
pursuant to this Section, such Lender shall promptly notify the Company (with a
copy to the Administrative Agent) of the event by reason of which it has become
so entitled. A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or such holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section shall be delivered to the
Company (with a copy to the Administrative Agent). The Company shall pay such
Lender the amount shown as due within ten (10) days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Company shall not
be required to compensate a Lender pursuant to this Section for any increased
costs or reductions incurred more than six months prior to the date that such
Lender notifies the Company of the Change in Law giving rise to such increased
costs or reductions and of such Lender's intention to claim compensation
therefor; provided, further, that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the six-month period referred
to above shall be extended to include the period of retroactive effect thereof.
SECTION 2.14. Break Funding Payments. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto, (b) the conversion of any Eurodollar Loan
other than on the last day of the Interest Period applicable thereto (including
in accordance with the provisions of Section 2.12(b) or 2.17(b)) or (c) the
failure to borrow, convert, continue or prepay any Eurodollar Loan on the date
specified in any definitive Borrowing Notice, Continuation/
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Conversion Notice or prepayment notice delivered pursuant hereto, then, in any
such event, the Company shall compensate each Lender for the loss, cost and
expense attributable to such event. In the case of a Eurodollar Loan, the loss
to any Lender attributable to any such event may include an amount determined by
such Lender to be equal to the excess, if any, of (i) the amount of interest
that such Lender would pay for a deposit equal to the principal amount of such
Loan for the period from the date of such payment, conversion or failure to the
last day of the then current Interest Period for such Loan (or, in the case of a
failure to borrow, convert or continue, the duration of the Interest Period that
would have resulted from such borrowing, conversion or continuation) if the
interest rate payable on such deposit were equal to the Adjusted LIBO Rate for
such Interest Period, over (ii) the amount of interest that such Lender would
earn on such principal amount for such period if such Lender were to invest such
principal amount for such period at the interest rate that would be bid by such
Lender (or an affiliate of such Lender) for dollar deposits from other banks in
the eurodollar market at the commencement of such period. A certificate of any
Lender setting forth the details of any amount or amounts that such Lender is
entitled to receive pursuant to this Section shall be delivered by such Lender
to the Company (with a copy to the Administrative Agent) and shall be conclusive
absent manifest error. The Company shall pay such Lender the amount shown as due
within ten (10) days after receipt thereof.
SECTION 2.15. Taxes. (a) Any and all payments by or on account of any
obligation of the Company hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; provided that if the Company
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section) the Administrative Agent or Lender (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Company shall make such deductions and (iii) the
Company shall pay the full amount deducted to the relevant Governmental
Authority in accordance with Applicable Law.
(b) In addition, the Company shall pay any Other Taxes to the
relevant Governmental Authority in accordance with Applicable Law.
(c) The Company shall indemnify the Administrative Agent and
each Lender, within ten (10) days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes (including Indemnified Taxes or
Other Taxes imposed or asserted on or attributable to amounts payable under this
Section) paid by the Administrative Agent or such Lender, as the case may be,
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or
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liability delivered to the Company by a Lender or by the Administrative Agent on
its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) As soon as reasonably practicable after any payment of
Indemnified Taxes or Other Taxes by the Company to a Governmental Authority, the
Company shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Lender that is legally entitled to an exemption from
or reduction of withholding tax which is an Indemnified Tax with respect to
payments under this Agreement shall deliver to the Company (with a copy to the
Administrative Agent), at the time or times reasonably requested by the Company,
such properly completed and executed documentation prescribed by Applicable Law
as will permit such payments to be made without withholding or subject to
withholding at a reduced rate, provided that such Lender is legally entitled to
complete, execute and deliver such documentation and in such Lender's reasonable
judgment such completion, execution or submission would not materially prejudice
the legal position of such Lender.
SECTION 2.16. Payments Generally; Etc. (a) The Company shall make each
payment required to be made by it hereunder (whether of principal, interest or
fees, or under Section 2.13, 2.14 or 2.15, or otherwise) prior to 1:00 p.m., New
York City time, on the date when due, in immediately available funds, without
set-off or counterclaim. Any amounts received after such time on any date may,
in the discretion of the Administrative Agent, be deemed to have been received
on the next succeeding Business Day for purposes of calculating interest
thereon. Subject to Article VIII, all such payments shall be made to the
Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇
except that payments pursuant to Sections 2.13, 2.14 and 2.15 and shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. Except as
otherwise set forth herein, if any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder shall be made in Dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied, subject to
the provisions of Article VIII, (i) first, to pay interest and fees then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of interest and fees then due to such parties, and (ii)
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second, to pay principal then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans of a particular Class
and accrued interest thereon than the proportion received by any other Lender of
such Class, then the Lender receiving such greater proportion shall purchase
(for cash at face value) a participation in the Loans of such Class of the other
Lenders to the extent necessary so that the benefit of all such payments shall
be shared by the Lenders ratably in accordance with the aggregate amount of
principal of and accrued interest on their respective Loans of such Class;
provided that (i) if any such participation is purchased and all or any portion
of the payment giving rise thereto is recovered, such participation shall be
rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Company pursuant to and in
accordance with the express terms hereof or any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans to any assignee or participant, other than to the Company, any Sponsor or
any Affiliate thereof (as to which the provisions of this paragraph shall
apply). The Company consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Company rights of set-off and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Company in the amount of
such participation.
(d) Unless the Administrative Agent shall have received notice
from the Company prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Company
will not make such payment, the Administrative Agent may assume that the Company
has made such payment on such date in accordance herewith and may, in reliance
upon such assumption, distribute to the Lenders the amount due. In such event,
if the Company has not in fact made such payment, then each of the Lenders
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender with interest thereon, for each day from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to
be made by it pursuant to Section 2.4(b) or 2.16(d), then the Administrative
Agent may, in its discretion apply any amounts thereafter received by the
Administrative Agent for the account of such Lender to satisfy such Lender's
obligations under such Sections until all such unsatisfied obligations are fully
paid.
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SECTION 2.17. Mitigation Obligations; Replacement of Lenders. (a) If
any Lender notifies the Company of its intent to apply Section 2.12(b) and/or
requests compensation under Section 2.13, or if the Company is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.15, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would avoid the application of
Section 2.12(b), eliminate or reduce amounts payable pursuant to Section 2.13 or
2.15, as the case may be, and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Company hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
(b) If any Lender notifies the Company of its intent to apply
Section 2.12(b) and such application is not being made by the Lenders generally
and/or requests compensation under Section 2.13 which is not being requested by
the Lenders generally, or if the Company is required to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 2.15, or if any Lender defaults in its obligation to fund
Loans hereunder, so long as no Default shall have occurred and is continuing, at
its sole expense and effort, upon notice to such Lender and the Administrative
Agent, then (i) the Company may require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 10.4), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); provided that (A) the Company
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld or delayed, (B) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts payable to
it hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Company (in the case of all other amounts) and
(C) in the case of any such assignment resulting from a claim for compensation
under Section 2.13 or payments required to be made pursuant to Section 2.15,
such assignment will result in a reduction in such compensation or payments or
in the case of any such assignment resulting from the application of Section
2.12(b), such assignment will be to an assignee not then subject to such Section
or (ii) if the Company, after using best efforts (to the satisfaction of the
Administrative Agent), cannot procure for such Lender an assignee and delegatee
in satisfaction of clause (i) above, the Company may prepay such Lender's Loans
in full out of funds made available to the Company for its sole benefit after
the application of clauses "first" through "ninth" of Section 8.12(b) or out of
funds available in the Company's Excess Cash Flow Account, whereupon such
Lender's Commitment shall also terminate. A Lender shall not be required to make
any such assignment and
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delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Company to require such assignment
and delegation cease to apply.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Administrative Agent and the
Lenders that:
SECTION 3.1. Financial Condition. Except for material Contractual
Obligations disclosed on Schedule 3.19(b), the Company, as of the Closing Date,
shall have no other material liabilities.
SECTION 3.2. No Material Adverse Effect. Since March 31, 1999, there
has been no event, occurrence, development of facts or change which has had or
could reasonably be expected to have a Material Adverse Effect.
SECTION 3.3. Organization; Existence; Business. (a) Each of the Company
and its Subsidiaries is a company duly organized and validly existing under the
laws of the jurisdiction of its organization (and, to the extent applicable in
such jurisdiction, is in good standing under the laws of such jurisdiction) and
is duly qualified to do business in such jurisdiction and in each other
jurisdiction in which the conduct of its business or the ownership or lease of
its assets requires such qualification, except in the case of any such other
jurisdiction, where the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect.
(b) No filing, recording, publishing or other act is necessary
or appropriate in connection with the establishment of the Company or any of its
Subsidiaries except those which have been duly made or performed and except
where the failure to so file, record, publish or act could not reasonably be
expected to have a Material Adverse Effect.
(c) Prior to the Closing Date, the Company has engaged in no
business other than the development, construction, installation, maintenance and
operation of the Project, the marketing and disposition of Capacity and
activities incidental thereto, and the Company has no material obligations or
liabilities (contingent or otherwise) other than those directly related to the
conduct of such business and relating to agreements that are disclosed on
Schedule 3.19(b).
SECTION 3.4. Compliance with Law. Each of the Company and its
Subsidiaries is in compliance with all Applicable Laws, including, without
limitation, all Environmental Laws, and all Governmental Actions except to the
extent of any
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non-compliance which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
SECTION 3.5. Power and Authorization; Enforceable Obligations. (a) Each
of the Company and its Subsidiaries has full corporate power and authority to
engage in all Project Activities, to conduct its business as now conducted, to
execute, deliver and perform each of this Agreement and the other Transaction
Documents to which it is a party and each other document to be executed in
connection herewith, to take all action as may be necessary to complete the
transactions contemplated hereunder, including to borrow the Loans and to grant
the Liens provided for in the Security Documents to which it is a party.
(b) Each of the Company and its Subsidiaries has taken all
necessary corporate and legal action to authorize the borrowings by the Company
hereunder on the terms and conditions set forth herein, to grant the Liens
provided for in the Security Documents to which it is a party and to authorize
the execution, delivery and performance hereof and of the other Transaction
Documents to which it is a party and each other document to be executed in
connection herewith.
(c) Each of this Agreement and the other Financing Documents
to which the Company is a party has been duly executed and delivered by the
Company and constitutes, and each of the other Financing Documents to which the
Company or any of its Subsidiaries is to become a party will, upon execution and
delivery thereof by the Company or such Subsidiary, as the case may be, and the
other parties thereto (if any), constitute, a legal, valid and binding
obligation of the Company or such Subsidiary enforceable against the Company or
such Subsidiary, as applicable, in accordance with its terms, except as
enforceability may be limited by Applicable Laws, general principles of equity
(whether considered in a proceeding in equity or law) and an implied covenant of
good faith and fair dealing.
(d) Each of the Project Documents to which the Company is a
party has been duly executed and delivered by the Company and the Company has no
reason to believe that each of the Project Documents has not been duly executed
and delivered by the other parties thereto. Each of the Project Documents
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms and the Company has no reason
to believe that each of the Project Documents does not constitute legal, valid
and binding obligations of such other parties enforceable against such other
parties in accordance with its terms, in each case except as enforceability may
be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the rights of creditors
generally, general principles of equity (whether considered in a proceeding in
equity or law) and an implied covenant of good faith and fair dealing.
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SECTION 3.6. Capital and Corporate Structure. Immediately prior to
giving effect to the transactions contemplated hereby, the capital structure of
the Company is as set forth in Schedule 3.6. Except as set forth in Schedule
3.6, as of the Closing Date, the Company does not have any Subsidiaries and does
not hold beneficially or otherwise any ownership interest in any other Person.
SECTION 3.7. Governmental Actions, Permits, Etc. (a) No Governmental
Actions, Rights-of-Way or other consents or approvals are required by the
Company, its Subsidiaries or, to the best knowledge of the Company, the
Contractor under Applicable Law, in connection with (i) the participation by the
Company and its Subsidiaries in the transactions contemplated by this Agreement
and the other Transaction Documents, (ii) the ownership and operation of the
Project by the Company and its Subsidiaries, the performance by the Company and
its Subsidiaries of any Project Activity or the use by the Company and its
Subsidiaries of the Project (including, without limitation, the sale, lease or
other disposition of Capacity) in accordance with the applicable provisions of
the Transaction Documents and in compliance with all Applicable Laws, (iii) the
validity and enforceability of the Transaction Documents against the Company and
its Subsidiaries and (iv) the execution, delivery and performance of the
Financing Documents by the Company and its Subsidiaries, the borrowings by the
Company hereunder and the grant by the Company and its Subsidiaries of the Liens
created pursuant to the Security Documents to which the Company or any of its
Subsidiaries is a party and the validity and enforceability thereof and the
perfection of and the exercise by the Administrative Agent of its rights and
remedies thereunder, except in each case for those Governmental Actions,
Rights-of-Way and consents or approvals (x) which have been duly obtained or
made, are in full force and effect and are final (y) those which are not
required to have been obtained or made by the date on which this representation
and warranty is made or deemed made or (z) where the failure to so obtain such
Governmental Actions, Rights-of-Way and consents or approvals could not
reasonably be expected to have a Material Adverse Effect.
(b) To the best of the Company's knowledge as of the Closing
Date, Schedule 3.7(b) sets forth all the material Governmental Actions and
material Rights-of-Way that are required to be obtained pursuant to any Project
Document or Applicable Law in connection with the performance by the Company and
its Subsidiaries of the construction and operation of the Project (including,
without limitation, the sale, lease or other disposition of Capacity).
SECTION 3.8. No Legal Bar. (a) The execution, delivery and performance
by the Company and its Subsidiaries hereof and the other Financing Documents to
which it is a party, the borrowings by the Company hereunder and the use of the
proceeds thereof, the granting of the Liens by the Company and its Subsidiaries
under the Security Documents and the consummation of the transactions
contemplated hereby and thereby, (i) will not violate or result in a breach of
any Applicable Law, (ii) will not
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violate or result in a default under any Contractual Obligation of the Company
or any Subsidiary thereof (which violation or default could reasonably be
expected to have a Material Adverse Effect) and (iii) will not result in, or
require, the creation or imposition of any Lien on any of the properties or
revenues of the Company, its Subsidiaries or the Project, except for Permitted
Liens.
(b) The execution, delivery and performance by the Company and
each Subsidiary thereof of the Project Documents to which it is a party (i) will
not violate or result in a breach of any Applicable Law or a default under any
material Contractual Obligation of the Company or such Subsidiary, except for
any violation, breach or default that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect and (ii) will not
result in, or require, the creation or imposition of any Lien on any of the
properties or revenues of the Company, its Subsidiaries or the Project, except
for Permitted Liens.
SECTION 3.9. No Proceeding or Litigation. No litigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the best
of the Company's knowledge, threatened against or affecting the Company or any
of its Subsidiaries or against or affecting any of the properties, rights,
revenues or assets of the Company or any of its Subsidiaries, or the Project or
this Agreement or any other Transaction Document or the transactions
contemplated hereby or thereby, except for such litigation or proceedings
described in Schedule 3.9 and except in the case of any litigation or proceeding
occurring or arising after the Closing Date (and as to which the Company and its
Subsidiaries had no knowledge prior to the Closing Date) which, if adversely
determined, could not be reasonably expected to have a Material Adverse Effect.
SECTION 3.10. No Default, Event of Default or Event of Loss. (a) No
Default or Event of Default has occurred and is continuing. No Event of Loss has
occurred and is continuing as of the Closing Date (and, as of any date after the
Closing Date on which representations and warranties are made or deemed made
under this Agreement, no Event of Loss has occurred and is continuing or, if an
Event of Loss has occurred and is continuing as of such date, an EOL Compliance
Certificate has been delivered by the Company to the Administrative Agent
pursuant to Section 5.20(a)).
(b) Neither the Company nor any of its Subsidiaries is and, to
the best of the Company's knowledge, no other party is, (i) in material default
under or with respect to any Principal Project Document (other than any Capacity
Sales Agreement so long as such default could not reasonably be expected to have
a Material Adverse Effect) or (ii) in default under or with respect to any other
Project Document except for any defaults under such other Project Documents
which could not reasonably be expected to have a Material Adverse Effect, and no
notice of default has been given to or by the Company or any of its Subsidiaries
under any Project Document with respect to any matter which could reasonably be
expected to have a Material Adverse Effect.
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SECTION 3.11. Ownership of Property; Liens; Common Stock. (a) As of the
Closing Date (and on each date on which representations and warranties are made
or deemed made under this Agreement), the Company and its Subsidiaries have good
and valid title to (or, if applicable, valid leasehold interests or rights of
use in) the Collateral (owned as of such date), to all of their respective
assets comprising a part of the Project and to all of their respective other
assets free and clear of all Liens except Permitted Liens. The Rights-of-Way
granted to the Company are free and clear of all Liens other than Permitted
Liens. As of the Closing Date, Schedule 3.11(a) contains a true, accurate and
complete list of (i) all Real Estate Assets, and (ii) all leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting each Real Estate Asset of the
Company or any Subsidiary thereof, regardless of whether the Company or such
Subsidiary is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. As of the
Closing Date except as specified in Schedule 3.11(a), each agreement listed in
clause (ii) of the immediately preceding sentence is in full force and effect
and the Company does not have knowledge of any default that has occurred and is
continuing thereunder that could reasonably be expected to have a Material
Adverse Effect, and each such agreement constitutes the legal, valid and binding
obligation of the Company or such Subsidiary, as applicable, enforceable against
such party in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or similar laws affecting the rights of creditors generally, general
equitable principles (whether considered in a proceeding in equity or law) and
an implied covenant of good faith and fair dealing.
(b) All filings, recordings and other actions, including,
without limitation, the recordings, filings and other actions shown on Schedule
3.11(b), that are necessary or, in the judgment of the Administrative Agent as
applicable, desirable in order to establish, protect and perfect the
Administrative Agent's as applicable, lien on and perfected security interest
in, and the First Priority (as defined in Schedule 5.26) status thereof, all
right, title, estate and interest of the Company and its Subsidiaries, or the
Sponsors, as the case may be, in and to the Collateral, have been duly made or
taken and all fees, taxes and other charges relating to such filings and
recordings and other actions have been paid in full. The provisions of the
Security Documents (together with such recordings, filings and actions) are
effective to create, in favor of the Administrative Agent as applicable, for the
benefit of the Secured Parties, a legal, valid and enforceable lien on and
security interest in all of the Collateral and, from and after the Closing Date,
the Administrative Agent as applicable, has a legal, valid and enforceable first
lien on and prior perfected security interest in all of the Subject Collateral
(subject to exceptions as may be provided under Applicable Law and in such
schedule).
(c) All of the Pledged Stock has been duly authorized and
validly issued and is fully paid and non-assessable. There are no outstanding
obligations of the
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Company to repurchase, redeem or otherwise acquire any Capital Stock (or any
security convertible into or exchangeable for the same) of the Company from
either Sponsor.
SECTION 3.12. Taxes. (a) Neither the Company, any of its Subsidiaries
(except for any of its Subsidiaries incorporated in France), the Project nor any
of their respective assets or revenues (including any Capacity Commitments and
Operating Payments) is subject to any Tax in any jurisdiction, except for Taxes
(other than value-added taxes relating to the sale of Capacity) in an aggregate
amount, for the Company or such Subsidiary, for any Operating Year not exceeding
105% of the amount allocated for Taxes in respect of such Operating Year.
(b) All clearance rulings, decrees or similar items necessary
to establish the exemption from the imposition of any Tax or similar charge
(other than Taxes or other charges in an aggregate amount not to exceed the
amount referred to in paragraph (a) of this Section) upon which the Company or
any of its Subsidiaries is relying under the laws of Bermuda or any other
jurisdiction on its income, assets, operations or revenues have been obtained,
are in full force and effect and are Final.
(c) Each of the Company and its Subsidiaries has timely filed
or caused to be filed all tax returns which are required to be filed by it, and
has paid or caused to be paid all Taxes shown to be due and payable on such
returns or on any assessments made against it or any of its property and has
paid or caused to be paid all other Taxes, fees or other charges imposed on it
or any of its property by any Governmental Authority, except for Taxes subject
to a Contest.
SECTION 3.13. Federal Regulations. Neither the Company nor any of its
Subsidiaries is engaged nor will it engage in the business of extending credit
for the purpose of "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulations T, U and X of
the Board as now and from time to time hereafter in effect. No part of the
proceeds of the Loans will be used for "purchasing" or "carrying" any "margin
stock" as so defined or for any purpose which violates, or which would be
inconsistent with, the provisions of the Regulations of the Board.
SECTION 3.14. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
have a Material Adverse Effect, and no contribution failure has occurred with
respect to any Plan sufficient to give rise to a Lien under Section 302(f) of
ERISA.
SECTION 3.15. Investment Company Act. Neither the Company nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
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SECTION 3.16. Full Disclosure. All factual information (taken as a
whole) furnished in writing to the Administrative Agent or any Lender directly
or indirectly by the Company or any of its Subsidiaries was (or is) true and
accurate in all material respects on the date as of which such information was
(or is) dated or certified and not incomplete by omitting to state a material
fact necessary in order to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was (or is) provided. All such factual information
(taken as a whole) shall include any information by way of projections,
estimates or other expressions of view as to future circumstances so long as
such projections, estimates or expressions were made in good faith, based on
reasonable assumptions, and fairly represent the Company's expectation as to the
matter covered thereby as of their date.
SECTION 3.17. Principal Place of Business, Etc. As of the Closing Date,
the principal place of business and chief executive office of the Company is
located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇ and such principal place of
business shall not be changed without the prior written consent of the
Administrative Agent.
SECTION 3.18. Intellectual Property. (a) Each of the Company and its
Subsidiaries (x) owns, or has valid licenses to use, all Intellectual Property
necessary for the conduct of its business as currently conducted and (y) as and
when required, will own, or will have valid licenses to use, all further
Intellectual Property that will be necessary for the conduct of its business as
proposed to be conducted in the future, in each case that are material to the
condition (financial or other), business, or operations of the Company, its
Subsidiaries or the Project.
(b) No claim has been asserted and is pending by any Person
with respect to the use of any such Intellectual Property in connection with the
Project or the conduct of the business of the Company or any of its
Subsidiaries, or, to the Company's best knowledge, challenging or questioning
the validity or enforceability of any such Intellectual Property (except for any
claim or claims arising after the Closing Date which individually or in the
aggregate could not, if determined adversely to the Company or such Subsidiary,
as applicable, reasonably be expected to have a Material Adverse Effect) and
neither the Company nor any of its Subsidiaries knows of any valid basis for any
such claim.
(c) As of the Closing Date, and to the Company's best
knowledge, as of any date after the Closing Date on which representations and
warranties are made or deemed made under this Agreement, the use or contemplated
use of any such Intellectual Property by the Company and any of its Subsidiaries
does not infringe the rights of any Person except for any infringement which
individually, or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
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SECTION 3.19. Sufficiency of Project Documents. (a) Other than such
services, materials, property interests, license agreements and other rights
that the Company reasonably believes are readily obtainable on commercially
reasonable terms, the services to be performed, the materials to be supplied and
the property interests, license agreement(s), and other rights granted pursuant
to the Project Documents and other Contractual Obligations to which the Company
is a party comprise all of the services, materials and property interests
required to perform the Project Activities in accordance with all Applicable
Laws and the Transaction Documents.
(b) The Company is not, as of the Closing Date, party to or
otherwise obligated in any way under any material Contractual Obligation other
than those listed on Schedule 3.19(b) and such Contractual Obligations have not
been amended or otherwise modified (by letter agreement or otherwise) as of the
Closing Date, except as set forth on Schedule 3.19(b). Schedule 3.19(b) sets
forth each Contractual Obligation of the Company and its Subsidiaries or, to the
best of the Company's knowledge, any other Person (in either case, as of the
Closing Date) which could have a Material Adverse Effect on the validity,
perfection, priority, or enforceability of the Collateral owned as of the
Closing Date or on the availability of the remedies of the Administrative Agent
or the Lenders under the Financing Documents.
SECTION 3.20. Environmental Matters. No condition or violation of
Environmental Laws exists with respect to the Project, the Company, its
Subsidiaries, any property owned or operated by the Company or its Subsidiaries
or otherwise that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
SECTION 3.21. Commercial Insurance. All commercial insurance policies
required to be maintained pursuant to Section 5.10 are in full force and effect
and all premiums with respect thereto have been paid in full.
SECTION 3.22. Immunity. Neither the Company nor any of its Subsidiaries
is entitled to claim for itself, any of its assets or the Project (or any
portion thereof) immunity from suit, execution, attachment or other legal
process in any proceedings in any jurisdiction in connection with any of the
Financing Documents to which the Company or any of its Subsidiaries is a party.
SECTION 3.23. Foreign Corrupt Practices Act. Neither the Company nor
any of its Subsidiaries nor any of their respective officers, directors,
employees, or authorized agents or any of their affiliates which are Controlled
by the Company, acting on its behalf, has taken any action in connection with
the Project that violates the Foreign Corrupt Practices Act of the United
States, if applicable, or any similar law of any other jurisdiction, if
applicable.
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SECTION 3.24. Fees and Enforcement. Other than amounts that have been
paid (or will, as and when required, have been paid) in full, no fees or Taxes,
including without limitation stamp, transaction, registration or similar taxes,
are required to be paid for the legality, validity, or enforceability hereof or
of any of the other Transaction Documents.
SECTION 3.25. Enforcement; Performance. It is not necessary solely (a)
in order to execute or enforce any rights in Bermuda under this Agreement or
under any other Financing Document to which the Company is a party or (b) by
reason of the entry into or performance hereof or of any other Financing
Document to which the Company is a party, that the Administrative Agent or any
Lender be licensed, qualified or entitled to do business in Bermuda.
SECTION 3.26. Disputes. As of the Closing Date, (a) there are no
material disputes between the Company and the Contractor with respect to amounts
owing under the Construction Contract, and (b) there are no disputes between the
Company and the Contractor with respect to the performance of any obligations
under the Construction Contract or otherwise, except those that have been
disclosed to the Independent Engineer.
SECTION 3.27. Indebtedness. Except pursuant to the Financing Documents,
the Company has not incurred any Indebtedness other than Indebtedness permitted
pursuant to Section 6.1.
SECTION 3.28. Other Acts. All acts, conditions and things required to
be done, fulfilled and performed by the Company as of the Closing Date and as of
each date this representation and warranty is made or deemed made in order to
(a) enable the Company to lawfully enter into or exercise its rights and perform
its obligations under the Financing Documents and Project Documents, (b) ensure
that the Company's obligations under the Financing Documents and the Project
Documents are legal, valid and binding and (c) make the Financing Documents and
the Project Documents enforceable, have been done, fulfilled and performed.
SECTION 3.29. Project Costs. The Project Costs (and other costs) set
forth in the Project Budget reflect the Company's best estimates of all Project
Costs and other costs necessary for the design, development, engineering,
acquisition, installation, landing, construction, completion, start-up, testing,
ownership, possession and financing of the Project.
SECTION 3.30. Submission to Jurisdiction. The Company has validly
submitted to the jurisdiction of the Courts of the State of New York and the
Federal Courts for the Southern District of New York.
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SECTION 3.31. Year 2000. The Company has reviewed, or will
expeditiously review, its operations and those of its Subsidiaries with a view
to assessing whether its businesses, or the businesses of any of its
Subsidiaries, will be vulnerable to a Year 2000 problem or will be vulnerable to
the effects of a Year 2000 Problem suffered by any of the Company's or any of
its Subsidiaries' major commercial counter-parties. The Company shall take all
actions necessary and commit adequate resources to assure that its
computer-based and other systems (and those of all Subsidiaries) are able to
effectively process data, including dates before, on and after January 1, 2000,
without experiencing any Year 2000 Problem that could cause a Material Adverse
Effect. At the request of the Administrative Agent, the Company will provide the
Administrative Agent with assurances and substantiations (including, but not
limited to, the results of internal or external audit reports prepared in the
ordinary course of business) reasonably acceptable to the Administrative Agent
as to the capability of the Company and its Subsidiaries to conduct its and
their businesses and operations before, on and after January 1, 2000 without
experiencing a Year 2000 Problem causing a Material Adverse Effect. The Company
represents and warrants that it has a reasonable basis to believe that no Year
2000 Problem will cause a Material Adverse Effect.
SECTION 3.32. Representations and Warranties. All representations and
warranties of the Company and its Subsidiaries and, to the Company's knowledge
(after due inquiry), the Sponsors, contained in the Project Documents are true
and correct in all material respects. All representations and warranties of the
Company and its Subsidiaries and to the Company's knowledge (after due inquiry),
the Sponsors, contained in the Security Documents are true and correct in all
material respects.
ARTICLE IV
CONDITIONS
SECTION 4.1. Closing Date. The occurrence of the Closing Date, and the
obligation of each Lender to make available Loans on the Closing Date or, if no
Loans are made thereon, after the Closing Date, shall, in each case, be subject
to the fulfillment of, or waiver in its sole discretion by, each Lender, of each
of the following conditions precedent, together with the other applicable
conditions set forth in Sections 4.2 and 4.3:
(a) Notes. The Company shall have duly issued, executed and
delivered, upon written request, to (i) each Construction Loan Lender, a
Construction Loan Note, dated the Closing Date, with appropriate insertions and
in a principal amount equal to such Lender's Construction Loan Commitment and
(ii) each Revolving Credit Lender, a Revolving Credit Note, dated the Closing
Date, with appropriate insertions and in a principal amount equal to such
Lender's Revolving Credit Commitment.
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(b) Letters of Credit; Performance Bond. The Administrative
Agent shall have received each Equity Contribution Letter of Credit and the
Performance Bond, together with such amendments thereto as the Administrative
Agent shall have requested.
(c) Financing Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, each of the following documents,
each duly executed and delivered by each of the parties thereto:
(i) this Agreement;
(ii) each Equity Contribution Agreement;
(iii) each Security Agreement, together with (A) the
stock certificates representing all of the Capital Stock of the
Subsidiaries of the Company, except for FLAG France S.A.R.L., (B)
undated stock powers for each stock certificate representing such
Capital Stock, executed in blank and delivered by a duly authorized
officer of the Company and (C) undated transfer certificates for each
stock certificate representing such Capital Stock, executed in blank
and delivered by a duly authorized officer of the Company;
(iv) the Shareholder Pledge Agreement, together with
(A) the stock certificates representing all of the Capital Stock of the
Company owned by the applicable Sponsor, (B) undated stock powers for
each stock certificate representing such Capital Stock, executed in
blank and delivered by a duly authorized officer of such Sponsor and
(C) undated transfer certificates for each stock certificate
representing such Capital Stock, executed in blank and delivered by a
duly authorized officer of such Sponsor;
(v) the Subsidiary Guarantee Agreements;
(vi) the Limited Guarantee Agreements;
(vii) the Notes; and
(viii) the Consents.
(f) Project Documents. The Administrative Agent shall have
received, with a counterpart for each Lender, a true and complete copy of each
of the following documents, duly certified by a Responsible Officer of the
Company as such on the Closing Date, and each in form and substance reasonably
satisfactory to the Administrative Agent:
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(i) the Construction Contract, together with each
amendment and contract variation thereto;
(ii) the Backhaul Agreements which have been executed
prior to the Closing Date;
(iii) the Construction Management Agreements,
together with any amendment thereto;
(iv) each Capacity Sales Agreement executed by the
Company as of the Closing Date, together with each original Pre-Sales
Capacity Agreement Letter of Credit, if applicable;
(v) the Facilities Management Agreement;
(vi) the Marketing Agreement; and
(vii) the Shareholders Agreement.
(e) Legal Opinions. The Administrative Agent shall have
received, with a counterpart for each Lender, the following opinions of counsel,
dated the Closing Date, each in form and substance satisfactory to the
Administrative Agent and addressed to each of the Secured Parties:
(i) the legal opinions of Bermuda counsel to the
Company and the Sponsors, substantially in the forms of Exhibit O-1;
(ii) the legal opinion of New York counsel to the
Company and the Sponsors, substantially in the form of Exhibit O-2;
(iii) the legal opinion of French counsel to Alcatel
and the Contractor, substantially in the form of Exhibit O-3;
(iv) the legal opinion of New York counsel to the
Administrative Agent and the Lenders, substantially in the form of
Exhibit O-4;
(v) the legal opinion of English counsel to the
Lenders, the Administrative Agent substantially in the form of Exhibit
O-5; and
(vi) the legal opinion of French counsel to the
Lenders and the Administrative Agent, substantially in the form of
Exhibit O-6.
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(f) Independent Engineer's Report. The Administrative Agent
shall have received, with a copy for each Lender, a report of the Independent
Engineer, in form and substance satisfactory to the Administrative Agent.
(g) Market Consultant's Report. The Administrative Agent shall
have received, with a copy for each Lender, a report of the Market Consultant
(setting forth, without limitation, projection of revenues of the Project), in
form and substance satisfactory to the Administrative Agent.
(h) Insurance Advisor's Report. The Administrative Agent shall
have received, with a copy for each Lender (i) a report of the Insurance
Advisor, dated as of the Closing Date, in form and substance satisfactory to the
Administrative Agent and (ii) a certificate of the Insurance Advisor, setting
forth the types and amounts of insurance obtained by the Contractor and the
risks covered thereby.
(i) Project Timetable; Plan of Work. The Administrative Agent
shall have received from the Company, with a copy for each Lender, (i) a true
and complete copy of the Project Timetable, in form and substance satisfactory
to the Administrative Agent (after consultation with the Independent Engineer),
and (ii) a true and complete copy of the Plan of Work, each duly certified by a
Responsible Officer of the Company as such as of the Closing Date.
(j) Project Budget. The Administrative Agent shall have
received from the Company, with a copy for each Lender, the Project Budget, in
form and substance satisfactory to each Lender, which sets forth all anticipated
costs to be incurred in connection with the construction and start-up of the
Project, including, without limitation, all construction and non-construction
costs, and all interest, taxes and other carrying costs, and such other
information as the Administrative Agent may reasonably request. The Project
Budget will contain an appropriate number of Budget Categories and will detail
(i) the Budget Category Amount for each Budget Category, and (ii) the
expenditures to date in each Budget Category, and such other information as the
Administrative Agent may reasonably require, together with a balanced statement
of uses and sources of proceeds, broken down as to separate construction phases
and components.
(k) Sufficiency of Funding. The Administrative Agent shall be
satisfied that the Cash Equity Contributions, together with amounts available
under the other Construction Funding Facilities, shall be sufficient to pay all
Project Costs set forth in the Project Budget.
(l) Sponsor Pre-Sale Capacity Commitments. The Capacity Sales
Agreements relating to the Sponsor Pre-Sale Capacity Commitments shall be in
effect, and the Administrative Agent shall have received a copy of each such
Capacity Sales Agreement and each Pre-Sale Capacity Agreement Letter of Credit
relating thereto
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(including, without limitation, the Pre-Sale Agreement Letter of Credit relating
to the GTS Sponsor Pre-Sale Capacity Commitment).
(m) Due Authorization. Execution and Delivery. Each of the
Transaction Documents contemplated to be executed on or prior to the Closing
Date shall have been duly authorized, executed and delivered by the respective
parties thereto and shall be in full force and effect on the Closing Date (and
all conditions precedent to the effectiveness thereof set forth therein shall
have been duly satisfied) without any event or condition having occurred or
existing that constitutes or, with the giving of notice or lapse of time or
both, would constitute a default thereunder or a breach thereof or would give
any party thereto the right to terminate any thereof, and the Administrative
Agent shall have received evidence as to such authorization, execution and
delivery.
(n) Recordation and Filing. Each of the documents and
instruments identified on Schedule 3.11(b) shall have been recorded or filed in
the respective places or offices set forth in Schedule 3.11(b), and all
recording and filing fees with respect thereto shall have been paid.
(o) Taxes. All Taxes, if any, payable or indemnifiable by the
Company on or prior to the Closing Date in connection with the execution,
delivery, performance, recording and filing of the Transaction Documents and the
documents and instruments described in Schedule 3.11(b), or in connection with
the consummation of the transactions contemplated hereby or by the other
Financing Documents, shall have been paid in full. The Administrative Agent
shall be satisfied (based on discussions with the Independent Engineer) that
adequate provision has been made in the Project Budget and the Operating Budget
for the payment of all Taxes payable or indemnifiable by the Company arising out
of the importation, ownership, use or operation of the Project or any portion
thereof within the jurisdictional limits of each Subsidiary.
(p) Representations and Warranties. All representations and
warranties made by the Company, each Sponsor and the Contractor (i) in this
Agreement, in any other Financing Document and in the Construction Contract
shall be true and correct in all respects on and as of the Closing Date as if
made on and as of the Closing Date and (ii) in any other Project Document shall
be true and correct in all material respects on and as of the Closing Date as if
made on and as of the Closing Date.
(q) Litigation. No action, proceeding or investigation shall
have been instituted or threatened by or before any Governmental Authority, nor
shall any order judgment or decree have been issued or proposed to be issued by
any Governmental Authority, to set aside, restrain, enjoin, limit, restrict or
prevent the consummation of any of the transactions contemplated hereby or by
the other Transaction Documents.
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(r) Organizational Documents; Resolutions; Incumbency. The
Administrative Agent shall have received from each following Person, with a
counterpart for each Lender, certified copies of such Person's Organizational
Documents and a Certificate of Resolutions and Incumbency:
(i) the Company;
(ii) each Sponsor;
(iii) the Contractor; and
(iv) Alcatel.
(s) Officers' Certificates. The Administrative Agent shall
have received, with a counterpart for each Lender, an Officers' Certificate with
respect to the Company and each Subsidiary, each Sponsor, the Contractor and
Alcatel.
(t) Projections. The Administrative Agent shall have received
from the Company with a copy for each Lender, operating projections and analysis
for the Project certified by a Responsible Officer of the Company as being
prepared in good faith in full consideration of all information known to such
officer, after due inquiry, as of the Closing Date, a copy of which is annexed
as Exhibit I or shall be satisfactory in form and substance to the
Administrative Agent (the "OPERATING PROJECTIONS"), and sets forth projections
of revenues, operating and other expenses and cash flows of the Project and the
Cumulative Capacity Sales Revenue, Interest Coverage Ratio and the Present Value
Coverage Ratio for each Operating Year prior to the Final Maturity Date, in form
and substance reasonably satisfactory to the Administrative Agent, of the
projected Operating Expenses associated with the Project with respect to each
Operating Year prior to the Final Maturity Date, together with the Operating
Payments to be received by the Company from the Capacity Purchasers in respect
of operation and maintenance payments in such detail and based upon such
assumptions as shall be satisfactory to the Administrative Agent (after
consultation with the Independent Engineer).
(u) No Violation of Applicable Law. The consummation of the
transactions contemplated hereby and by the other Transaction Documents shall
not violate any Applicable Law.
(v) Financial Statements. The Administrative Agent shall have
received, with a copy for each Lender:
(i) the audited balance sheet of FLAG Telecom
Holdings Limited as of June 30, 1999;
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(ii) the most recent annual audited balance sheet and
related financial statements of Global Telesystems Group, Inc.; and
(iii) the most recent annual audited balance sheet
and related financial statements of the Contractor and Alcatel.
In addition, there shall have been no material adverse change in the financial
condition of each such Person since the date of such financial statements.
(w) Agent for Service of Process. The Administrative Agent
shall have received evidence that (i) the Company has irrevocably appointed an
agent for service of process in accordance with Sections 5.18 and 10.9, and (ii)
each Sponsor has irrevocably appointed an agent for service of process in
accordance with the terms of the Equity Contribution Agreement to which it is a
party, and that each such agent has accepted the appointment and has agreed to
forward forthwith to the Company or such other Person, as the case may be, all
legal process addressed to such party received by such agent.
(x) Fees. The Lead Arranger and the Administrative Agent shall
have each received the fees payable thereto on the Closing Date pursuant to the
Fee Letter.
(y) Available Funds. The Administrative Agent shall have
received evidence reasonably satisfactory to it that the Company has transferred
all available funds of the Company as of the Closing Date to the Construction
Account.
(z) Other Matters. The Administrative Agent and the Lenders
shall have each received such information, opinions, documents, evidence and
copies of such other documents as any of them or their respective counsel may
reasonably request (with a counterpart to each other Lender), which information,
opinions and documents shall be reasonably satisfactory in form and substance to
such requesting party.
SECTION 4.2. Construction Loans. The obligation of each Lender to make
available Construction Loans on any Borrowing Date, including the Closing Date,
shall be subject to the fulfillment of, or waiver in the discretion of the
Majority Lenders, of each of the following conditions precedent, together with
the conditions as set forth in Section 4.3:
(a) Governmental Actions: Rights-of-Way, Permits. All
Governmental Actions and Rights-of-Way set forth in Schedule 3.7(b) and any
additional Governmental Actions and Rights-of-Way which are required in
accordance with such Schedule or pursuant to Applicable Law to be obtained on or
prior to the date of such Construction Loan, shall have been duly obtained or
made, shall be in full force
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and effect and shall be Final. The Administrative Agent shall have received (i)
copies of such Governmental Actions and Rights-of-Way to the extent such
Governmental Actions or Rights-of-Way are in writing or are required to be in
writing and (ii) a list of all Governmental Actions or Rights-of-Way which have
been obtained and which are not in writing, together with a certificate of a
Responsible Officer of the Company setting forth the procedure employed to
obtain such Governmental Actions and Rights-of-Way and confirming that such
items were not obtainable in writing from the issuer thereof. The Administrative
Agent (based on the advice of the Independent Engineer) shall have no reason to
believe that any of the Governmental Actions and Rights-of-Way listed in
Schedule 3.7(b) which have not been obtained as of such date will not be
obtained prior to the date required in Schedule 3.7(b).
(b) Evidence of Project Costs. (i) Except in relation to an
initial borrowing made within one month of the Closing Date, at least fifteen
(15) days prior to such Construction Loan, the Administrative Agent and the
Independent Engineer shall have received a Construction Progress Report,
together with a statement of the payments to be made pursuant to the Backhaul
Agreements and/or to the Contractor pursuant to the Construction Contract with
the proceeds of such Construction Loans, together with other documentation
reasonably requested by and satisfactory to the Administrative Agent and with
respect to all other items of Project Costs to be paid or advanced with the
proceeds of such Construction Loans.
(ii) Each Construction Progress Report delivered
pursuant to Section 4.2(b) may provide for an additional amount for
payments required to be made prior to the next Borrowing Date but which
are not specified in such Construction Progress Report in an amount not
to exceed $5,000,000 per calendar month plus any payments of value
added taxes which are expected to become payable prior to the next
Borrowing Date and $15,000,000 in the aggregate plus any payments of
value added taxes which are expected to become payable prior to the
next Borrowing Date at any time (the "ADDITIONAL BORROWING AMOUNT")
which amounts shall be placed into the Current Account; provided,
however, that the immediately succeeding Construction Progress Report
shall specify in reasonable detail to what payments the Additional
Borrowing Amount has been applied.
(c) Independent Engineer's Report; Certificate. Except in
relation to an initial borrowing made within one month of the Closing Date, the
Administrative Agent shall have received, with a copy for each Lender, a report
of the Independent Engineer within five (5) days of the Independent Engineer's
receipt of a Construction Progress Report, reasonably satisfactory in form and
substance to the Administrative Agent, to the effect that construction of the
Project is proceeding satisfactorily in accordance with the Construction
Contract, the Backhaul Agreements and within the overall Project Budget, and
each of the Critical Timetable Events set forth in the Project Timetable to be
completed by such date have been completed. The Independent
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Engineer's report shall also disclose any events or changes that have occurred
since the date of the last report delivered to the Lenders that have had or
could have a Material Adverse Effect. On the date of such Construction Loan, the
Administrative Agent shall have received, with a copy for each Lender, a
certificate from the Independent Engineer, dated such date and stating that in
its reasonable judgment (based upon Contractor performance to date in achieving
scheduled milestones and upon industry-wide performance and taking into account
any changes in resource allocation and in the overall construction program), the
Contractor will achieve the next Critical Timetable Event (and similar
milestones will accordingly be achieved pursuant to the Backhaul Agreements) on
or before the time required in the Project Timetable and the next Acceptance can
be expected to occur prior to the Required Applicable Acceptance Date, and the
Independent Engineer has received the Construction Progress Report(s) delivered
since the preceding Borrowing Date, which shall be true and correct in all
material respects, and, in the reasonable judgment of the Independent Engineer,
payments made pursuant to the Backhaul Agreements have been made in accordance
with the provisions of such agreements and payments made to the Contractor have
been made in accordance with the provisions of the Construction Contract.
(d) Performance Bond. The Performance Bond shall be in full
force and effect and in a stated amount equal to at least 10% of the then Total
Contract Price.
SECTION 4.3. Each Loan. The obligation of each Lender to make available
Construction Loans or Revolving Credit Loans on any Borrowing Date, including
the Closing Date, shall be subject to the fulfillment of, or waiver, in the
discretion of the Majority Lenders, of each of the following conditions
precedent:
(a) Borrowing Notice. The Administrative Agent shall have
received from the Company, three (3) Business Days (one (1) Business Day in the
case of ABR Borrowings) prior to the proposed Borrowing Date, a Borrowing
Notice, together with all schedules thereto; provided, however, that in the case
of Construction Loans the Company shall provide a draft Borrowing Notice to the
Administrative Agent and the Independent Engineer at least five (5) Business
Days prior to a proposed Borrowing Date.
(b) Representations and Warranties. All representations and
warranties made or deemed made by the Company on the applicable Borrowing Date
(other than the Closing Date, in which case Section 4.1(q) shall control) in
this Agreement shall be true and correct in all material respects on and as of
such date (unless any such representation or warranty relates solely to an
earlier date, in which case it shall have been true and correct in all material
respects as of such earlier date).
(c) No Default or Event of Default. No Default or Event of
Default shall be in existence on such date, or shall occur after giving effect
to the extension of credit to be made on such date.
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(d) No Change in Law. No change shall have occurred after the
Closing Date in any Applicable Law or in the interpretation thereof by any
Governmental Authority charged with the administration or interpretation thereof
(i) which would render void, voidable or invalid or require or cause the
cancellation, suspension or termination of any of the Financing Documents or any
of the Project Documents, and which would in the Administrative Agent's
reasonable discretion be likely to have a Material Adverse Effect or (ii) which
would cause any of the transactions contemplated hereby to violate any
Applicable Law and which would in the Administrative Agent's reasonable
discretion be likely to have a Material Adverse Effect.
(e) Perfection of Liens and Security Interest. All filings,
recordings and other actions that are necessary or, in the judgment of the
Administrative Agent as the case may be, desirable in order to establish,
protect and perfect the Administrative Agent's lien on and perfected security
interest in (and the First Priority (as defined in Schedule 5.26) status
thereof) all right, title, estate and interest of the Company, or the Sponsors,
as the case may be, in and to the Subject Collateral, shall have been duly made
or taken and all fees, taxes and other charges relating to such filings and
recordings and other actions shall have been paid in full. The Administrative
Agent as the case may be, shall have received authenticated copies, with a copy
for each Secured Party, or other evidence of all filings, recordings and other
actions obtained or made in order to create and perfect such perfected First
Priority lien on and perfected security interest in the Subject Collateral.
(f) No Force Majeure, Etc. No event of force majeure, or
similar event or condition shall exist which permits or requires any party to
any of the Project Documents to cancel, suspend or terminate its performance
thereunder in accordance with the terms thereof or which could reasonably be
expected to excuse any such party from liability for non-performance thereunder,
unless cancellation, suspension, termination or non-performance could not
reasonably be expected to have a Material Adverse Affect.
(g) Material Adverse Change. No material adverse change in the
financial condition, business or operations of the Company or the Project shall
have occurred since the Closing Date, and no other event shall have occurred
since the Closing Date which could reasonably be expected to have a Material
Adverse Effect.
(h) Project Documents. Each of the Project Documents (other
than the Capacity Sales Agreements which do not constitute Sponsor Pre-Sale
Capacity Commitments) shall be in full force and effect, no party thereto shall
be in material default thereunder and no condition shall then exist which would
permit any party to terminate any such Project Document, unless (i) the party
entitled to terminate any such Project Document is the Company and the event or
default giving rise to such termination right could not be expected to have a
Material Adverse Effect or (ii) the
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Company is in compliance with Section 6.10 and such Project Document has either
been replaced in accordance with Section 6.11, the effect of such termination
could not be expected to have a Material Adverse Effect or the Administrative
Agent has determined that such Project Document, if terminated, would not need
to be replaced. No party to any such Project Document shall have asserted that
such Project Document has ceased to be valid and binding and in full force and
effect or that such party is no longer obligated to perform under such Project
Document unless such assertion, in the reasonable opinion of the Company and the
Administrative Agent, has no merit or the effect of such assertion could
otherwise not be expected to have a Material Adverse Effect.
(i) Other Matters. The Administrative Agent and the Lenders
shall have received such information, opinions, documents and copies of such
other materials as any of them may reasonably request, which information,
opinions, documents and materials shall be in form and substance reasonably
satisfactory to such requesting party;
provided; however, that no Loans may be made which would result in the total
amount of Loans outstanding exceeding $190,000,000 until (i) the aggregate of
(x) cash proceeds from sales of Capacity (other than Sponsor Pre-Sales) and (y)
unpaid Capacity Commitments under executed Capacity Sales Agreements relating to
the Requisite Qualifying Pre-sales total not less than $200,000,000 and the
Company shall have provided the Administrative Agent with each such Capacity
Sales Agreement and each Pre-Sale Agreement Letter of Credit relating thereto
(if applicable); and (ii) each Landing License shall (a) have been obtained in
the name of the Company or its relevant Subsidiary and be in full force and
effect to the satisfaction of the Administrative Agent or (b) in the case of the
French or English Landing Licenses, the Company or its relevant Subsidiary shall
have received the right to use the correlative license of one of its Sponsors or
an affiliate thereof on terms and conditions satisfactory to the Administrative
Agent.
SECTION 4.4. Conversion Date. The obligations of the Construction Loan
Lenders to convert their respective Construction Loans to Term Loans hereunder
shall be subject to the fulfillment, or waiver by the Majority Lenders in their
sole discretion, of each of the following conditions precedent, together with
each of the conditions set forth in Section 4.3:
(a) Term Loan Notes and Related Certificate. Upon written
request, each applicable Construction Loan Lender may receive a Term Loan Note
in the principal amount of such Lender's Term Loans as determined as of the
Conversion Date, and each such Note dated the Conversion Date and duly executed
and delivered by the Company, in exchange for the return to the Company of the
outstanding Construction Loan Notes held by each Lender who requested such Term
Loan Notes, each marked "Canceled". In addition, the Administrative Agent shall
have received from the
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Company a certificate of a Responsible Officer setting forth the amount of the
Term Loans created on the Conversion Date, together with such additional
information for the Administrative Agent to verify the conclusions set forth
therein.
(b) Payment of Project Costs. All Project Costs and other
costs set forth in the Project Budget scheduled to have been paid from the
proceeds of amounts to be funded under this Agreement and the Sponsor Pre-Sale
Capacity Commitments shall have been paid in full, or other support arrangements
which are satisfactory to the Administrative Agent shall have been made for the
payment thereof.
(c) Governmental Actions; Rights-of-Way. All Governmental
Actions and Rights-of-Way set forth in Schedule 3.7(b) and any additional
Governmental Actions and Rights-of-Way which are required in accordance with
such Schedule or pursuant to Applicable Law to be obtained on or prior to the
Conversion Date shall have been duly obtained or made, shall be in full force
and effect and shall be Final, and a copy of each such Governmental Action and
Right-of-Way (to the extent such Governmental Action is in writing or is
required to be in writing pursuant to Schedule 3.7(b)) shall have been delivered
to the Administrative Agent, together with a certificate of all Governmental
Actions which were obtained by the Company by a means other than in writing. The
Administrative Agent (based on the advice of the Independent Engineer) shall
have no reason to believe that any of the Governmental Actions and Rights-of-Way
listed in Schedule 3.7(b) which have not been obtained as of such date will not
be obtained prior to the date required in Schedule 3.7(b).
(d) Equity Contributions. Cash Equity Contributions to the
Company in an amount equal to the Cash Equity Contribution Amount shall have
been made in full in cash to the Equity Proceeds Account.
(e) Operating Budget; Revised Operating Projections. The
Administrative Agent shall have received, with a copy for each Lender, (i) an
Operating Budget covering the first Operating Year of the Project, which shall
be in form and substance reasonably satisfactory to the Administrative Agent
(upon consultation with the Independent Engineer) and (ii) revised Operating
Projections, prepared in a manner consistent with the Operating Projections
delivered pursuant to Section 4.1(v), in each case certified by a Responsible
Officer of the Company as being prepared in good faith in full consideration of
all information known to such officer, after due inquiry, as of the Conversion
Date.
(f) Performance Bond. The Performance Bond shall be in full
force and effect and in a stated amount equal to at least 5% of the Total
Contract Price.
(g) Acceptance (Phase 2). Acceptance (Phase 2) shall have
occurred by the Required Applicable Acceptance Date and the Administrative Agent
shall have
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received by such date a duly executed Certificate of Provisional Acceptance
(Phase 2) or Certificate of Commercial Acceptance (Phase 2).
(h) Backhaul Completion. The Backhaul Elements shall be ready
for service as certified by the Independent Engineer.
(i) Charge Over Business Agreement. The French Subsidiary
shall have entered into the Charge Over Business Agreement and shall have
provided a legal opinion with respect thereto in form and substance acceptable
to the Administrative Agent.
(j) Requisite Qualifying Pre-Sales. Requisite Qualifying
Pre-Sales shall have been obtained (at any time on or prior to the proposed
Conversion Date whether by way of Capacity Commitments or actual cash proceeds)
in the amount of not less than $200,000,000.
SECTION 4.5. Equity Withdrawals. The right of the Company to
make Equity Withdrawals shall be subject to the fulfillment of, or waiver by the
Administrative Agent of, each of the following conditions precedent:
(a) Governmental Actions: Rights-of-Way. All Governmental
Actions and Rights-of-Way set forth in Schedule 3.7(b) and any additional
Governmental Actions and Rights-of-Way which are required in accordance with
such Schedule or pursuant to Applicable Law to be obtained on or prior to such
date, shall have been duly obtained or made, shall be in full force and effect
and shall be Final. The Administrative Agent shall have received (i) copies of
such Governmental Actions and Rights-of-Way to the extent such Governmental
Actions or Rights-of-Way are in writing or are required to be in writing and
(ii) a list of all Governmental Actions or Rights-of-Way which have been
obtained and which are not in writing, together with a certificate of a
Responsible Officer of the Company setting forth the procedure employed to
obtain such Governmental Actions and Rights-of-Way and confirming that such
items were not obtainable in writing from the issuer thereof. The Administrative
Agent (based on the advice of the Independent Engineer) shall have no reason to
believe that any of the Governmental Actions and Rights-of-Way listed in
Schedule 3.7(b) which have not been obtained as of such date will not be
obtained prior to the date required in Schedule 3.7(b).
(b) Evidence of Project Costs. At least fifteen (15) days
prior to such Equity Withdrawal, the Administrative Agent and the Independent
Engineer shall have received a Construction Progress Report, together with a
statement of the payments to be made pursuant to the Backhaul Agreements and/or
to the Contractor pursuant to the Construction Contract with the proceeds of
such Equity Withdrawal, together with other documentation reasonably requested
by and satisfactory to the Administrative Agent and with respect to all other
items of Project Costs to be paid or advanced with the proceeds of such Equity
▇▇▇▇▇▇▇▇▇▇.
▇▇
▇▇
(c) Independent Engineer's Report; Certificate. The
Administrative Agent shall have received, with a copy for each Lender, a report
of the Independent Engineer dated not more than ten (10) days prior to the date
of such Equity Withdrawal, reasonably satisfactory in form and substance to the
Administrative Agent, to the effect that construction of the Project is
proceeding satisfactorily in accordance with the Construction Contract, the
Backhaul Agreements and within the overall Project Budget, and each of the
Critical Timetable Events set forth in the Project Timetable to be completed by
such date have been completed. The Independent Engineer's report pursuant to
this clause (c) shall also disclose any events or changes that have occurred
since the date of the last report delivered to the Lenders that has had or could
have a Material Adverse Effect. On the date of such Equity Withdrawal, the
Administrative Agent shall have received, with a copy for each Lender, a
certificate from the Independent Engineer, dated such date and stating that in
its reasonable judgment (based upon Contractor performance to date in achieving
scheduled milestones and upon industry-wide performance and taking into account
any changes in resource allocation and in the overall construction program), the
Contractor will achieve the next Critical Timetable Event (and similar
milestones will accordingly be achieved pursuant to the Backhaul Agreements), on
or before the time required in the Project Timetable and the next Acceptance (if
any) can be expected to occur prior to the relevant Required Applicable
Acceptance Date.
(d) Performance Bond. The Performance Bond shall be in full
force and effect and in a stated amount equal to at least 5% (or such higher
amount as required by the Construction Contract) of the then Total Contract
Price.
ARTICLE V
AFFIRMATIVE COVENANTS
Until all the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees and other obligations
payable hereunder and under the other Financing Documents shall have been paid
in full, the Company covenants and agrees with the Administrative Agent and the
Lenders that:
SECTION 5.1. Completion of the Project. The Company shall cause the
Project to be duly constructed and completed in accordance with all applicable
international, national, state and local engineering, construction and safety
codes and standards and in accordance with the Specifications. The Company shall
provide to the (I) Independent Engineer a copy of each report furnished by (a)
the Contractor to the Company pursuant to the Construction Contract, and (b) any
contractor or other counterparty pursuant to the Backhaul Agreements, and (II)
to the Administrative Agent (with a copy for each Lender), the Company's monthly
Project report and shall respond, and shall cause the Contractor and any
contractor or other counterparty to a Backhaul Agreement (including a Sponsor or
any Affiliate thereof) to respond, to the
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Independent Engineer's reasonable inquiries regarding such Person's performance
of its work under the Construction Contract and any Backhaul Agreement.
SECTION 5.2. Financial Statements and Other Information. The Company
shall deliver to the Administrative Agent, with a copy for each Lender, the
following:
(a) within ninety (90) days after the end of each fiscal year
of the Company, its audited consolidated balance sheet and related consolidated
statements of income, retained earnings and change in cash flow as of the end of
and for such year, setting forth in each case in comparative form the figures
for the previous fiscal year, all reported on by independent public accountants
of recognized national standing reasonably acceptable to the Administrative
Agent (without qualification or exception as to the scope of such audit) to the
effect that such financial statements present fairly in all material respects
the financial condition and results of operations of the Company and its
consolidated Subsidiaries in accordance with GAAP consistently applied;
(b) within forty five (45) days after the end of each of the
first three fiscal quarters of each fiscal year of the Company (commencing with
the fiscal quarter ending September 30, 1999, a consolidated balance sheet of
the Company as of the end of such fiscal quarter and the related consolidated
statements of income, retained earnings and change in cash flow for such fiscal
quarter and the then elapsed portion of the fiscal year, setting forth in each
case in comparative form the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by a Responsible Officer of the Company as presenting fairly
in all material respects the financial condition and results of operations of
the Company and its consolidated Subsidiaries in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) concurrently with any delivery of the financial statements
referred to in clauses (a) and (b), a certificate of a Responsible Officer of
the Company certifying to such officer's knowledge whether a Default has
occurred and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto;
(d) concurrently with any delivery of the financial statements
referred to in clause (a), a certificate of the independent public accountants
who certified such financial statements, if available from such independent
public accountants, stating that in making the examination necessary to the
audit thereof no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate (which certificate may be limited to the
extent permitted by accounting rules or guidelines);
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(e) following the Conversion Date, simultaneously with the
delivery of any Expense Certificate in accordance with Section 8.12(a), to the
Administrative Agent only, a certificate of a Responsible Officer of the Company
setting forth all Operating Expenses, capital expenditures and income taxes paid
out of the Current Account since the date of the last Expense Certificate;
(f) promptly after its receipt, copies, to the extent in
writing (or, to the extent not in writing, a certificate of a Responsible
Officer of the Company setting forth each Governmental Action or Right-of-Way
obtained which is not in writing and the procedure employed for obtaining such
Governmental Action or Right-of-Way) of each Governmental Action or Right-of-Way
obtained or made by the Company, or obtained or made by the Contractor and
delivered to the Company pursuant to the Construction Contract;
(g) promptly after the Company's delivery thereof or receipt
thereof, as the case may be, a copy of each material notice, document, report,
demand or other communication (not to include routine correspondence) delivered
pursuant to any Project Document or otherwise, and a copy of each financial
statement of any party to a Project Document (other than the Company) received
by the Company pursuant to any Project Document; and
(h) such other information respecting the conditions or
operations, financial or otherwise, of the Company or any Subsidiary thereof as
the Administrative Agent may from time to time reasonably request.
SECTION 5.3. Reports; Other Information. (a) The Company shall deliver
to the Administrative Agent within thirty (30) days after the end of each fiscal
quarter (commencing with the first fiscal quarter ending after the Closing Date)
a report which sets forth (i) the aggregate proceeds received in respect of the
sale, lease or other disposition of Capacity since the end of the previous
fiscal quarter, (ii) the aggregate amount of Capacity Commitments owing, but not
yet paid, as at the end of such fiscal quarter and the date such Capacity
Commitments become (or became) due, (iii) a list of the Capacity Purchasers who
have purchased or leased Capacity and the aggregate dollar value of Capacity
acquired by each such Capacity Purchaser during such fiscal quarter, (iv) the
aggregate STM-1s disposed of during such fiscal quarter, (v) any termination of
commitments for the sale, lease or other disposition of Capacity during such
fiscal quarter, (vi) the aggregate amount of Capacity disposed of for non-cash
consideration during such fiscal quarter, and (vii) any and all rebates or other
returns of cash to Capacity Purchasers during such fiscal quarter.
(b) The Company shall deliver to the Administrative Agent,
with a copy for each Lender, within twenty (20) days after the end of each
fiscal quarter falling after the fiscal quarter in which the Conversion Date
occurs, a certificate of a Responsible Officer of the Company setting forth
reasonably detailed calculations of
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the Cumulative Capacity Sales Revenue, Interest Coverage Ratio and Present Value
Coverage Ratio, in each case calculated as of the end of such fiscal quarter in
accordance with Sections 6.28, 6.29 and 6.30, and if such calculations
demonstrate that a Designated Event shall have occurred and be continuing, a
certification thereof.
(c) Within three Business Days prior to each Principal Payment
Date, the Company shall deliver to the Administrative Agent a certificate
setting forth the Required Balance with respect to the Debt Reserve Account, the
Maintenance Reserve Account and the Capacity Upgrades Reserve Account, as of
such Principal Payment Date.
(d) The Company shall deliver to the Administrative Agent each
new Pricing Schedule effective upon its adoption.
(e) The Company shall deliver to the Administrative Agent each
Certificate of Provisional Acceptance, or Certificate of Commercial Acceptance
each of which shall be duly endorsed by the Company and the Independent Engineer
within five (5) Business Days of the date of the applicable Acceptance Date.
(f) The Company shall deliver to the Administrative Agent no
later than thirty days in advance of the Provisional Acceptance Date (Phase 1) a
true and complete copy of the Operations and Maintenance Plan, duly certified as
such by a Responsible Officer of the Company.
SECTION 5.4. Payment of Obligations. The Company shall pay, and shall
cause each of its Subsidiaries to pay, at or before maturity or before they
become delinquent, as the case may be, all its obligations under the Financing
Documents and all its other material obligations of whatever nature, except,
with respect to such other material obligations, where the amount or validity
thereof is subject to a Contest.
SECTION 5.5. Existence. The Company shall do or cause to be done, and
shall cause each of its Subsidiaries to do or cause to be done, all things
necessary to preserve, renew and keep in full force and effect its legal
existence and take all reasonable action to maintain all rights, privileges and
franchises material, necessary or desirable in the normal conduct of its
business except where the failure to maintain such rights, privileges and
franchises, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.
SECTION 5.6. Compliance with Laws. The Company shall, and shall cause
each of its Subsidiaries to, comply in all material respects with all Applicable
Laws (including, without limitation, all Environmental Laws and Governmental
Actions) applicable to it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
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SECTION 5.7. Performance and Enforcement of Agreements. The Company
shall, and shall cause each of its Subsidiaries to, observe in all material
respects the covenants and agreements of the Company or such Subsidiary, as the
case may be, contained in each Transaction Document and all of its other
material obligations contained in each other document to which the Company or
such Subsidiary is a party. The Company shall, and shall cause each of its
Subsidiaries to, enforce in a diligent and commercially reasonable manner all of
its rights under the Transaction Documents, unless forbearance is commercially
reasonable.
SECTION 5.8. Taxes and Claims. (a) The Company shall, and shall cause
each of its Subsidiaries to, pay and discharge all Taxes lawfully imposed on it
or on its income or profits or on any of its property and all other lawful
claims prior to the date on which penalties attach thereto unless such Tax or
claim is subject to a Contest.
(b) The Company shall use its best efforts to, and shall cause
each of its Subsidiaries to use its best efforts to, maintain and keep in full
force and effect all clearance rulings, decrees or similar items necessary to
continue the exemption of the Company or such Subsidiary from the impositions of
any Tax or similar charge on which the Company or such Subsidiary is relying
(other than, with respect to any Operating Year, (i) value added taxes payable
in connection with sales of Capacity and (ii) any other Taxes and other charges
in an aggregate amount not exceeding 105% of the amount budgeted therefor in
respect of such Operating Year).
SECTION 5.9. Notices. The Company shall, promptly after a Responsible
Officer of the Company has knowledge thereof, give written notice to the
Administrative Agent of:
(a) the occurrence of any Default, Event of Default or Event
of Loss;
(b) any payment default under any Project Document (i) in an
amount in excess of $1,000,000 or (ii) in an amount in excess of $500,000 if
such amount is deemed uncollectible by the Company or has been outstanding for
greater than 60 days;
(c) any litigation or similar proceeding affecting the
Company, any of its Subsidiaries or the Project (or any portion thereof) or
concerning any Governmental Action relating to the Project (including any
Governmental Action between any Capacity Purchaser and any Governmental
Authority), which, if adversely determined, could reasonably be expected to have
a Material Adverse Effect;
(d) any proceeding by or before any tax regulatory authority
contesting the tax position of the Company or any of its Subsidiaries if the
resolution of such proceeding could result in an increased liability in excess
of $1,000,000;
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(e) the occurrence of any ERISA Event that alone or together
with any other ERISA Events that have occurred, could reasonably be expected to
result in liability in an aggregate amount in excess of $1,000,000;
(f) any event constituting force majeure under any Principal
Project Document which may have a material adverse impact on the Project;
(g) the cancellation or revocation of any material
Governmental Actions, Rights-of-Way or other consents or approvals or the
failure to obtain, maintain or renew and keep in full force and effect any
material Governmental Actions, Rights-of-Way or other consents or approvals;
(h) any Lien (other than Permitted Liens) against any
Collateral or any portion of the Project;
(i) the initiation of any condemnation or expropriation or
similar proceedings against any of the Collateral or the Project or any portion
thereof;
(j) any proposed change or supplement to the configuration of
the Project approved by the Company's Board of Directors or of any event which
could lead to a change, supplement or breakage in the System Configuration;
(k) any issuance or proposed issuance of any class of Capital
Stock of the Company, or of any sale or proposed sale of any Capital Stock of
the Company;
(l) its intent to enter into any material amendment to any
Principal Project Document, together with a draft thereof prior to its execution
as well as an executed counterpart upon execution;
(m) any interruption in the operation of the Project (or any
portion thereof) of which the Company generally notifies its customers; and
(n) any other event, fact or development that has resulted in,
or could reasonably be expected to result in, a Material Adverse Effect.
SECTION 5.10. Insurance. (a) The Company shall purchase no later than
thirty (30) days after the Closing Date, insurance complying with the provisions
of subsection 5.10(b) and shall promptly deliver to the Administrative Agent,
with a copy for each Lender, (i) certificates of insurance signed in each case
by the insurer or an agent authorized to bind the insurer (or other evidence of
insurance reasonably satisfactory to the Administrative Agent) and (ii) a
certificate of the Insurance Advisor, setting forth the types and amounts of
insurance obtained by the Company and the risks covered thereby, and stating
that such insurance is in full force and effect, complies with
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the requirements of subsection 5.10(b) and that all currently due premiums
therefor have been paid in full.
(b) The Company shall, and shall cause each of its
Subsidiaries to, at all times carry and maintain or cause to be carried and
maintained the insurance set forth in Schedule 5.10. All such insurance shall
comply with the other provisions set forth in Schedule 5.10. The Company shall
promptly deliver one true and complete copy of each insurance policy requested
by the Administrative Agent, duly certified by a Responsible Officer of the
Company.
SECTION 5.11. Fiscal Year. The fiscal year of the Company and its
Subsidiaries shall be the twelve-month period ending on December 31 of each
year.
SECTION 5.12. Use of Proceeds. The proceeds of the Loans shall be used
(a) to finance the project costs associated with the design, engineering,
construction and installation of the Project, including the repayment of loans
advanced by the Sponsors or affiliates thereof to the Company on the initial
funding date (the proceeds of which were used to fund payments to the
Contractor), provided that any such repayments shall not exceed $11,000,000 in
the aggregate, (b) to pay transaction, legal, financing (including interest
expense and fees) and other related costs and (c) to fund Operating Expenses and
working capital requirements, all in accordance with the Schedule of Sources and
Uses; provided, however, that the proceeds of the Revolving Credit Loans shall
be used (a) prior to the Conversion Date to fund any shortfalls in the Project
Budget and (b) after the Conversion Date to fund cash shortfalls in Operating
Expenses and other working capital requirements.
SECTION 5.13. Interest Rate Protection. The Company shall, (i) within
three (3) months after the Closing Date, enter into one or more Interest Hedging
Agreements to hedge the Company's interest rate exposure on at least 50% of the
projected outstanding Construction Loans until three (3) months after the
projected Conversion Date and (ii) within three (3) months after the Conversion
Date, enter into one or more Interest Hedging Agreements to hedge the Company's
interest rate exposure on at least 50% of the outstanding Term Loans from time
to time for a period of at least three (3) years from the Conversion Date, all
on terms reasonably satisfactory to the Administrative Agent.
SECTION 5.14. Capacity Sales Agreement Letters of Credit. The Company
shall cause any and all reimbursement obligations related to each letter of
credit that is issued in support of a Capacity Purchaser's payment obligations
under a Capacity Sales Agreement to be on a non-recourse basis with respect to
the Company, its revenues, property and other assets (including, without
limitation, the Project and any portion thereof), other than in respect of
limited recourse obligations in favor of certain providers of Pre-Sale Capacity
Agreement Letters of Credit, but only to the extent such
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recourse is limited to a Permitted Lien on the Company's rights under the
corresponding Capacity Sales Agreement.
SECTION 5.15. Governmental Actions and Rights-of-Way. The Company shall
obtain, or cause to be obtained, and maintain, or cause to be maintained, in
full force and effect all material Governmental Actions, Rights-of-Way and other
consents and approvals as are at the time necessary in order for the Company and
its Subsidiaries, (a) to operate and maintain the Project as contemplated by the
Facilities Management Agreements, (b) to transfer Capacity and (c) to perform
all other Project Activities, except where the failure to obtain or maintain
such Governmental Actions, Rights-of-Way, consents or approvals, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; provided, however, that in any event the Company and/or its relevant
Subsidiary shall have been granted a Landing License in its own name (or in the
name of its relevant Subsidiary) in each of France and England and is no longer
utilizing a correlative license of one of its Sponsors or an affiliate thereof
by no later than June 30, 2001.
SECTION 5.16. Cooperation with Independent Engineer. The Company shall
keep the Independent Engineer fully informed on a timely basis with respect to
(a) capital expenditures for the Project and (b) prior to the Acceptance Date
(Phase 2), all material matters relating to the Project, and shall meet (and
cause the Contractor to meet) the Independent Engineer at reasonable times and
upon reasonable notice to discuss any of the foregoing.
SECTION 5.17. Revenue Account. Subject to Section 8.2, the Company
shall deposit, and shall direct others (including all of its Subsidiaries) to
pay or deposit, all Project Revenues directly into the Revenue Account as
required by Article VIII.
SECTION 5.18. Maintenance of Process Agent. The Company shall, and
shall cause each of its Subsidiaries to, maintain in New York, New York a Person
acting as agent to receive on its behalf service of process pursuant to Section
10.9(e).
SECTION 5.19. System Operation and Maintenance. The Company shall cause
the Project to be operated and maintained in an efficient and business-like
manner in accordance with the terms of the Project Documents.
SECTION 5.20. Event of Loss. (a) The Company shall immediately notify
the Administrative Agent in writing of the occurrence of an Event of Loss and,
unless the affected portion of the Project is being repaired, replaced or
restored in accordance with Section 5.20(b), the Company shall deliver to the
Administrative Agent within 30 days of the occurrence of such Event of Loss, a
certificate of a Responsible Officer of the Company (the "EOL COMPLIANCE
CERTIFICATE") certifying as to the Present Value Coverage Ratio as of the last
day of the immediately preceding calendar quarter (but recalculated to give
effect to such Event of Loss).
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(b) If an Event of Loss shall occur or a Special Payment shall
be made and no Event of Default shall have occurred and be continuing and (i) in
the Independent Engineer's reasonable opinion it is technically feasible to
restore, rebuild or replace the affected portion of the Project within six (6)
months, (ii) in the Administrative Agent's reasonable opinion (after
consultation with the Consultants) there are or will be sufficient funds
available to the Company (from Permitted Sources, Special Payments, proceeds of
insurance and/or other sources permitted by the Majority Lenders) to (x)
restore, rebuild or replace the affected portion of the Project so that the
Project will be able to operate as reliably and efficiently (and with a
comparable market value) as the Project operated (and was valued) prior to such
event (and in any event on a basis sufficient to pay the Loans and all other
obligations owing to the Lenders), (y) pay all cash operating and maintenance
costs and all the principal of, and interest on and all fees with respect to,
the Loans and to pay all other Obligations coming due prior to the time such
restoration, rebuilding or replacement is completed and (z) pay all obligations
to any Capacity Purchaser which may be coming due prior to the time such
restoration, rebuilding or replacement is completed (as a result of such Event
of Loss or otherwise), (iii) no party to any Project Document shall have the
right to terminate such Project Document at any time during the period of
restoration, rebuilding or replacement as a result of any such Event of Loss
unless, with respect to such Project Document, such termination could not
reasonably be expected to have a Material Adverse Effect, and (iv) in the
Independent Engineer's reasonable opinion, it is reasonably likely that the
Company (or other applicable Persons) will have as and when needed all rights of
way and permits necessary to restore, rebuild or replace the affected portion of
the Project, then the Company, at its sole cost and expense, shall restore,
rebuild or replace the affected portion of the Project.
SECTION 5.21. Books and Records; Inspection Rights. (a) The Company
shall, and shall cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Company shall, and
shall cause each of its Subsidiaries to, permit any representative of the
Lenders designated by the Administrative Agent, (as applicable) upon reasonable
prior notice, to visit and inspect its properties, to examine and make copies
from its books and records and to discuss its affairs, finances and condition
with its officers and its independent accountants, all at such reasonable times
and as often as reasonably requested. The Company agrees that the Administrative
Agent the Independent Engineer and each other advisor to the Lenders (at the
Company's expense), may visit the Company's executive offices, any other portion
of the Project, each site where Work is being performed (but only to the extent
of the Company's rights of access thereto) and other properties owned by the
Company or any of its Subsidiaries at any and all reasonable times during normal
business hours, upon reasonable advance notice.
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(b) The Administrative Agent, the Independent Engineer and
each other advisor to the Lenders will be given access, to the extent within the
possession or control of the Company or any of its Subsidiaries or to the extent
the Company or any of its Subsidiaries has rights of access, to (i) all Design
Documents (including, without limitation, data relating to any proposed design
changes in the Project), (ii) quality control data, (iii) invoices relating to
construction progress and to services to be performed and materials to be
supplied on a cost reimbursement basis, and invoices relied on by the Contractor
in verifying construction progress to the extent the Company or any of its
Subsidiaries has received the same, (iv) contracts relating to the engineering
of, the procurement of services, equipment, supplies or other materials for, or
the construction of, the Project and (v) all other data relating to the Project
as may be reasonably requested by the Administrative Agent or the Independent
Engineer.
SECTION 5.22. Foreign Corrupt Practices Act. The Company shall, and
shall cause each of its Subsidiaries to, comply in all material respects with
the Foreign Corrupt Practices Act of the United States, or any similar law of
any other jurisdiction, if applicable.
SECTION 5.23. Intellectual Property. (a) The Company shall own, or
shall have valid licenses to use, and shall cause each of its Subsidiaries to
own or have valid licenses to use, all Intellectual Property as and when
necessary for the conduct of its business as currently conducted by it and
proposed to be conducted that are material to the condition (financial or
other), business or operations of the Company and its Subsidiaries, taken as a
whole, or the Project.
(b) The Company shall, and shall cause each of its
Subsidiaries to, take all reasonably necessary steps to maintain and pursue any
application (and to obtain the relevant registration) filed with respect to, and
to maintain any registration of, any material item of the Intellectual Property
owned by the Company or such Subsidiary, including the filing of applications
for renewal, affidavits of use, affidavits of incontestability and opposition,
interference proceedings and the payment of appropriate fees, except where the
failure to so maintain, obtain or pursue could not reasonably be expected to
have a Material Adverse Effect.
(c) The Company shall, prior to the end of the Warranty
Period, enter into software maintenance agreements and software licensing
agreements on terms reasonably satisfactory to the Administrative Agent and the
Independent Engineer.
SECTION 5.24. Budgets and Operating Reports. Prior to the Conversion
Date, and after prior review by and discussion with the Administrative Agent
(after consultation with the Independent Engineer), the Company will adopt an
operating budget (the "OPERATING BUDGET") and an Operating Plan (the "OPERATING
PLAN") for the initial Operating Year. The Operating Budget and the Operating
Plan will contain such line items as are satisfactory to the Company, the
Administrative Agent and the
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Independent Engineer, including in the Operating Budget a line item projection
of project revenues and cash operating costs for the forthcoming Operating Year.
No fewer than thirty (30) days prior to the beginning of each Operating Year of
the Company thereafter, and after prior review by and discussion with the
Administrative Agent (after consultation with the Independent Engineer), the
Company will similarly adopt an Operating Budget and an Operating Plan for the
ensuing Operating Year of the Company provided in no event shall any Operating
Budget provide for capital expenditures (other than in respect of Capacity
Upgrades) in excess of $1,000,000 for such Operating Year. Copies of the
Operating Budget and the Operating Plan for each such Operating Year shall be
delivered promptly to the Administrative Agent and the Lenders together with an
update of the Operating Projections.
SECTION 5.25. Spare Parts. The Company shall maintain, on and after
each applicable Acceptance, at each maintenance depot such spare parts, test and
maintenance equipment, tools and consumables with respect to the applicable
Phase as are customary in accordance with the practices, standards and
procedures for the operators of fiberoptic cables.
SECTION 5.26. Material Real Estate Assets. In the event that the
Company or any Subsidiary thereof acquires an interest in a Material Real Estate
Asset and such interest has not otherwise been made subject to the Lien of the
Security Documents in favor of Administrative Agent for the benefit of the
Secured Parties, then the Company or such Subsidiary, contemporaneously with
acquiring the interest in such Material Real Estate Asset, shall take all such
actions and execute and deliver, or cause to be executed and delivered, all such
mortgages, documents, instruments, agreements, opinions and certificates,
including, without limitation, those described on Schedule 5.26, as the
Administrative Agent shall reasonably request to create in favor of
Administrative Agent for the benefit of Lenders, a valid and, subject to any
filing and/or recording referred to herein, perfected First Priority (as defined
in Schedule 5.26) security interest in such Real Estate Assets, (subject to such
exceptions to title insurance coverage as may be provided under Applicable Law).
SECTION 5.27. Notices of Assignment. The Company shall notify all
account debtors under all accounts and general intangibles for money due of the
First Priority security interest of the Administrative Agent pursuant to the
Company Security Agreements. Such notice shall either be incorporated into the
relevant agreements giving rise to such accounts or general intangibles or the
Company shall send a separate notice to the account debtor. Any such notice
(whether included in the relevant agreement or a separate notice) shall be in
the form of Exhibit G.
SECTION 5.28. French Guarantee Fee. The Company shall pay to FLAG
Atlantic France S.A.R.L. (the "French Subsidiary") a guarantee fee in
consideration for the guarantee issued by the French Subsidiary in favor of the
Secured Party under the Subsidiary Guarantee Agreement.
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SECTION 5.29. Charge Over Business. The Company shall cause the French
Subsidiary to enter into the Charge Over Business Agreement within one month of
the French Subsidiary commencing operations. For this purpose, "commencing
operations" means that the landing station situated in France has started
commercial operations.
SECTION 5.30. Further Assurances. The Company shall cause to be
promptly and duly taken, executed, acknowledged and delivered all such further
acts, documents and assurances as the Administrative Agent from time to time may
reasonably request in order to carry out more effectively the intent and
purposes hereof and of the other Financing Documents, including with respect to
the maintenance of perfection of all Subject Collateral.
ARTICLE VI
NEGATIVE COVENANTS
Until all the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees and other obligations payable
hereunder and under the other Financing Documents have been paid in full, the
Company covenants and agrees with the Administrative Agent and the Lenders that
(except as otherwise permitted by the applicable Lenders in accordance with
Section 10.2):
SECTION 6.1. Indebtedness. The Company shall not, and shall not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Company incurred under the Financing
Documents and in respect of the Obligations and the Guaranty of such
Indebtedness by any Subsidiary of the Company;
(b) Capital Lease Obligations of the Company or any Subsidiary
permitted by Section 6.15;
(c) Indebtedness of the Company under, or constituting net
exposure under, Interest Hedging Agreements entered into in accordance with
Section 5.13 or otherwise permitted by the Administrative Agent;
(d) Indebtedness of the Company or any Subsidiary under any
Permitted Sale Leaseback;
(e) unsecured Indebtedness of the Company or any Subsidiary
owing to any Sponsor or to any Affiliate, the principal of which is payable only
after the repayment of the Obligations, which is expressly subordinated to the
Obligations and which contains terms (including terms with respect to
subordination) that are
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satisfactory to the Administrative Agent (which terms shall (i) include that,
upon any foreclosure with respect to the Capital Stock of the Company, such
Indebtedness shall only be payable from the excess proceeds of such foreclosure
after application of such proceeds to the Obligations, and (ii) provide for no
cash interest payments, except for cash interest payments to the extent and only
to the extent funds are actually made available to the Company in accordance
with clause "ninth" of Section 8.12(b) and only if no Default, Event of Default
or Designated Event shall have occurred and be continuing);
(f) any other unsecured Indebtedness of the Company or any
Subsidiary owing to any other Person which is expressly subordinated to the
Obligations and which contains terms (including with respect to subordination)
that are satisfactory to the Administrative Agent; provided, however, and only
to the extent, that the proceeds of such Indebtedness are utilized to pay
Project Costs in excess of those provided for in the Project Budget;
(g) Indebtedness of any Subsidiary of the Company to the
Company;
(h) other Indebtedness of the Company and any Subsidiary in an
aggregate principal amount not to exceed $1,000,000 at any one time;
(i) any Indebtedness under Revolving Credit Loans entered into
after the Closing Date; and
(j) any limited-recourse Indebtedness in connection with the
procurement of letters of credit to support the payment obligations of certain
Capacity Purchasers, provided that recourse is limited to an assignment of the
Company's right to demand and receive payment from the applicable Capacity
Purchaser whose payment obligations are supported by such letter of credit.
SECTION 6.2. Liens. The Company shall not, and shall not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien on the
Collateral (or any part thereof), the Project (or any portion thereof) or any of
its, or its Subsidiaries' other assets, other than Permitted Liens.
SECTION 6.3. Fundamental Changes. The Company shall not, and shall not
permit any of its Subsidiaries to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
change its form of organization or its business, or liquidate or dissolve.
SECTION 6.4. Sale of Assets. The Company shall not, and shall not
permit any of its Subsidiaries to, sell, lease, convey, assign, transfer or
otherwise dispose of (each, a "TRANSFER") all or any portion of its assets
except:
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(a) Transfers of Capacity (and capacity on other
telecommunication systems acquired in accordance with the terms hereof) in
accordance with Section 6.13;
(b) Transfers of assets in the ordinary course of business not
required for the efficient operation of the Project for fair value with a book
value not exceeding $10,000,000 in the aggregate for all fiscal years cumulative
for the life of the Project for all such Transfers under this clause (b);
(c) Transfers by the Company in connection with Permitted Sale
Leasebacks;
(d) Transfers of obsolete, worn out or defective equipment and
other assets for fair value in cash and/or cash equivalents; and
(e) Transfers of assets by a Subsidiary of the Company to the
Company and by the Company to its Subsidiaries (provided, however, any such
transfer to any Subsidiary located in France must be approved in writing by the
Administrative Agent, subject to terms and conditions satisfactory thereto in
its reasonable discretion);
(f) Transfers of the Company's rights under Capacity Sales
Agreements made in favor of certain providers of Pre-Sale Letters of Credit
pursuant to conditional assignments in accordance with the provisions of Section
5.14 of this Agreement.
provided that (i) the Net Cash Proceeds of a Transfer under clauses (b), (c) and
(d) shall be deposited in the Sales and Issuances Proceeds Account and shall be
applied in accordance with Section 2.9 and (ii) other proceeds received in
respect of Transfers permitted under this Section (including under clause (a))
shall be, subject to Section 8.2, deposited into the Revenue Account for
application in accordance with Article VIII; [*******].
SECTION 6.5. Investments, Acquisitions, Etc. (a) The Company shall not,
and shall not permit any of its Subsidiaries to purchase, hold or acquire any
Capital Stock, evidences of indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guaranty any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, or become a general
or limited partner in any partnership or a joint venturer in any joint venture
or enter into any profit sharing or royalty agreement or similar arrangement
whereby the income or profits of the Company or any of its Subsidiaries are, or
might be, shared with any Person, except:
(i) Permitted Investments;
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(ii) the Company may own Capital Stock of
wholly-owned Subsidiaries created in accordance with Section 6.23;
(iii) the Company may make equity contributions in
any such Subsidiary;
(iv) Guaranties permitted by Section 6.1 and
Guaranties by the Company of obligations of its Subsidiaries to the
extent such obligations are set forth in the then current Project
Budget and Operating Budget;
(v) the Company may enter into reasonable joint
marketing agreements or arrangements;
(vi) the Company may, through any of its
Subsidiaries, become a joint venturer in a joint venture so long as (x)
such Subsidiary shall not enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon the ability of such Subsidiary to pay dividends or
otherwise make distributions on its Capital Stock and (y) parties to
the transaction with such Subsidiary shall have no recourse against the
Company in respect of such transaction; and
(vii) the Company may acquire capacity on other
telecommunications systems on reasonable, arm's-length terms, provided
that any costs related thereto are (i) included within the Project
Budget or the relevant Operating Budget or (ii) are supported by
Capacity Commitments by customers seeking interim capacity prior to
completion of the Project; provided, however, that any acquisition of
such interim capacity shall be funded directly with proceeds received
under related Capacity Sales Agreements.
(b) The Company shall not, and shall not permit any of its
Subsidiaries to enter into any management contract (other than the Construction
Management Agreements, the Facilities Management Agreement and the Marketing
Agreement and other than any other agreement made by the Company and/or a
Subsidiary thereof which is approved by the Administrative Agent) or similar
arrangement whereby its business or operations are managed by any other Person;
[*******].
SECTION 6.6. Restricted Payments. The Company shall not declare or make
any Restricted Payment except:
(a) distributions by the Company in respect of its Capital
Stock which are payable solely in additional Capital Stock of the Company, but
only to the extent such additional Capital Stock is common stock and, if such
Capital Stock in
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respect of which such distribution is made is subject to a Lien in favor of the
Administrative Agent, then only if such additional Capital Stock (x) is subject
to a first priority perfected Lien in favor of the Administrative Agent pursuant
to the Shareholder Pledge Agreement or such other documentation as shall be
reasonably acceptable to the Administrative Agent and (y) is delivered to the
Administrative Agent, together with undated stock powers for each stock
certificate representing such additional Capital Stock, executed in blank;
(b) distributions by the Company in respect of its Capital
Stock from funds available to the Company after the application of clauses
"first" through "eighth" of Section 8.12(b) (so long as no Default or Event of
Default shall have occurred and be continuing or would result therefrom) or with
funds available in the Company's Excess Flow Account;
(c) so long as no Default or Event of Default shall have
occurred and be continuing or would result therefrom, the Company may purchase
or redeem shares of Capital Stock (or options or warrants in respect of such
shares) of the Company held by present or former officers or employees of the
Company or any of its Subsidiaries upon such person's death, disability,
retirement or termination of employment or under any agreement under which such
shares of Capital Stock or related rights were issued, provided that the
aggregate amount of such purchases or redemptions shall not exceed $5,000,000 in
the aggregate; and
(d) payments by the Company under the Construction Management
Agreements, the Marketing Agreements, the Backhaul Agreements, the Facilities
Management Agreement, or any other Project Document to which a Related Party is
a party, to the extent that such payments have been budgeted in the
then-applicable Project Budget or the then-applicable Operating Budget.
SECTION 6.7. Limitations on Issuance of Interests. (a) The Company
shall not issue any additional Capital Stock of the Company or any other
interest in the Company, to any Person, except for (i) additional Capital Stock
which is common stock and which is subject to the perfected Lien of the
Administrative Agent pursuant to the Shareholder Pledge Agreement or such other
documentation as shall be reasonably acceptable to the Administrative Agent and
which is delivered to the Administrative Agent, together with undated stock
powers for each stock certificate representing such additional Capital Stock,
executed in blank and (ii) additional Capital Stock which is common stock (or
options or warrants to purchase the same) issued by the Company under the Stock
Option Plan to persons who are, at the time of such issuance, officers or
employees of the Company and/or its Subsidiaries (except for any of its
Subsidiaries incorporated in France) to the extent permitted under Applicable
Laws; provided that the Company shall not permit the Capital Stock (and the
warrants and options to purchase the same) issued pursuant to this clause (ii)
to represent more than 5% of all common stock of the Company on a fully diluted
basis.
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(b) The Company shall not permit any of its Subsidiaries to
issue any additional Capital Stock or any other interest in any such Subsidiary
to any Person, except to the Company and only if such additional Capital Stock
is (i) subject to the perfected Lien of the Administrative Agent as the case may
be, pursuant to the Company Security Agreements or such other documentation as
shall be reasonably acceptable to the Administrative Agent and (ii) delivered to
the Administrative Agent together with undated stock powers for each stock
certificate representing such additional Capital Stock, executed in blank.
SECTION 6.8. Limitations on Transfers of Interests. The Company shall
not consent to the transfer (by assignment, sale or otherwise) of any Capital
Stock or any other equity interest of the Company, or permit the transfer (by
assignment, sale or otherwise) of any Capital Stock or any other equity interest
of any of its Subsidiaries, except:
(a) subject to the provisions of paragraph (n) of Article VII,
a transfer by the Sponsors of all the Capital Stock of the Company to a newly
created corporation in exchange for Capital Stock of such newly created
corporation, all in connection with a public offering of equity or debt
securities by such newly created corporation; provided that (i) the Company
shall not assume or otherwise be obligated in respect of any obligations
associated with such a transaction, (ii) the terms of such a transaction shall
be reasonably acceptable to the Administrative Agent and (iii) after giving
effect to such transaction, the Administrative Agent shall have a perfected
first priority security interest in all Capital Stock of the Company;
(b) subject to the provisions of paragraph (n) of Article VII,
any transfer of the Capital Stock made subject to the Lien and the terms of the
Shareholder Pledge Agreement, any of the Company Security Agreements or the
Subsidiary Debenture, as applicable, pursuant to which such Capital Stock is
pledged (including, without limitation, the delivery by the transferee to the
Administrative Agent as the case may be, of an Irrevocable Proxy and Power as
contemplated by such applicable agreement);
(c) any transfer of Capital Stock in the Company permitted by
the provisions of the definition of the term "Change in Control"; and
(d) any Capital Stock issued under the Stock Option Plan
(unless any such Capital Stock is required to be pledged to the Administrative
Agent in accordance with the terms hereof or of the other Financing Documents).
SECTION 6.9. Payment of Construction Costs; Operating Budget. (a) The
Company shall not, and shall not permit any of its Subsidiaries to, pay any
amount (other than with respect to amounts received from Permitted Sources) in
respect of the
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construction and installation of the Project other than (x) during the period
prior to the Conversion Date, those costs set forth in the Project Budget (as
amended from time to time) and (y) thereafter, those costs set forth in the then
applicable Operating Budget.
(b) The Company shall not, without the prior written consent
of the Majority Lenders, amend or otherwise modify the Operating Budget for any
Operating Year, provided, however, the Company may (i) with the prior written
consent of the Administrative Agent, amend the budgeted amount of the Operating
Expenses set forth in such Operating Budget so long as, after giving effect to
such amendment, the aggregate Operating Expenses set forth therein do not exceed
110% of the Operating Expenses set forth in the Operating Budget delivered in
accordance with Section 4.4(e) or 5.24 in respect of such Operating Year, and
(ii) amend such Operating Budget in order to apply identified cost savings in a
budget category to cost overruns in another budget category (other than the
capital expenditure budget category) or to a new budget category without
increasing the aggregate amounts payable under the Operating Budget.
SECTION 6.10. Amendment of Project Documents. The Company shall not,
and shall not permit any of its Subsidiaries to, agree or consent to or
otherwise permit any amendment, supplement or other modification or waiver with
respect to, or any consent under, any Project Document to which the Company or
such Subsidiary is a party or with respect to which the consent of the Company
or such Subsidiary is required, other than:
(a) amendments, supplements or other modifications or waivers
with respect to, or consents under, any Capacity Sales Agreement in a manner not
inconsistent with the provisions of Section 6.13;
(b) amendments, supplements or other modifications or waivers
with respect to, or consents under, the Construction Contract which (A) are made
prior to the Conversion Date, provided that the same are (i) entered into by the
Company in the ordinary course of business and are on commercially reasonable
terms, (ii) provide for no additional amounts to be paid by the Company
thereunder (or, if additional amounts are required to be paid by the Company
thereunder, such additional amounts are provided for in the then current Project
Budget or are provided for from Permitted Sources), (iii) do not release the
Contractor from any material liability thereunder unless such release would be
commercially reasonable, and (iv) could not reasonably be expected to have a
Material Adverse Effect or (B) are made on or after the Conversion Date,
provided that the same (i) are entered into by the Company in the ordinary
course of business and are on commercially reasonable terms, (ii) provide for no
additional amounts to be paid by the Company thereunder (or, if additional
amounts are required to be paid by the Company thereunder, such additional
amounts are provided for in the then current Operating Budget or are provided
for from Permitted Sources), (iii) do not otherwise increase the Company's
liability thereunder, (iv) do not release any Contractor from any liability
thereunder (unless such release would be commercially reasonable),
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(v) do not reduce the duration or scope of any warranty or replacement period
thereunder, (vi) do not reduce the scope or availability of any Intellectual
Property thereunder or which is to be conveyed to the Company thereunder, (vii)
do not amend the requirements for any Provisional Acceptance Date without the
prior written consent of the Independent Engineer, and (viii) could not
reasonably be expected to have a Material Adverse Effect;
(c) amendments, supplements or other modifications or waivers
with respect to, or consents under, any Project Document (other than any
Principal Project Document referred to in clause (a) or (b) above and other than
the Construction Contract Guaranty and the Performance Bond) (i) which are
permitted by such Project Document without the consent of the Company or any
Subsidiary of the Company party thereto or (ii) which (A) are entered into by
the Company or any Subsidiary of the Company in the ordinary course of business
and are on commercially reasonable terms, (B) provide for no additional amounts
to be paid by the Company or any Subsidiary of the Company thereunder (or, if
additional amounts are required to be paid by the Company or any Subsidiary of
the Company thereunder, such additional amounts are provided for in the then
current Project Budget or Operating Budget or are provided for from Permitted
Sources), (C) do not release any party thereto (other than the Company or any
Subsidiary of the Company) from any material liability thereunder unless such
release would be commercially reasonable or unless the Company would otherwise
be permitted to terminate such agreement pursuant to Section 6.11 and (D) could
not reasonably be expected to have a Material Adverse Effect; and
(d) (i) immaterial amendments, supplements or other
modifications or immaterial waivers with respect to, or immaterial consents
under, any Project Document and (ii) amendments, supplements or other
modifications to, or consents or waivers under, any Project Document which are
permitted by such Project Document without the consent of the Company.
SECTION 6.11. Termination, Assignment of Project Documents. (a) The
Company shall not terminate, cancel or suspend, or permit the termination,
cancellation or suspension of, any Project Document other than (i) in accordance
with its terms, (ii) as permitted by such Project Document without the consent
of the Company or any Subsidiary of the Company, (iii) as required by Applicable
Laws or (iv) a Project Document, other than the Construction Contract (prior to
the end of the Warranty Period) and the Construction Contract Guaranty (prior to
the end of the Warranty Period), if (A) the Company delivers to the
Administrative Agent at the time of such termination, cancellation or suspension
a certificate of a Responsible Officer of the Company certifying that (1) such
termination, cancellation or suspension is permitted by the terms of such
Project Document, (2) the Company reasonably believes that such Project Document
(or its replacement) is no longer beneficial or useful to the Lenders and to the
Company's business and (3) such termination, cancellation or suspension could
not reasonably be expected to have a Material Adverse Effect, (B) with respect
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to the termination, cancellation or suspension of the Marketing Agreement such
agreement is simultaneously replaced with a new contract (or other arrangement)
on terms and with a party (which party may be the Company itself) reasonably
satisfactory to the Majority Lenders and (C) with respect to the termination,
cancellation or suspension of the Performance Bond or the Facilities Management
Agreement, such agreement is simultaneously replaced with a new contract (or
other arrangement) on terms and with a party reasonably satisfactory to the
Administrative Agent.
(b) The Company shall not agree or consent to or otherwise
permit the assignment of the obligations of any party to any Principal Project
Document (other than a party to a Capacity Purchase Agreement), except pursuant
to the Security Documents and except as permitted without the consent of the
Company by the terms of such Principal Project Document.
SECTION 6.12. Approval of Additional Contracts. Without the prior
written consent of the Majority Lenders, the Company shall not, and shall not
permit any of its Subsidiaries to, enter into any Additional Contract, other
than (a) contracts entered into by the Company in the ordinary course of
business of performing Project Activities to the extent that (i) they are
entered into on commercially reasonable terms, (ii) amounts payable thereunder
are provided for in the then current Project Budget or Operating Budget, from
Capacity Commitments made by customers seeking interim capacity prior to
completion of the Project, provided, however, that any acquisition of such
interim capacity shall be funded directly with proceeds received under related
Capacity Sales Agreements or from Permitted Sources, and (iii) the execution,
delivery and performance thereof could not reasonably be expected to have a
Material Adverse Effect, (b) contracts entered into by the Company in order to
effectuate the provisions of Section 6.15, provided such contracts are
consistent with the terms of Section 6.15 and (c) any replacement Facilities
Management Agreements entered into with the consent of the Administrative Agent
in accordance with Section 6.11(a). At the time any Additional Contract is
entered into the Company will deliver a copy thereof to the Administrative
Agent. If the prior written consent of the Majority Lenders is required for any
Additional Contract, upon such consent and at the request of the Administrative
Agent, the Company shall use its best efforts to obtain and deliver to the
Administrative Agent a consent to assignment with respect to such Additional
Contract, in form and substance reasonably satisfactory to the Administrative
Agent.
SECTION 6.13. Sales of Capacity. The Company shall not, and shall not
permit any of its Subsidiaries to, sell, lease or otherwise dispose of Capacity
or capacity on other telecommunication systems acquired in accordance with the
terms hereof except pursuant to agreements entered into by the Company on
commercially reasonable terms including, without limitation, the provisions set
forth in Exhibit C (as such provisions may be amended, supplemented, restated or
otherwise modified from time to time to the extent permitted under Section 6.10
hereof); provided that, in any event, (a) the relevant agreement shall provide
that all cash consideration payable
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thereunder shall be paid in Dollars to (x) the Pre-Sales Proceeds Account (in
the case of payments made prior to the Conversion Date) and (y) except as
provided in Section 8.2(c), to the Revenue Account (in the case of payments made
on and after the Conversion Date), (b) if the relevant agreement shall provide
for future payments it shall not prohibit the granting of a security interest in
such agreement by the Company to the Administrative Agent for the benefit of the
Secured Parties, (c) if requested by the Administrative Agent, the Company shall
deliver a copy of any such relevant agreement, (d) the relevant agreement may
provide for a cash rebate or return of cash previously paid to the Company by
such purchaser (i) on or after March 31, 2002, to the extent that such cash has
not previously been used to make payments in connection with the Project, (ii)
to the extent that such rebate or return is due and payable no earlier than
March 31, 2003 or (iii) after the Conversion Date, if such agreement (other than
any Capacity Sales Agreement with Sponsors or any other direct holding company
or any Affiliates thereof) does provide for any such rebate or return, a portion
of the Capacity Payments or other payments received in respect of such agreement
in an amount equal to such contingent rebate or return, shall be deposited into
the VAT Account and (e) the relevant agreement may provide for the purchase by
the Company of interim capacity on another system, provided, however, that any
acquisition of such interim capacity shall be funded directly with proceeds
received under related Capacity Sales Agreements; provided, further, the Company
shall not (i) enter into any transaction to dispose of Capacity for non-cash
consideration if, after giving effect to such transaction, the Capacity disposed
of for non-cash consideration during the 12-month period ending on (and
including) the date of such transaction would exceed 10% of the Capacity
disposed of during the same period or (ii) enter into any agreement to dispose
of any Capacity for non-cash consideration at any time a Default or Designated
Event shall have occurred and be continuing (in each case, except for transfers
of Capacity for non-cash consideration in connection with customary mutual
restoration agreements); [*******].
SECTION 6.14. Acceptance of Project. The Company shall not issue any
Certificate of Provisional Acceptance or Certificate of Commercial Acceptance
without the prior written consent of the Independent Engineer, such consent not
to be unreasonably withheld.
SECTION 6.15. Leases. The Company shall not, and shall not permit any
of its Subsidiaries to, enter into any lease or leases as a lessee except for
(a) leases of personal property in the ordinary course of business (to the
extent the obligations thereunder are provided for in the then current Project
Budget or Operating Budget), (b) leases of real property in the ordinary course
of business (to the extent the obligations thereunder are provided for in the
then current Project Budget or Operating Budget), (c) Capital Lease Obligations
for the lease of office equipment and automobiles in the ordinary course of
business of the Company and (d) Permitted Sale Leasebacks by the Company or its
Subsidiaries and (e) leases of interim capacity on other systems;
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provided, however, that any acquisition of such interim capacity shall be funded
directly with proceeds received under related Capacity Sales Agreements.
SECTION 6.16. Change of Office. The Company shall not, and shall not
permit any of its Subsidiaries to, change the location of its chief executive
office or principal place of business or the office where it keeps its records
concerning the Project and all contracts related thereto from that existing on
the date hereof, unless the Company or such Subsidiary, as applicable, shall
have given the Administrative Agent at least thirty (30) days' prior written
notice thereof and all action necessary or advisable in the Administrative
Agent's reasonable opinion to protect and perfect the Liens and security
interests in the Collateral shall have been taken.
SECTION 6.17. Change of Name. The Company shall not, and shall not
permit any of its Subsidiaries to, change its name unless the Company or such
Subsidiary, as applicable, shall have given the Administrative Agent at least
thirty (30) days' prior written notice thereof and all action necessary or
advisable in the Administrative Agent's reasonable opinion to protect and
perfect the Liens and security interests in the Collateral shall have been
taken.
SECTION 6.18. Transactions with Affiliates. The Company shall not, and
shall not permit any of its Subsidiaries to, enter into any agreement with any
Affiliate of the Company except (a) pursuant to any Contractual Obligation of
the Company or a Subsidiary in existence on the Closing Date and set forth on
Schedule 6.18, (b) transactions referred to in Sections 7.1 and 7.6 of the
Shareholders Agreement, (c) transactions in the ordinary course of business
which are on fair and reasonable terms not less favorable than the Company or
such Subsidiary could obtain in an arm's-length transaction with a Person which
is not an Affiliate and (d) transactions among the Company and its Subsidiaries
or among such Subsidiaries.
SECTION 6.19. Sale and Leaseback. The Company shall not, and shall not
permit any of its Subsidiaries to, enter into any arrangement with any Person
providing for the leasing of real or personal property which has been or is to
be sold by it to such Person, other than Permitted Sale Leasebacks by the
Company or a Subsidiary.
SECTION 6.20. Capital Expenditures; Other Purchases of Assets. (a) From
and after the Conversion Date, the Company shall not, and shall not permit any
of its Subsidiaries to, make any expenditure (including, without limitation, the
transfer of Capacity for non-cash consideration) in respect of the purchase of
capital assets in any Operating Year, except for such expenditures which could
not reasonably be expected to adversely affect the Project and (i) which are
included in the Project Budget, (ii) which do not cause the Company and its
Subsidiaries to spend more than $1,000,000 in the aggregate in any Operating
Year in respect of such expenditures or, to the extent such expenditure would
cause the Company and its Subsidiaries to spend more than $1,000,000 in the
aggregate in any Operating Year, which excess is funded solely from
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Permitted Sources or amounts on deposit in the Capacity Upgrades Reserve
Account, provided such amounts on deposit are only used to pay for Capacity
Upgrades, (iii) are paid for with Capacity to the extent the transfer of such
Capacity is in accordance with Section 6.13 or (iv) are approved by the Majority
Lenders in writing (after consultation with the Independent Engineer).
(b) The Company shall not, and shall not permit any of its
Subsidiaries to, purchase or acquire any assets or other property other than (i)
any purchase of assets by the Company in connection with the completion of the
Project (including in connection with Capacity Upgrades), (ii) the purchase of
assets reasonably required in connection with the performance of Project
Activities and (iii) Permitted Investments.
SECTION 6.21. Unrelated Activities; Abandonment. The Company shall not,
and shall not permit any of its Subsidiaries to, engage in any business other
than Project Activities. The Company shall not abandon the diligent operation
and maintenance of the Project.
SECTION 6.22. Set-off. Without the prior written consent of the
Administrative Agent, the Company shall not exercise any right of set-off with
respect to amounts owing to it by the Contractor under the Construction Contract
or amounts owing under the Performance Bond.
SECTION 6.23. Subsidiaries. The Company shall not, and shall not permit
any of its Subsidiaries to, create or otherwise acquire any Subsidiary unless
the Company gives the Administrative Agent notice thereof and unless:
(a) such Subsidiary is a newly created, wholly-owned direct
Subsidiary of the Company;
(b) such Subsidiary shall, if the Administrative Agent (or the
Security Agent, if applicable) shall so request, execute and deliver (i) a
counterpart to the Subsidiary Guarantee Agreement with respect to all
Obligations in form and substance reasonably satisfactory to the Administrative
Agent and/or (ii) a security agreement in substantially the form of the Company
Security Agreements, with such modifications as the Administrative Agent (or the
Security Agent, if applicable) may reasonably request or consent to;
(c) the Company shall pledge to the Administrative Agent (and
the Security Agent, if applicable) for the benefit of the Secured Parties, all
of the outstanding shares of Capital Stock or other ownership interests of such
Subsidiary pursuant to documentation reasonably satisfactory to the
Administrative Agent;
▇▇▇
▇▇▇
(▇) the Administrative Agent shall have received evidence
reasonably satisfactory to it that the Administrative Agent shall have, if
required by the Administrative Agent, a perfected first priority security
interest in the collateral set forth in any such security agreement and/or
pledge agreement;
(e) the creation of such Subsidiary and the performance of its
applicable obligations will not create any material risk that the aggregate tax
liability of the Company and its Subsidiaries for any Operating Year will exceed
105% of the amount budgeted for Taxes in respect of such Operating Year; and
(f) if the Administrative Agent requests, the Administrative
Agent shall have received legal opinions in form and substance reasonably
satisfactory to the Administrative Agent with respect to paragraphs (b) through
(d) of the foregoing.
SECTION 6.24. Concentration of Cash. The Company shall not permit the
aggregate balance in all bank accounts, checking accounts or similar accounts
maintained by the Company and any of its Subsidiaries (including the value of
all Permitted Investments contained therein) to exceed an amount equal to
$3,000,000 (exclusive of all amounts and the value of Permitted Investments
maintained in the Accounts and exclusive of any amounts distributed pursuant to
Article VIII to the Company or its Subsidiaries for the benefit of other
Persons) except that the Company may establish and maintain an account with a
financial institution other than the Administrative Agent (the "COMPANY'S EXCESS
CASH FLOW ACCOUNT") into which funds may be deposited in accordance with Section
8.21(c). Amounts on deposit in any account (other than the Accounts and other
than the Company's Excess Cash Flow Account) shall be used solely to pay costs
in accordance with the then current Project Budget or Operating Budget.
SECTION 6.25. Amendments of Organizational Documents. The Company shall
not, and shall not permit any of its Subsidiaries to, amend, supplement or
otherwise modify, or permit the amendment, modification or supplementation of
any Organizational Documents in a manner which is inconsistent with or violates
the terms of or could reasonably be expected to prevent compliance with any of
the terms of any Financing Document or Project Document or could materially
adversely affect the Lenders or any Collateral.
SECTION 6.26. Immunity. The Company shall not, and shall not permit any
of its Subsidiaries to, in any proceeding in Bermuda, the United States or
elsewhere, in connection with any Financing Document, claim for itself, any of
its assets or the Project, immunity from suit, execution, attachment or other
legal process.
SECTION 6.27. Restrictive Agreements. The Company shall not, and shall
not permit any of its Subsidiaries to, enter into, incur or permit to exist any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon the ability of
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the Company or such Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets to secure the Obligations, provided that the
foregoing shall not apply to restrictions and conditions imposed by law or by
this Agreement.
SECTION 6.28. Cumulative Capacity Sales Revenue. The Company shall not
permit the Cumulative Capacity Sales Revenue including proceeds from the sales
of fiber pairs in the Project for the period from September 30, 1999 through and
including the last day of the calendar month preceding each date set forth
below, to be less than the correlative amount indicated opposite the Quarterly
Date:
Cumulative Capacity
Fiscal Quarter Sales Revenue
------------------- -------------------
Fourth Quarter 2001 $257,000,000
First Quarter 2002 $285,000,000
Second Quarter 2002 $319,000,000
Third Quarter 2002 $352,000,000
Fourth Quarter 2002 $386,000,000
First Quarter 2003 $422,000,000
Second Quarter 2003 $463,000,000
Third Quarter 2003 $503,000,000
Fourth Quarter 2003 $544,000,000
First Quarter 2004 $584,000,000
Second Quarter 2004 $621,000,000
Third Quarter 2004 $658,000,000
Fourth Quarter 2004 $695,000,000
First Quarter 2005 $735,000,000
Second Quarter 2005 $778,000,000
Third Quarter 2005 $821,000,000
Fourth Quarter 2005 $864,000,000
First Quarter 2006 $909,000,000
Second Quarter 2006 $957,000,000
Third Quarter 2006 $1,006,000,000
Fourth Quarter 2006 $1,055,000,000
First Quarter 2007 $1,103,000,000
Notwithstanding anything to the contrary contained in this Agreement, the
failure to comply with this Section at any time shall not constitute a Default
or an Event of Default, but shall result in, until such time as the Company
shall have delivered a certificate to the Administrative Agent in accordance
with Section 5.3(b) demonstrating the Company's compliance with this Section and
Sections 6.29 and 6.30, Excess Cash Flow being applied 100% to the
Administrative Agent for the account of the Lenders
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in accordance with Section 8.12(b); provided, however, that such application to
Term Loans shall be in inverse order of maturity.
SECTION 6.29. Present Value Coverage Ratio. From December 31, 2001 the
Company shall not permit, as of the end of any calendar quarter falling after
the fiscal quarter in which the Conversion Date occurs, the Present Value
Coverage Ratio to be less than 1.32:1.00. Notwithstanding anything to the
contrary contained in this Agreement, the failure to comply with this Section at
any time shall not constitute a Default or an Event of Default, but shall result
in, until such time as the Company shall have delivered a certificate to the
Administrative Agent in accordance with Section 5.3(b) demonstrating the
Company's compliance with this Section and Sections 6.29 and 6.31, Excess Cash
Flow being applied 100% to the Administrative Agent for the account of the
Lenders in accordance with Section 8.12(b) provided, however, that such
application to Term Loans shall be in inverse order of maturity.
SECTION 6.30. Interest Coverage Ratio. The Company shall not permit, as
of the end of any fiscal quarter falling after the fiscal quarter in which the
Conversion Date occurs, the Interest Coverage Ratio to be less than the
correlative ratio indicated:
Fiscal Quarter Interest Coverage Ratio
------------------- -----------------------
Fourth Quarter 2001 2.00:1.00
First Quarter 2002 2.25:1.00
Second Quarter 2002 2.65:1.00
Third Quarter 2002 3.25:1.00
Fourth Quarter 2002 3.50:1.00
First Quarter 2003 3.85:1.00
Second Quarter 2003 4.25:1.00
Third Quarter 2003 4.50:1.00
Fourth Quarter 2003 5.00:1.00
First Quarter 2004 5.50:1.00
Second Quarter 2004 6.00:1.00
Third Quarter 2004 6.50:1.00
Fourth Quarter 2004 7.00:1.00
First Quarter 2005 7.50:1.00
Second Quarter 2005 8.00:1.00
and thereafter
Notwithstanding anything to the contrary contained in this Agreement, the
failure to comply with this Section at any time shall not constitute a Default
or an Event of Default, but shall result in, until such time as the Company
shall have delivered a certificate to the Administrative Agent in accordance
with Section 5.3(b) demonstrating the Company's compliance with this Section and
Sections 6.29 and 6.30, Excess Cash Flow being applied 100% to the
Administrative Agent for the account of the Lenders
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in accordance with Section 8.12(b) provided, however, that such application to
Term Loans shall be in inverse order of maturity.
Further, notwithstanding anything to the contrary in this
Agreement, the failure by Company to comply with any of Sections 6.28, 6.29 or
6.30 at any time shall not constitute a Default or an Event of Default, but
shall result in the following until such time as the Company shall have
delivered a certificate to the Administrative Agent in accordance with Section
5.3(b) demonstrating compliance with Sections 6.28, 6.29 and 6.30:
(i) the availability of the Revolving Credit
Commitments being reduced (for so long as such circumstance persists)
to, in the case of any failure of compliance, (v) in the first year
from the Conversion Date, $20,000,000; (w) in the second year from the
Conversion Date, $15,000,000; (x) in the third year from the Conversion
Date, $10,000,000; (y) in the fourth year from the Conversion Date,
$5,000,000; and (z) thereafter to zero;
(ii) except as provided in clause (iii) below, the
Company shall not be permitted to activate any Capacity acquired by a
Sponsor, whether under a Sponsor Pre-Sale Capacity Commitment (other
than purchases of Capacity by third parties set forth on Schedule
1.1(v) to this Agreement) or otherwise, which shall not already have
been activated; and
(iii) the Company shall only be permitted to sell or
otherwise dispose of Capacity and activate such Capacity with respect
to (y) purchasers of Capacity other than Sponsors and (z) incremental
purchases of Capacity by Sponsors in excess of the Sponsor Pre-Sale
Capacity Commitments; provided, however, that in the case of (z) such
purchases must be made at no less than the then prevailing market rate
for such Capacity.
Provided, however, that in the event that after December 31, 2001, the
amount of the outstanding Loans shall be less than $200,000,000 the Company may
activate any Capacity purchased or otherwise acquired by a Sponsor
notwithstanding any failure of compliance by the Company with any of Sections
6.28, 6.29 or 6.30.
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events shall occur and be continuing (whether
any such event shall be voluntary or involuntary or come about or be effected by
operation of law or pursuant to or in compliance with any judgment, decree or
order of any court or an order, rule or regulation of any administrative or
governmental body):
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(a) the Company shall fail to pay any principal of any Loan
when due; or the Company or any Subsidiary of the Company shall fail to pay any
interest on any Loan or fee or other amount payable hereunder or under any other
Financing Document within three (3) Business Days after any such other amount
becomes due in accordance with the terms hereof or thereof; or
(b) the Company shall fail to perform or observe any of its
covenants set forth in Section 5.9(a) and Article VI (other than Sections 6.28,
6.29 and 6.30); or the Company shall fail to perform or observe any of its
covenants set forth in Section 5.1(a), and the second sentence of Section 5.1
of the Company Security Agreement (U.S.), the Company shall fail to perform or
observe any of its covenants set forth in Sections 5.1(a) of the Company
Security Agreement (England) or any Sponsor shall fail to perform or observe any
of its covenants set forth in the first sentence of Section 5(a), Section 5(b),
of the Shareholder Pledge Agreements to which it is a party; or the Company
shall fail to maintain in effect any of the insurance required to be maintained
in accordance with Section 5.10; or
(c) the Company, any Subsidiary of the Company or any Sponsor
shall fail to perform or observe any of its covenants set forth in this
Agreement or in any other Financing Document to which it is a party (other than
those referred to in paragraphs (a) and (b) above and those set forth in
Sections 6.28, 6.29 and 6.30) and such failure shall continue unremedied or
unwaived for a period of thirty (30) days after receiving written notice
thereof; or
(d) any representation or warranty made or deemed made by the
Company, any Subsidiary of the Company or any Sponsor in this Agreement or in
any other Financing Document or in any certificate, financial statement or other
document delivered by such Person pursuant hereto or thereto, shall prove to
have been false or misleading in any material respect when such representation
or warranty was made or deemed made; or
(e) (i) any Specified Participant shall commence any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, administration (whether
judicial, or otherwise) winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, administrator (whether judicial or otherwise)
conservator or other similar official for it or for all or any substantial part
of its assets, or any Specified Participant shall make a general assignment for
the benefit of its creditors; or (ii) there shall be commenced against any
Specified Participant any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment or (B)
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remains undismissed, undischarged or unbonded for a period of sixty (60) days;
or (iii) there shall be commenced against any Specified Participant any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial part of
its assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending appeal
within sixty (60) days from the entry thereof; or (iv) any Specified Participant
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) any Specified Participant shall generally not, or shall be unable
to, or shall admit in writing its inability to, pay its debts as they become
due; provided, however, the commencement of any proceeding or other action or
event of a nature referred to in clauses (i) through (v) above with respect to
Alcatel or the Contractor shall not constitute a Default or an Event of Default
under this paragraph unless such proceeding, action or event could reasonably be
expected to have a Material Adverse Effect; or
(f) one or more judgments or decrees shall be entered (i)
against the Company or any Subsidiary of the Company involving in the aggregate
a liability (to the extent not covered by insurance) of $5,000,000 or more (or
the equivalent thereof in other currencies), and all such judgments or decrees
shall not have been paid, vacated, discharged, stayed or bonded pending appeal
within sixty (60) days from the entry thereof or (ii) in the form of an
injunction or similar form of relief requiring suspension or abandonment of the
operation of the Project and the failure of the Company to have such injunction
or similar form of relief stayed or discharged within sixty (60) days; or
(g) (i) any Financing Document shall cease, for any reason, to
be in full force and effect or the Company or any other party thereto (other
than a Lender) shall so assert in writing or (ii) the Lien created by any
Security Document shall cease to be enforceable and of the same effect and
priority purported to be created thereby or (iii) any of the Capital Stock of
the Company, other than Capital Stock issued under the Stock Option Plan, shall
not be subject to the Shareholder Pledge Agreement in favor of the
Administrative Agent; or
(h) prior to the end of the Warranty Period, the Construction
Contract Guaranty or any analogous or similar guaranty delivered under or
pursuant to Backhaul Agreements shall cease, for any reason, to be in full force
and effect, or Alcatel (or a contractor or other counterparty to any Backhaul
Agreement) shall so assert in writing and such assertion shall not be withdrawn,
revoked or remedied within 30 days thereof; provided, however, that in the case
of such analogous or similar guaranty, no such default shall occur unless a
Material Adverse Effect shall have arisen as a result of such cessation; or
(i) at any time prior to the last day of the Warranty Period,
the invalidity, termination, dishonor or revocation of the Performance Bond
(except
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termination as a result of a final drawing thereunder); or the failure at any
time of the Performance Bond to be in a stated amount equal to (i) at any time
prior to the Provisional Acceptance Date (Phase 2), at least 10% of then Total
Contract Price, or (ii) at any time on or after the Provisional Acceptance Date
(Phase 2) until the last day of the Warranty Period, at least 5% of the Total
Contract Price; or
(j) any Project Document shall, prior to its stated
termination date, at any time and for any reason cease to be valid and binding
and in full force and effect, or any material provision of any Project Document
shall be declared to be null and void or unenforceable by a court or arbitrator,
or the validity or enforceability of any provision of any Project Document is
contested through appropriate proceedings by any party thereto or by any
Governmental Authority seeking to establish the invalidity or unenforceability
thereof which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect; provided that such occurrence shall not constitute an
Event of Default under this paragraph (i) if it relates to a Capacity Sales
Agreement (other than a Capacity Sales Agreement with a Sponsor) or an
Additional Contract or (ii) if it relates to any other Principal Project
Document (other than prior to the end of the Warranty Period, the Construction
Contract and the Construction Contract Guaranties) if the Company shall obtain a
replacement agreement or arrangement reasonably satisfactory in form and
substance to the Majority Lenders (or, with respect to the Construction
Management Agreements, the Performance Bond and the Facilities Management
Agreements, to the Administrative Agent) with a Person satisfactory to the
Majority Lenders (or, with respect to the Construction Management Agreements,
the Performance Bond and the Facilities Management Agreements, to the
Administrative Agent) within one hundred twenty (120) days after such
invalidity, contest, denial or declaration shall have occurred or (iii) if such
occurrence could not reasonably be expected to have a Material Adverse Effect;
or
(k) any party to any Project Document shall be in material
default thereunder and such default shall continue unremedied for thirty (30)
consecutive days; provided that such occurrence shall not constitute an Event of
Default under this paragraph if it relates to (i) a Capacity Sales Agreement or
an Additional Contract (ii) the Construction Contract, if the Construction
Contract Guaranty remains in full force and effect and Alcatel is actually
performing its obligations thereunder in a timely fashion, (iii) the
Construction Management Agreements, if the defaulting party can be replaced and
is replaced within one hundred twenty (120) days with a Person satisfactory to
the Majority Lenders, or if it is not feasible to replace such party, if the
default by such party could not reasonably be expected to have a Material
Adverse Effect, (iv) the Facilities Management Agreements so long as such
default could not reasonably be expected to have a material adverse effect on
the Company's ability to maintain the Project or perform its obligations under
the Financing Documents and the Principal Project Documents or (v) any other
Principal Project Document (other than those referred to in clauses (i) through
(iv) above and other than the Construction Contract Guaranty) if the Company
shall obtain a replacement agreement or
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arrangement reasonably satisfactory in form and substance to the Majority
Lenders (or, with respect to the Performance Bond, to the Administrative Agent)
with a Person satisfactory to the Majority Lenders (or, with respect to the
Performance Bond, to the Administrative Agent) within one hundred twenty (120)
days after such event shall have occurred or (vi) any Project Document other
than a Principal Project Document if such event could not reasonably be expected
to have a Material Adverse Effect; or
(l) any Governmental Action, Right-of-Way, consent or other
approval which shall at the time be necessary for the performance of any Project
Activity in the manner contemplated under the Financing Documents and the
Project Documents shall be revoked, terminated, withdrawn, modified, suspended
or withheld or shall cease to be in full force or effect, or any proceeding
shall be commenced by or before any Governmental Authority for the purpose of so
revoking, terminating, withdrawing, modifying, suspending or withholding any
such Governmental Action, Right-of-Way, consent or other approval and such
proceeding is not dismissed within ninety (90) days of the commencement thereof,
and in either case such revocation, termination, withdrawal, modification,
suspension, withholding or cessation or such proceeding has or could reasonably
be expected to have a Material Adverse Effect; or
(m) operation of the Project shall be suspended for a period
of longer than 3 months or the Company shall abandon the operation of the
Project; or
(n) a Change in Control shall occur; or
(o) any Event of Loss shall occur and (A) unless the affected
portion of the Project is being repaired, replaced or restored in accordance
with Section 5.20, the Company shall have failed to deliver to the
Administrative Agent an EOL Compliance Certificate in accordance with the terms
of Section 5.20 (or the Present Value Coverage Ratio set forth in the EOL
Compliance Certificate so delivered to the Administrative Agent shall be less
than 1.20:1.00) or (B) if the affected portion of the Project is being repaired,
replaced or restored in accordance with Section 5.20, the Company shall have
failed to comply with the provisions of such Section within the time period
specified therein; or
(p) an ERISA Event shall have occurred that, in the opinion of
the Majority Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to have a Material Adverse Effect; or
(q) the Company shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any Material
Indebtedness within any applicable grace period, when and as the same shall
become due and payable; or
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(r) any event or condition occurs that results in any Material
Indebtedness of the Company becoming due prior to its scheduled maturity or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become due, or
requires the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity;
(s) the invalidity, termination or revocation of the Bye-Laws
of the Company which (i) could be expected to impair the value of the Collateral
in any manner, (ii) is inconsistent with or violates the terms of or could
prevent compliance with any of the terms of any Transaction Document or (iii)
could adversely affect the Lenders in any material way; or
(t) if:
(i) the Conversion Date shall not occur on or before
December 31, 2001;
(ii) the Cash Equity Contribution Amount shall not be
deposited in the Equity Proceeds Account (or into a cash collateral
account established with the Administrative Agent) on or before the
earlier to occur of (x) the first date that both (A) Capacity
Commitments in an aggregate amount of not less than $300,000,000 and
(B) the available Construction Loan Commitments have been fully paid or
drawn (as the case may be) and (y) October 31, 2000;
(iii) the Sponsor Pre-Sale Capacity Commitments are
not paid in full on or before December 31, 2001;
(iv) the Company fails to achieve an applicable
Acceptance prior to the Required Applicable Acceptance Date; or
(v) the Requisite Qualifying Pre-Sales shall not have
been obtained (whether by way of Capacity Commitments or actual cash
proceeds) on or prior to the receipt of any expiry or termination
notice with respect to an Equity Contribution Letter of Credit (and
such letter of credit shall not have been continued or replaced in
accordance with its terms);
THEN, and in every such event (other than an event with respect to the Company
described in clause (e) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Majority Lenders shall, by notice to the Company, take either or both of the
following actions, at the same or different times (i) terminate the Commitments,
and thereupon the Commitments shall terminate immediately, and (ii) declare the
Loans then outstanding to be due and
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payable in whole (or in part, in which case any principal not so declared to be
due and payable may thereafter be declared to be due and payable), and thereupon
the principal of the Loans so declared to be due and payable, together with
accrued interest thereon and all fees and other obligations of the Company
accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company; and in case of any event with respect to the
Company described in clause (e) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Company accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company.
ARTICLE VIII
ACCOUNTS
SECTION 8.1. Creation of Accounts. (a) The Administrative Agent hereby
establishes the following 16 special, segregated and irrevocable cash collateral
accounts in the name of the Administrative Agent and for the benefit of the
Secured Parties, which accounts shall be maintained by the Administrative Agent
at all times until the termination hereof and the payment in full of all
Obligations:
(1) Construction Account;
(2) Pre-Sale Proceeds Account;
(3) Debt Proceeds Account;
(4) Equity Proceeds Account;
(5) Revenue Account;
(6) Debt Reserve Account;
(7) Operating Reserve Account;
(8) Current Account;
(9) Maintenance Reserve Account;
(10) Capacity Upgrades Reserve Account;
(11) Insurance Proceeds Account;
(12) Special Payment Account;
(13) Sales and Issuances Proceeds Account;
(14) Excess Revenue Account;
(15) Permitted Sources Account; and
(16) VAT Account
(b) All moneys, investments and securities at any time on
deposit in any of the Accounts shall be under the sole dominion and control of
the Administrative Agent and shall constitute collateral in accordance with the
terms of the Security Documents to be held in the custody of the Administrative
Agent for the purposes and on the terms set forth in the Security Documents and
this Article VIII.
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SECTION 8.2. Required Deposits into the Accounts.
(a) Construction Account. The Company shall deposit into the
Construction Account the amounts required to be deposited pursuant to this
Article VIII.
(b) Pre-Sale Proceeds Account. The Company shall deposit into
the Pre-Sale Proceeds Account all Pre-Sale Proceeds.
(c) Debt Proceeds Account. The Company shall deposit into the
Debt Proceeds Account all Construction Loan Borrowings, pursuant to Section 2.4.
(d) Equity Proceeds Account. The Company shall deposit into a
cash collateral account established with the Administrative Agent the Cash
Equity Contribution Amount until such time as $200,000,000 of Requisite
Qualifying Pre-Sales shall have been obtained (whether by way of Capacity
Commitments or actual cash proceeds), at which time upon certification (together
with details thereof) by a Responsible Officer of the Company with respect
thereto to the reasonable satisfaction of the Administrative Agent, such amount
may, as applicable, either be (i) directly deposited in the Equity Proceeds
Account or (ii) transferred thereto.
(e) Revenue Account. Subject to Sections 8.2(a) and 8.2(b),
the Company shall deposit into the Revenue Account all Project Revenues of the
Company and its Subsidiaries received after the Conversion Date.
(f) Debt Reserve Account. The Administrative Agent, acting in
accordance with Section 8.8, shall on the Conversion Date deposit into the Debt
Reserve Account (to the extent that cash is available for such purpose) the Debt
Reserve Required Balance and thereafter the Administrative Agent shall deposit
amounts into the Debt Reserve Account from amounts on deposit in the Revenue
Account as specified in Section 8.12(b).
(g) Operating Reserve Account. From and after the Conversion
Date, the Administrative Agent, acting in accordance with Section 8.8, shall
deposit into the Operating Reserve Account (to the extent that cash is available
for such purpose) the amount set forth in the Schedule of Sources and Uses to be
deposited into the Operating Reserve Account, provided such amount shall in no
event exceed the Operating Reserve Maximum Balance. The Administrative Agent
shall deposit amounts into the Operating Reserve Account from amounts on deposit
in the Pre-Sale Proceeds Account as specified in Section 8.8 and from amounts on
deposit in the Revenue Account as specified in Section 8.12(b).
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(h) Current Account. The Administrative Agent shall deposit
into the Current Account (i) Additional Borrowing Amounts pursuant to Section
4.2(b)(ii) and (ii) amounts on deposit in the Revenue Account as specified in
Section 8.12(a).
(i) Maintenance Reserve Account. The Administrative Agent
shall deposit amounts into the Maintenance Reserve Account from amounts on
deposit in the Pre-Sale Account as specified in Section 8.8 or from amounts on
deposit in the Revenue Account as specified in Section 8.12(b).
(j) VAT Account. The Administrative Agent shall deposit
amounts into the VAT Account from amounts on deposit in the Revenue Account as
specified in Section 8.12(a)(i) and from amounts on deposit in the Pre-Sale
Proceeds Account as specified in Section 8.8(a).
(k) Insurance Proceeds Account. The Company, its Subsidiaries
and the Administrative Agent shall deposit into the Insurance Proceeds Account
all Casualty Proceeds.
(l) Special Payment Account. The Company, its Subsidiaries and
the Administrative Agent shall deposit into the Special Payment Account all
Special Payments.
(m) Sales and Issuances Proceeds Account. The Company and its
Subsidiaries shall deposit into the Sales and Issuances Proceeds Account all Net
Cash Proceeds received (except to the extent required pursuant to Sections
2.9(c)(i) and 2.9(c)(ii)).
(n) Excess Revenue Account. The Company and its Subsidiaries
shall deposit amounts into the Excess Revenue Account from amounts on deposit in
the Revenue Account or the Sales and Issuances Proceeds Account as specified in
Section 8.12(b) or Section 8.17(a), as applicable.
(o) Permitted Sources Account. The Company shall deposit
amounts into the Permitted Sources Account with funds contemplated by clauses
(d) and (e) of the definition of "Permitted Sources" to the extent necessary to
cause such funds to constitute a "Permitted Source."
(p) Capacity Upgrades Reserve Account. The Administrative
Agent shall deposit amounts into the Capacity Upgrades Reserve Account from
amounts on deposit in the Revenue Account as specified in Section 8.8. or
8.12(b).
SECTION 8.3. Deposits Held as Cash Collateral. (a) The Administrative
Agent agrees to accept all revenues, cash, payments, insurance and casualty
proceeds, other amounts and Permitted Investments to be delivered to or held by
the
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Administrative Agent pursuant to the terms hereof or of the Security Documents.
The Administrative Agent shall hold and safeguard the Accounts (and the
revenues, cash, payments, insurance and casualty proceeds, instruments,
securities and other amounts on deposit therein) during the term hereof and
shall treat the revenues, cash, payments, insurance and casualty proceeds,
instruments, securities and other amounts in the Accounts as funds, instruments,
securities and other properties pledged by the Company to the Administrative
Agent as collateral securing the Obligations in accordance with the provisions
hereof and of the Security Documents.
(b) All moneys, cash equivalents, instruments, investments and
securities at any time on deposit in the Accounts shall constitute security for
the payment and performance by the Company of the Obligations and shall at all
times be subject to the sole dominion and control of the Administrative Agent
and shall be held in the custody of the Administrative Agent in trust for the
purposes of, and on the terms set forth in, this Agreement.
(c) Neither the Company, any Subsidiary of the Company nor any
Sponsor shall have any rights or powers with respect to any amounts in the
Accounts or any part thereof, except the right to have such amounts applied in
accordance with this Article VIII.
SECTION 8.4. Source of Payments; Deposits Irrevocable. (a) The Company
shall use reasonable efforts to ensure that all amounts delivered to the
Administrative Agent shall be accompanied by information in reasonable detail
specifying the source of the amounts and the Account into which such amounts are
to be deposited. If the Administrative Agent shall be unable to determine the
source of any payments received or the Account or Accounts into which such
payments are to be deposited, the Administrative Agent shall notify the Company
and hold such amounts in the Revenue Account (and shall not be applied in
accordance with Section 8.12) pending instructions from the Company which shall
be approved by the Administrative Agent in its reasonable discretion as to how
to apply such amounts.
(b) Any deposit made into any Account hereunder shall, absent
manifest error, be irrevocable and the amount of such deposit and any instrument
or security held in such Account and all interest thereon shall be held in trust
by the Administrative Agent and applied solely as provided in this Article VIII.
SECTION 8.5. Books of Account; Statements. The Administrative Agent
shall maintain books of account on a cash basis and record therein all deposits
into and transfers to and from the Accounts and all investment transactions
effected by the Administrative Agent pursuant to Section 8.27 and any such
recordation shall constitute prima facie evidence of the information recorded.
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SECTION 8.6. Location of the Accounts. The Accounts shall be maintained
by the Administrative Agent at its principal office located at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, and shall not, without the prior written consent of the
Administrative Agent, be moved to any different location.
SECTION 8.7. Receipt by the Company. The Company agrees that if any
payments or other amounts are received directly by it, it shall deliver such
amounts in the exact form received (but with the Company's endorsement if
necessary) to the Administrative Agent for deposit into the applicable Account
not later than the first Business Day after the Company's receipt. Until so
deposited, all such amounts shall be held in trust by the Company for the
Administrative Agent and the other Secured Parties as additional collateral
security for the Obligations and such amounts shall not be commingled with any
other funds or property of the Company.
SECTION 8.8. Pre-Sale Proceeds Account. (a) Prior to the Conversion
Date the Administrative Agent shall on each Borrowing Date and on each other
date on which funds are required to be transferred to the Construction Account
in accordance with the terms of Section 8.9, distribute, from the cash available
in the Pre-Sale Proceeds Account, the amounts specified in the Borrowing Notice
to the Construction Account or the VAT Account, as applicable.
(b) On the Conversion Date, the Administrative Agent shall
distribute the cash available in the Pre-Sale Proceeds Account in the following
order of priority:
first, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest on the Revolving Credit
Loans, if any and to the prepayment of the unpaid principal of the
Revolving Credit Loans, if any;
second, to the Maintenance Reserve Account in an amount equal
to the difference between (a) the Maintenance Reserve Required Balance
and (b) the balance then in the Maintenance Reserve Account;
third, to the Debt Reserve Account in an amount equal to the
difference between (a) the Debt Reserve Required Balance and (b) the
balance then in the Debt Reserve Account;
fourth, to the Capacity Upgrades Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Capacity Upgrades Reserve Required Balance as of such date (as set
forth in a certificate of the Company delivered pursuant to Section
5.2(c) or, if the Company shall have not delivered such a certificate
to the Administrative Agent, as set forth by the Administrative Agent);
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fifth, at the election of the Company, to the Operating
Reserve Account, in an amount equal to the difference between (a) the
Operating Reserve Maximum Balance and (b) the balance then on deposit
in the Operating Reserve Account; provided in no event shall the
balance therein exceed the Operating Reserve Maximum Balance; and
sixth, to the repayment of Construction Loans in accordance
with Section 8.9(b).
(c) Notwithstanding (b) above, any cash available in the
Pre-Sale Proceeds Account on the Conversion Date which is attributable to
Sponsor Pre-Sale Capacity Commitments and Requisite Qualifying Pre-Sales shall
be applied, to the full extent thereof, to the prepayment of outstanding
Construction Loans immediately before any conversion to Term Loans, including
all accrued and unpaid interest thereon.
SECTION 8.9. Construction Account. (a) The Administrative Agent shall,
upon receipt by it of a Borrowing Notice with attached payment instructions or a
certificate of the Company setting forth the costs due and payable and to be
paid from the Construction Account, distribute, from the cash available in the
Construction Account, to the Company for the benefit of the Persons entitled
thereto, all amounts then due and owing as set forth in such certificate. In
order to fund the payment of such costs, the Administrative Agent shall transfer
the requisite funds into the Construction Account from the following sources (in
the indicated priority):
first, from the Pre-Sale Proceeds Account, all funds on
deposit therein (or such lesser amount as may be required to cover such
costs);
second, to the extent such costs are not fully covered by the
amounts transferred from the Pre-Sale Proceeds Account, from the Debt
Proceeds Account, all funds on deposit therein (or such lesser amount
as may be required to cover such costs); and
third, to the extent such costs are not fully covered by the
amounts transferred from the Pre-Sale Proceeds Account and the Debt
Proceeds Account and provided that the Company shall have obtained
(whether by way of Capacity Commitments or actual cash proceeds) not
less than $200,000,000, in Requisite Qualifying Pre-Sales, from the
Equity Proceeds Account, all funds on deposit therein (or such lesser
amount as may be required to cover such costs).
(b) On the Conversion Date, the Administrative Agent shall,
upon receipt by it of a certificate of the Company stating that all costs to be
paid from the Construction Account have been paid or are no longer payable,
distribute, from the cash available in the Construction Account, the amounts set
forth in such certificate in the following order of priority:
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first, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest on the Construction Loans or
the Term Loans, as applicable;
second, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest on the Revolving Credit
Loans, if any;
third, to the Administrative Agent, to be applied to the
prepayment of the unpaid principal of the Revolving Credit Loans, if
any;
fourth, to the Administrative Agent, to be applied to the
prepayment of the unpaid principal of the Construction Loans or the
Term Loans, as applicable;
fifth, to the Administrative Agent, to be applied to the cash
collateralization of the unused Revolving Credit Commitments, on terms
and pursuant to documentation reasonably satisfactory to the
Administrative Agent;
sixth, to the Administrative Agent, to be applied to the
payment of all other Obligations; and
seventh, the remaining balance, if any, shall be transferred
to the Revenue Account.
SECTION 8.10. Debt Proceeds Account. The Administrative Agent shall
upon receipt in the Debt Proceeds Account of the proceeds of Loans distribute
such proceeds to the Construction Account.
SECTION 8.11. Equity Proceeds Account. (a) The Administrative Agent
shall, upon receipt by it of a certificate of the Company setting forth the
costs due and payable and to be paid from the Equity Proceeds Account,
distribute, from the cash available in the Equity Proceeds Account, to the
Construction Account, all amounts then due and owing as set forth in such
certificate.
(b) On the Conversion Date, the Administrative Agent shall,
upon receipt by it of a certificate of the Company stating that all costs to be
paid from the Equity Proceeds Account have been paid or are no longer payable,
apply the full amount of cash available in the Equity Proceeds Account to the
prepayment of outstanding Term Loans, including all accrued and unpaid interest
thereon.
(c) Notwithstanding anything to the contrary in subsections
8.11(a) and (b) hereof, Equity Withdrawals from the Equity Proceeds Account may
only be made after satisfaction of the conditions precedent set forth in Section
4.5.
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SECTION 8.12. Revenue Account.
After the Conversion Date:
(a) Operating Expenses and Capital Expenditures; Debt Service.
(i) On or before the fifth Business Day prior to the
end of each month (or if such day is not a Business Day, the
immediately preceding Business Day), the Company shall deliver to the
Administrative Agent an Expense Certificate in the form of Exhibit J
requesting (x) distributions to pay Operating Expenses and capital
expenditures from the Revenue Account, the amounts of which
distributions shall, unless consented to in writing by the Majority
Lenders, conform to the then current Operating Budget of the Company
(as modified pursuant to Section 6.9) and (y) distributions to pay
income taxes from the Revenue Account. On the last day of each month
or, if such day is not a Business Day, the immediately preceding
Business Day (each such date, an "OPERATING EXPENSE TRANSFER DATE"),
the Administrative Agent shall distribute, from the cash available in
the Revenue Account, first, with respect to any Project Revenues which
have been received and are subject to value added tax, sales tax or
other similar tax or potential rebate or other similar return (to the
extent permitted hereunder), that portion of such Project Revenues
directly to the VAT Account and second, (A) to the Persons entitled
thereto, all Operating Expenses and capital expenditures or income
taxes of the Company or any Subsidiary then due and owing in item (1)
of such Expense Certificate, and (B) to the Current Account, the
amounts identified as Operating Expenses and capital expenditures or
income taxes of the Company or any Subsidiary expected to be due and
owing prior to the next Operating Expense Transfer Date in item (2) of
such Expense Certificate.
(ii) The Company shall be permitted to deliver a
certificate to the Administrative Agent on any other day of the month
setting forth the fees, interest and other obligations due and owing
under this Agreement or any other Financing Document and the
Administrative Agent shall distribute from the cash available in the
Revenue Account the amount of such fees, interest or other obligations
directly to the Persons entitled thereto.
(b) Quarterly Transfers. On each Principal Payment Date, the
Administrative Agent shall distribute from the cash available in the Revenue
Account (after making any distributions required by paragraph (a) above) the
following amounts in the following order of priority:
first, for the account of the Term Loan Lenders, the amount,
if any, equal to the scheduled principal payments with respect to the
Term Loans set forth in Schedule 1.1(iii) and all accrued and unpaid
interest thereon which the
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Administrative Agent certifies to the Company to be due and payable on
such date.
second, for the account of the Revolving Credit Lenders, the
amount equal to all accrued and unpaid interest on the Revolving Credit
Loans, if any, which the Administrative Agent certifies to the Company
to be due and payable on such date;
third, to be applied to the prepayment of all of the unpaid
principal of the Revolving Credit Loans;
fourth, to the Debt Reserve Account, an amount sufficient to
cause the amounts on deposit therein to equal the Debt Reserve Required
Balance as of such date (as set forth in the certificate of the Company
delivered pursuant to Section 5.3(c) or, if the Company shall not have
delivered such a certificate to the Administrative Agent, as set forth
by the Administrative Agent);
fifth, to the Maintenance Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Maintenance Reserve Required Balance as of such date (as set forth in
the certificate of the Company delivered pursuant to Section 5.3(c) or,
if the Company shall not have delivered such a certificate to the
Administrative Agent, as set forth by the Administrative Agent);
sixth, (i) to the Capacity Upgrades Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Capacity Upgrades Reserve Required Balance as of such date (as set
forth in a certificate of the Company delivered pursuant to Section
5.3(c) or, if the Company shall have not delivered such a certificate
to the Administrative Agent, as set forth by the Administrative Agent);
seventh, (i) upon the occurrence and during the continuation
of a Designated Event, to the Operating Reserve Account, an amount
sufficient to cause the amounts on deposit therein to equal the
Operating Reserve Maximum Balance or (ii) upon the written request of
the Company, to the Operating Reserve Account, an amount so requested
so long as the balance therein (after giving effect to the requested
transfer) will not exceed the Operating Reserve Maximum Balance;
eighth, to the Administrative Agent, for the account of the
Term Loan Lenders, an amount equal to 75% of the remaining cash
available in the Revenue Account (which amount shall be increased to
100% of the remaining cash available in the Revenue Account during the
continuance of a Designated Event), to be applied to the prepayment of
the Term Loans (and, after the
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payment in full of the Term Loans, to be applied to the cash
collateralization of the Revolving Credit Commitments, on terms and
pursuant to documentation reasonably satisfactory to the Administrative
Agent); and
ninth, so long as no Default or Event of Default shall have
occurred and be continuing, the remainder, if any, to be applied to
such purposes (including the making of equity dividends or distribution
to the Excess Revenue Account) as the Company may direct and which do
not violate the terms hereof and of the other Financing Documents.
SECTION 8.13. Debt Reserve Account. On and from the Conversion Date if,
as of any date on which the payment of interest on or principal of the Loans
becomes due and payable as certified by the Company to the Administrative Agent,
the cash available in the Revenue Account and the Excess Revenue Account is
insufficient to make such payment obligations on such date in accordance with
Sections 8.12 and 8.20, the Administrative Agent shall transfer to the
Administrative Agent, for the benefit of the Lenders an amount (to the extent
cash is available in the Debt Reserve Account) to remedy any such insufficiency.
Upon the occurrence and during the continuance of a Default or an Event of
Default, funds in the Debt Reserve Account may be utilized to pay interest on
and principal of the Loans.
SECTION 8.14. Operating Reserve Account. If, as of any Operating
Expense Transfer Date, the cash available in the Revenue Account and the Excess
Revenue Account is less than the Operating Expenses set forth in the Expense
Certificate (or other certificate) setting forth such Operating Expenses to be
paid on such date, the Administrative Agent shall transfer to the Person(s)
entitled thereto in accordance with Section 8.12(a) (to the extent cash is
available in the Operating Reserve Account) the amount of any deficiency in the
payment of the Operating Expenses set forth in such certificate. Upon the
occurrence and during the continuance of a Default or an Event of Default, funds
in the Operating Reserve Account may be utilized to pay interest on and
principal of the Loans.
SECTION 8.15. Current Account. (a) Prior to the Conversion Date, the
Additional Borrowing Amounts shall be deposited into the Current Account. The
Administrative Agent shall pay, from and to the extent of cash available in the
Current Account and as set forth in a certificate of the Company delivered to
the Administrative Agent, to the Company for the benefit of the Persons entitled
thereto, amounts requested by the Company for the payment of Project Costs.
(b) The Administrative Agent shall pay, from and to the extent
of cash available in the Current Account and as set forth in a certificate of
the Company delivered to the Administrative Agent, directly to the Company for
the benefit of the Persons entitled thereto, all other Operating Expenses
previously identified in the most recently delivered Expense Certificate which
are then due and owing.
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SECTION 8.16. Maintenance Reserve Account. If, as of any Operating
Expense Transfer Date, the cash available in the Revenue Account, the Excess
Revenue Account and, if required, the Operating Reserve Account, is less than
the Operating Expenses set forth in the Expense Certificate (or other
certificate) setting forth such Operating Expenses to be paid through the next
Operating Expense Date, the Administrative Agent shall transfer to the Person(s)
entitled thereto in accordance with Section 8.12(a) (to the extent cash is
available in the Maintenance Reserve Account) the amount of any deficiency in
the payment of the Operating Expenses set forth in such certificate. Upon the
occurrence and during the continuance of a Default or an Event of Default, funds
in the Maintenance Reserve Account may be utilized to pay interest on and
principal of the Loans.
SECTION 8.17. Insurance Proceeds Account. (a) All cash, cash
equivalents, instruments, investments and securities at any time on deposit in
the Insurance Proceeds Account, including all interest or other income earned
with respect thereto, are herein called the "CASUALTY PROCEEDS DEPOSITS".
(b) The Casualty Proceeds Deposits shall be accumulated in the
Insurance Proceeds Account and held therein until paid to or upon the order of
the Company as provided in paragraph (c) of this Section, or used by the
Administrative Agent as provided in paragraph (d) of this Section, or returned
to the Company as provided in Section 8.30.
(c) Subject to the provisions of paragraph (d) of this
Section, Casualty Proceeds Deposits shall be paid over to or upon the order of
the Company to reimburse it for, or to pay, the cost of repairing, rebuilding or
otherwise replacing the damaged or destroyed or lost or condemned property in
respect of which such moneys were received, upon the receipt by the
Administrative Agent of a certificate of the Company (i) setting forth in
reasonable detail the work done or proposed to be done and materials purchased
or to be purchased by way of the renewal, repair, rebuilding or other
replacement of the damaged or destroyed or lost or condemned property and (ii)
stating the specific amount requested to be paid over to or upon the order of
the Company (or such other Person) or that such amount is requested to reimburse
the Company, as the case may be, for, or to pay, costs actually incurred to
repair, rebuild or replace property and that such amount, together with amounts
remaining in the Insurance Proceeds Account for such purpose and other funds of
the Company available for such purpose, are sufficient to pay in full the costs
of such renewal, repair, rebuilding or other replacement. In the event that any
amounts remain in the Insurance Proceeds Account after application thereof in
accordance with this paragraph, the Administrative Agent shall apply such
Casualty Proceeds Deposits to the payment of the Obligations in accordance with
Section 2.9(d).
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(d) If the Company shall at any time notify the Administrative
Agent that an Event of Loss has occurred, then, unless the affected portion of
the Project is being repaired, replaced, restored or re-built in accordance with
Section 5.20(b), the Administrative Agent shall, on the third Business Day
following the date on which the Casualty Proceeds with respect to such Event of
Loss are deposited to the Insurance Proceeds Account, withdraw the Casualty
Proceeds Deposits relating thereto from the Insurance Proceeds Account and apply
them to the payment of the Obligations in accordance with Section 2.9(d). If the
Project is being repaired, replaced or restored or re-built in accordance with
Section 5.20(b), the provisions of paragraph (c) above shall apply.
SECTION 8.18. Special Payment Account. All Special Payments deposited
in the Special Payment Account shall, except to the extent otherwise provided
pursuant to Sections 2.9(f) and 5.20(b), be applied by the Administrative Agent
for the prepayment of principal of the Loans, together with accrued interest
thereon (and, thereafter, to the cash collateralization of the Revolving Credit
Commitments on terms and pursuant to documentation reasonably satisfactory to
the Administrative Agent).
SECTION 8.19. VAT Account. (a) Upon the delivery by the Company of a
certificate to the Administrative Agent that amounts previously distributed into
the VAT Account in respect of payments of interim capacity, a potential rebate
or other amounts payable to relevant government authorities in respect of value
added taxes, sales taxes or other similar taxes are now due and payable, the
Administrative Agent shall distribute, from the cash available in the VAT
Account, directly to the Company for the benefit of the Persons entitled
thereto, all other amounts then due and owing identified in such certificate.
(b) Upon the delivery by the Company of a certificate to the
Administrative Agent that amounts previously distributed into the VAT Account in
respect of a potential rebate cease to be subject to such rebate, the
Administrative Agent shall distribute, from the cash available in the VAT
Account, such amounts to the Revenue Account.
SECTION 8.20. Sales and Issuances Proceeds Account. Amounts on deposit
in the Sales and Issuances Proceeds Account shall be applied as follows:
(a) if such amounts are Net Cash Proceeds of any new issuance
after the Closing Date of Capital Stock of the Company, to the extent such Net
Cash Proceeds are not otherwise invested as permitted pursuant to Section
2.9(c)(i), after depositing the specified portion to the Capacity Upgrades
Reserve Account, the remainder of such Net Cash Sales Proceeds on deposit in the
Sales and Issuance Proceeds Account shall be distributed, 50% to the
Administrative Agent for the prepayment of the Loans in accordance with Section
2.9(c)(i) and, so long as no Default or Event of Default shall have occurred and
be continuing, 50% to the Company, to be used in such manner
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(including equity dividends or distribution to the Company's Excess Cash Flow
Account) as the Company shall determine in accordance with the terms hereof;
(b) if such amounts are Net Cash Proceeds in respect of any
sale, transfer or other disposition of any asset of the Company or any
Subsidiary (other than sales, transfers or dispositions described in clause (a)
of Section 6.4 and dispositions resulting in aggregate Net Cash Proceeds not
exceeding $1,000,000 during any fiscal year of the Company), (i) an amount equal
to the portion thereof being held to be used to replace such asset disposed of
with a similar asset of at least substantially the same value, utility and
useful life (which shall be specified in a certificate of the Company delivered
to the Administrative Agent when such Net Cash Proceeds are deposited) shall be
held and applied to the payment of the relevant expenses upon receipt by the
Administrative Agent of a certificate of the Company specifying the Person(s) to
whom such expenses are due and owing, and (ii) if any such Net Cash Proceeds are
not expended in accordance with clause (i) above within three months of their
receipt into the Sales and Issuances Proceeds Account, such Net Cash Proceeds
shall be applied to the prepayment of the Loans in accordance with Section
2.9(c)(iii); and
(c) if such amounts are Net Cash Proceeds of a Permitted Sale
Leaseback Transaction, such amount shall be applied to the prepayment of the
Loans in accordance with Section 2.9(e).
SECTION 8.21. Excess Revenue Account. (a) If, as of any Operating
Expense Transfer Date, the cash available in the Revenue Account is less than
the Operating Expenses set forth in the Expense Certificate (or other
certificate) setting forth such Operating Expenses due on such date, the
Administrative Agent shall transfer to the Person(s) entitled thereto in
accordance with Section 8.12(a) (to the extent cash is available in the Excess
Revenue Account) the amount of any deficiency in the payment of the Operating
Expenses set forth in such certificate.
(b) If, as of any date on which the payment of interest on or
principal of the Loans becomes due and payable as certified by the Company to
the Administrative Agent, the cash available in the Revenue Account is
insufficient to make such payment obligations on such date in accordance with
Section 8.12, the Administrative Agent shall transfer to the Lenders an amount
(to the extent cash is available in the Excess Revenue Account) to remedy any
such insufficiency.
(c) Within forty five (45) days after the end of each
Operating Year of the Company, the Company shall be permitted to request the
Administrative Agent to distribute any or all amounts available in the Excess
Revenue Account to the Company's Excess Cash Flow Account. Upon such request,
the Administrative Agent shall distribute such amount from the cash available in
the Excess Revenue Account to the Company's Excess Cash Flow Account.
Notwithstanding anything to the contrary in this Section 8.21 upon the
occurrence and during the Continuance of a Default or an
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Event of Default, funds in the Excess Revenue Account may be utilized to pay
interest on and principal of the Loans.
SECTION 8.22. Permitted Sources Account. Amounts on deposit in the
Permitted Sources Account shall be paid over to or upon the order of the Company
to pay costs in respect of which such Permitted Sources were deposited, upon the
receipt by the Administrative Agent of a certificate of the Company stating the
specific amount requested to be paid over to or upon the order of the Company
(or such other Person) to pay such costs actually incurred and setting forth a
brief description of the costs to be paid. If, at any time, amounts that were
deposited into the Permitted Sources Account are no longer necessary to pay
costs in respect of which such funds were deposited, as certified by a
Responsible Officer of the Company to the Administrative Agent, the
Administrative Agent shall transfer such amounts from amounts on deposit in the
Permitted Sources Account to the Company's Excess Cash Flow Account.
SECTION 8.23. Capacity Upgrades Reserve Account. Amounts on deposit in
the Capacity Upgrades Reserve Account shall be paid over to or upon the order of
the Company to pay costs with respect to Capacity Upgrades, upon the receipt by
the Administrative Agent of a certificate of the Company stating the specific
amount requested to be paid over to or upon the order of the Company (or such
other Person) to pay such costs actually incurred and setting forth a brief
description of the costs to be paid. If, at any time, amounts that were
deposited into the Capacity Upgrades Reserve Account are no longer necessary to
pay costs in respect of which such funds were deposited, as certified by a
Responsible Officer of the Company to the reasonable satisfaction of the
Administrative Agent, the Administrative Agent shall apply such amounts in the
manner set forth at item "eighth" in Section 8.12(b). Upon the occurrence and
during the Continuance of a Default or an Event of Default, funds in the
Capacity Upgrade Reserve Account may be utilized to pay interest on and
principal of the Loans.
SECTION 8.24. Delivery of Officer's Certificates; Timing of Payments.
(a) Each certificate to be delivered by the Company under this Article shall be
issued by a Responsible Officer of the Company and shall be delivered (unless
otherwise specified) not later than 12:00 noon, New York City time, on the
Business Day immediately prior to the day on which the Administrative Agent is
required to make transfers hereunder. Any certificate of a Responsible Officer
of the Company delivered later than the time specified herein shall nevertheless
be considered valid and shall be honored by the Administrative Agent on or as
promptly after the date otherwise specified herein for payment as is
practicable, subject to the availability of cash in the applicable Account.
(b) Subject to (i) the timely receipt of a certificate of a
Responsible Officer of the Company as set forth in paragraph (a) above, (ii) the
availability of cash in the applicable Account and (iii) other circumstances
beyond the control of the Administrative Agent, the Administrative Agent shall
make any payment hereunder
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required (except for transfers between Accounts) by means of wire transfer of
immediately available funds, to the address of the payee(s) set forth in the
applicable certificate, to be received prior to 2:00 p.m., New York City time,
on the date specified herein for such payment.
SECTION 8.25. Release of Excess Amounts. If, as of any Principal
Payment Date, (a)(i) an amount is on deposit in the Debt Reserve Account, the
Maintenance Reserve Account, Capacity Upgrades Reserve Account in excess of the
Debt Reserve Required Balance, Capacity Upgrades Reserve Required Balance or the
Maintenance Reserve Required Balance, as applicable, or (ii) an amount is on
deposit in the Operating Reserve Account in excess of the Operating Reserve
Maximum Balance, whether as the result of the actual realization of income or
gain on the amounts on deposit in such Account or otherwise and (b) no Event of
Default or Designated Event has occurred and is continuing, then the
Administrative Agent shall, upon the instruction of the Company, distribute any
such excess amounts to the Revenue Account.
SECTION 8.26. Event of Default. Any other provision contained in this
Agreement to the contrary notwithstanding, (a) if a Default shall have occurred
and be continuing, distributions from the Accounts shall be made only with the
consent of the Majority Lenders and (b) if the Administrative Agent shall have
received notice from any Secured Party that an Event of Default shall have
occurred and be continuing and the Loans have been accelerated in accordance
with Article VII, the Administrative Agent shall upon the request of the
Majority Lenders then apply any proceeds in any Account in the following order
of priorities:
first, to the payment of all expenses, liabilities and
advances incurred or made by the Administrative Agent or any other
Secured Party in connection with the collection of any such amounts or
the liquidation of any Permitted Investments and of all unpaid fees
owing to the Administrative Agent;
second, to any Lender to which any payment under Section 2.12,
2.13, 2.14 or 2.15 is then due;
third, to the Administrative Agent, to be applied to the
payment of all unpaid fees owing to the Lenders;
fourth, to the Administrative Agent, to be applied to the
payment of all accrued but unpaid interest (whether or not due) on the
Loans;
fifth, to the Administrative Agent, to be applied to the
payment of all of the unpaid principal (whether or not due) of the
Loans;
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sixth, to the Administrative Agent, to be applied to the
payment of all other Obligations (whether or not due); and
seventh, to the Company, or such other Person as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 8.27. Investment. Any cash held by the Administrative Agent in
any Account shall be invested by the Administrative Agent from time to time as
directed in writing by the Company (or, if an Event of Default has occurred and
is continuing, by the Administrative Agent in its sole discretion) in Permitted
Investments. Any income or gain realized as a result of any such investment
shall be held as part of the applicable Account and reinvested as provided
herein. If any income tax is payable on account of any such income or gain, it
shall be paid by the Company or its Affiliates. Any such investment may be sold
by the Administrative Agent whenever necessary to make any distribution required
by this Agreement. The Administrative Agent shall have no liability for any loss
resulting from any such investment or sale thereof other than by reason of its
willful misconduct or gross negligence. The Administrative Agent will promptly
notify the Company of any loss resulting from any such investment or sale.
SECTION 8.28. Statements of Accounts. Not later than five (5) Business
Days following the end of each calendar month, and from time to time upon
written request of the Company, the Administrative Agent shall provide to the
Company a statement of amounts on deposit in each Account and Permitted
Investments as of the end of the prior month, (b) a statement of all transfers
into and withdrawals from each Account during the prior month and (c) a
statement of purchases and sales of Permitted Investments, and the receipt,
application or existence of any income, dividends or capital gains with respect
thereto, during the prior month.
SECTION 8.29. Value. Cash and Permitted Investments on deposit from
time to time in the Accounts shall be valued by the Administrative Agent as
follows:
(a) cash shall be valued at the face amount thereof; and
(b) Permitted Investments shall be valued at the lesser of the
face amount and the purchase price.
SECTION 8.30. Other Determinations. The Company and the Administrative
Agent may establish procedures not materially inconsistent with this Agreement
pursuant to which the Administrative Agent may conclusively determine, for
purposes hereof, the amounts from time to time to be distributed or paid by the
Administrative Agent from cash available in the Accounts or pursuant to which
the Administrative Agent and the Company may provide for reasonable operating
and administrative flexibility.
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SECTION 8.31. Sales of Permitted Investments. The Administrative Agent
will use its reasonable commercial efforts to sell Permitted Investments so that
actual cash is available, on each date on which a distribution is to be made
pursuant to the terms hereof, for the Administrative Agent to make such
distribution in cash on such date. The amount of any check or other instrument
which may be deposited in any Account shall not be treated as cash available
until the final collection thereof.
SECTION 8.32. Available Cash. In determining the amount of available
cash in any Account at any time, in addition to any cash then on deposit in such
Account, the Administrative Agent shall treat as available cash the amount which
the Administrative Agent would have received on such day if the Administrative
Agent had liquidated all the Permitted Investments (at then prevailing market
prices) then on deposit in such Account.
SECTION 8.33. Termination. Upon termination hereof and the payment in
full of all Obligations, all rights to the Collateral shall revert to the Person
legally entitled thereto, and the Administrative Agent shall transfer any
remaining amounts, together with any interest thereon, on deposit in the
Accounts to the Company or as the Company may direct.
ARTICLE IX
THE AGENTS
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent and authorizes the Administrative Agent to take such actions
on its behalf and to exercise such powers as are delegated to the Administrative
Agent by the terms hereof and by the other Financing Documents, together with
such actions and powers as are reasonably incidental thereto.
WestDeutsche Landesbank Girozentrale, New York Branch is hereby
appointed Syndication Agent hereunder and under the other Financing Documents
and each Lender hereby authorizes Syndication Agent to act as its agent in
accordance with the terms hereof and the other Financing Documents. Dresdner
Bank A.G. is hereby appointed Documentation Agent hereunder, and each Lender
hereby authorizes Documentation Agent to act as its agent in accordance with the
terms hereof and the other Financing Documents. As of the Closing Date, all the
respective obligations of WestDeutsche Landesbank Girozentrale, New York Branch,
in its capacity as Syndication Agent, and Dresdner Bank A.G., in its capacity as
Documentation Agent, shall terminate.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates
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may accept deposits from, lend money to and generally engage in any kind of
business with the Company or other Affiliate thereof as if it were not the
Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Majority Lenders and (c) except as
expressly set forth in this Agreement, the Administrative Agent shall not have
any duty to disclose, and shall not be liable for the failure to disclose, any
information relating to the Company that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Majority Lenders or in the
absence of its own gross negligence or wilful misconduct. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Company or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with this Agreement or any other Financing Document,
(ii) the contents of any certificate, report or other document delivered
hereunder, under any other Financing Document or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth herein or in any other
Financing Document, (iv) the validity, enforceability, effectiveness or
genuineness hereof, of any other Financing Document or of any other agreement,
instrument or document, or (v) the satisfaction of any condition set forth in
Article IV or elsewhere herein or in any other Financing Document, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Company), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
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The Administrative Agent may perform any and all of its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all of its duties and exercise its rights and
powers through their respective Related Parties. The exculpatory provisions of
the preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent shall, where appropriate, take into account
the interests of the Secured Parties.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Company. Upon any such resignation, the
Majority Lenders shall have the right, in consultation with the Company, to
appoint a successor. If no successor shall have been so appointed by the
Majority Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent gives notice of its resignation,
then the retiring Administrative Agent may, on behalf of the Lenders and in
consultation with the Company, appoint a successor Administrative Agent which
shall be a bank with an office in New York, New York, or an Affiliate of any
such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Company to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Company and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
Section 10.3 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Administrative Agent.
The Lenders agree to indemnify the Administrative Agent and each
Related Party of the Administrative Agent (to the extent not reimbursed by the
Company), ratably according to the respective principal amounts of the Loans
owing to them and Commitments issued by them, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgements,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against the Administrative Agent or
such Related Party in any way relating to or arising out hereof or any other
Financing Document or any action taken or omitted by the Administrative Agent or
such Related Party under this Agreement or any other Financing Document,
provided that no Lender shall be liable to the Administrative Agent or such
Related Party for any portion of such liabilities, obligations, losses,
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damages, penalties, actions, judgements, suits, costs, expenses or disbursements
resulting from the Administrative Agent's or such Related Party's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender agrees to reimburse the Administrative Agent and each Related Party of
the Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the Administrative
Agent or such Related Party 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, this Agreement, to the extent that
the Administrative Agent or such Related Party is not reimbursed for such
expenses by the Company.
Each Lender acknowledges that it has, independently and without
reliance upon 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 the Company and its Subsidiaries and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any related agreement or any document furnished hereunder
or thereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.1. Notices. All notices, demands, declarations, consents,
directions, approvals, instructions, requests and other communications required
or permitted by the terms hereof shall be in writing and shall be given in
person or by means of telex, telecopy (promptly followed by delivery in person,
by mail or by courier in the case of a notice of Default) or other wire
transmission, or mailed by registered or certified mail, or sent by courier, in
each case addressed as follows (or to such other address as may be hereafter
notified by the respective parties from time to time parties hereto in
accordance with the terms of this Section):
(a) if to the Company, to it at ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇;
(b) if to the Administrative Agent, to it at ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. 212-412-7511); and
(c) if to any Lender, to it at its address (or telecopy
number) set forth on Schedule 10.1.
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Any such communication shall become effective when delivered by hand, or three
days after being deposited in the mail, first class postage prepaid, or, in the
case of a nationally or internationally recognized overnight courier service,
one Business Day after delivery to such courier service, or, in the case of
transmission by telecopier, when confirmation of receipt is obtained, or, in the
case of telex notice, when sent, answerback received.
SECTION 10.2. Waivers; Amendments. (a) No failure or delay by any party
in exercising any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder are cumulative and are not exclusive of any rights or remedies
that they would otherwise have. No waiver of any provision hereof or of any
other Financing Document or consent to any departure by the Company therefrom
shall in any event be effective unless the same shall be permitted by paragraph
(b) of this Section, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether the Administrative Agent or any
Lender may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any other Financing Document
nor any provision hereof or thereof may be waived, amended or modified except:
(i) in the case hereof, pursuant to an agreement or
agreements in writing entered into by the Company and the Majority
Lenders or by the Company and the Administrative Agent with the consent
of the Majority Lenders (unless expressly provided otherwise in this
Agreement);
(ii) in the case of any other Security Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent (with the consent of the Majority Lenders, unless
expressly provided otherwise in such Security Document) and each other
Person party thereto; or
(iii) in the case of any other Financing Document,
pursuant to an agreement or agreements in writing entered into by the
Administrative Agent (with the consent of the Majority Lenders, unless
expressly provided otherwise in such other Financing Document) and each
other Person party thereto;
provided, that without the written consent of each Lender (or each Lender of
such Class, as the case may be) no such agreement shall in each case:
(A) increase the Commitment of any Lender;
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(B) reduce the principal amount of any Loan or reduce
the rate of interest thereon, or reduce any fees payable hereunder;
(C) postpone the scheduled date of payment of the
principal amount of any Loan, or any interest thereon, or any fees
payable hereunder, or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date of expiration of any
Commitment;
(D) change Section 2.16(b) or 2.16(c);
(E) release all or substantially all of the
Collateral; or
(F) change any of the provisions of this Section or
the definition of "Majority Lenders" or any other provision hereof
specifying the number or percentage of Lenders (or Lenders of any
Class) required to waive, amend or modify any rights hereunder or make
any determination or grant any consent hereunder;
provided, further, that
(I) no such agreement shall amend, modify or
otherwise affect the rights or duties of the Administrative Agent
hereunder without the prior written consent of the Administrative
Agent; and
(II) any waiver, amendment or modification hereof
that by its terms affects the rights or duties under this Agreement of
the Revolving Credit Lenders (but not the Construction Loan Lenders or
the Term Lenders) or the Construction Loan Lenders or the Term Lenders
(but not the Revolving Credit Lenders) may be effected by an agreement
or agreements in writing entered into by the Company and requisite
percentage in interest of the affected Class of Lenders.
SECTION 10.3. Expenses; Indemnity; Damage Waiver. (a) The Company shall
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent the Lead Arranger and their respective Affiliates, including the
reasonable fees, charges and disbursements of the Administrative Agent and
counsel for the Administrative Agent and the reasonable fees, charges and
disbursements of the Marketing Consultant and the Independent Engineer, in
connection with the syndication of the credit facilities provided for herein
(including the costs in respect of preparing and copying one set of closing
binders for each Lender), the preparation and administration hereof and the
other Financing Documents or any amendments, modifications or waivers of the
provisions hereof or thereof (whether or not the transactions contemplated
hereby or thereby shall be consummated) and (ii) all out-of-pocket expenses
incurred by the
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Administrative Agent, the Lead Arranger or any Lender, including the fees,
charges and disbursements of any counsel for the Administrative Agent, the Lead
Arranger or any Lender, in connection with the enforcement or protection of its
rights in connection with this Agreement (including pursuant to a "workout"
restructuring or negotiating in respect thereof) or any other Financing
Document, including its rights under this Section, or in connection with the
Loans made hereunder, the Project Documents, or any other instrument or
agreement entered into by the Company in connection herewith or therewith,
including in connection with any workout, restructuring or negotiations in
respect thereof.
(b) The Company further agrees to pay, indemnify and hold each
Lender, the Administrative Agent and the Lead Arranger harmless from any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying stamp, excise or other similar taxes, if any,
which may be payable in connection with the execution and delivery of, or
consummation or administration of any of the transactions contemplated by, or
any amendment, supplement or modification of, or any waiver or consent under in
respect of, this Agreement or the other Financing Documents.
(c) The Company shall indemnify the Administrative Agent, the
Lead Arranger, the Independent Engineer and each Lender, and each Related Party
of any of the foregoing Persons (each such Person being called an "INDEMNITEE")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the reasonable fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of (i) the execution or delivery hereof, any other Financing Document or
any agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto of their respective obligations hereunder or thereunder or
the consummation of the transactions contemplated hereby, (ii) any Loan or the
use of the proceeds therefrom, (iii) in any way relating to or arising out of
the Project, or the manufacture, financing, construction, purchase, acceptance,
rejection, ownership, acquisition, delivery, nondelivery, preparation,
installation, storage, maintenance, repair, transfer of title, abandonment,
possession, rental, use, operation, maintenance, environmental clean-up,
condition, sale, return, importation, exportation or other application or
disposition of all or any part of any interest in the Project, or (iv) resulting
from any and all liability of or relating to the Company or the Project, whether
contingent or fixed, actual or potential, known or unknown, which arise under or
relate to matters covered by Environmental Laws, including, without limitation,
resulting from the violation of any Environmental Law, off-site disposal of
wastes or the existence or Release of any Hazardous Materials at the Project or
any other property of the Company (including, without limitation, clean-up
costs, response costs, costs of corrective action and natural resources
damages); provided that such indemnity shall not, as to any Indemnitee, be
available (i) to the extent that such losses, claims, damages, liabilities or
related expenses are a result of the gross negligence or wilful misconduct of
such
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Indemnitee or are a result of the representations and warranties or undertakings
made by such Indemnitee to its assignees hereunder or (ii) to compensate such
Indemnitee for any injury to the personnel of such Indemnitee if such injury is
not a result of the negligence of the Company.
(d) Each Indemnitee claiming any right to indemnity under
paragraph (c) of this Section by reason of the making of any claim or the
institution of any action against such Indemnitee shall promptly notify the
Company thereof (and shall notify the Company of any other loss, damage or
liability that it has suffered and intends to seek indemnification therefor
hereunder promptly after acquiring knowledge thereof) and shall consult with the
Company from time to time in connection with the defense of such claim or action
and shall not settle any such claim or action (x) before giving the Company
notice thereof and the Company the opportunity to assume the defense thereof (if
entitled hereunder) or (y) without the prior written consent of the Company,
which shall not be unreasonably withheld, if the Company is not entitled to
assume the defense as a result of clause (ii) or (iii) of the succeeding
sentence. The Company shall be entitled, at its expense, to assume the defense
of such claim or action or to participate in such action with counsel of its
choice (which counsel shall be reasonably satisfactory to such Indemnitee if the
Company elects to assume the defense) and at its expense, provided that the
Company may not assume the defense if (i) such Indemnitee determines, on the
reasonable advice of counsel, that representation of both the Company and such
Indemnitee by the Company's counsel would present such counsel with a conflict
of interest, (ii) the defendants in, or targets of, any such action include both
such Indemnitee and the Company, and such Indemnitee shall have concluded, on
reasonable advice of counsel, that there may be legal defenses available to it
which are different from or additional to those available to the Company, (iii)
the Company shall not have employed counsel satisfactory to such Indemnitee to
represent such Indemnitee within a reasonable time after notice of the
institution of any such action, or (iv) such Indemnitee is faced with potential
criminal liability.
(e) To the extent that the Company fails to pay any amount
required to be paid by it to the Administrative Agent or the Lead Arranger under
paragraph (a), (b) or (c) of this Section, each Lender severally agrees to pay
to the Administrative Agent or the Lead Arranger, as the case may be, such
Lender's Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent or the Lead Arranger in its capacity as such.
(f) All amounts due under this Section shall be payable
promptly after written demand therefor.
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SECTION 10.4. Successors and Assigns; Consent and Agreement. (a) The
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
the Company may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Company without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of the Lenders, the Administrative
Agent and the Lead Arranger) any legal or equitable right, remedy or claim under
or by reason hereof.
(b) Any Lender may at any time assign to one or more assignees
(other than to the Company, any Subsidiary or any Sponsor or any of their
respective Affiliates) all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it) and the other Financing Documents; provided that
(i) except in the case of an assignment to a Lender,
an Affiliate of any Lender or an Approved Fund, no such assignment
shall be permitted without the prior written consent of the
Administrative Agent and, so long as no Default or Event of Default
shall have occurred and be continuing, the Company (such consents not
to be unreasonably withheld or delayed); and
(ii) except in the case of an assignment to a Lender,
an Affiliate of a Lender or an Approved Fund or an assignment of the
entire remaining amount of the assigning Lender's Commitment, the
amount of each Commitment of the assigning Lender subject to each such
assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Company and
the Administrative Agent otherwise consents.
The parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance for its acceptance and recording in the
Register, together with a processing and recordation fee of $3,500 (which shall
be paid by the assignor and/or assignee but not the Company). Upon acceptance
and recording pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this
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Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.13, 2.14, 2.15 and 10.3). Any assignment
or transfer by a Lender of rights or obligations under this Agreement that does
not comply with this paragraph shall be treated for purposes hereof as a sale by
such Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Company, shall maintain at one of its offices in The City of New
York a copy of each Assignment and Acceptance delivered to it and a register for
the recordation of the names and addresses of the Lenders and the registered
owner(s) of any obligation evidenced by a Note (if applicable), and the
Commitment of, and principal amount of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The Notes (if
applicable) and the obligations evidenced thereby may be assigned or otherwise
transferred in whole or in part only by registration in the Register and the
Note evidencing the same shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such
obligation, duly endorsed by (or accompanied by a written instrument of
assignment or transfer duly executed by) the registered owner thereof, and
thereupon, upon written request, one or more new Note(s) in the same aggregate
principal amount shall be issued to the designated assignee(s) and the old Notes
shall be returned by the Administrative Agent to the Company marked "canceled".
No assignment of any Note or obligation evidenced thereby shall be effective
unless it has been recorded in the Register as provided in this Section 10.4(c).
The entries in the Register shall be conclusive, and the Company, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes hereof, notwithstanding notice to the contrary.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the processing and
recordation fee referred to in paragraph (b) of this Section and any written
consent to such assignment required by paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective
for purposes hereof unless it has been recorded in the Register as provided in
this paragraph.
(e) Any Lender may, without the consent of the Company or the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
owing to it); provided that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Company, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any
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agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
hereof. Subject to paragraph (f) of this Section, the Company agrees that each
Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.13, 2.14 or 2.15 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant. A Participant shall not be entitled to the benefits of Section 2.15
unless the Company is notified of the participation sold to such Participant and
such Participant agrees, for the benefit of the Company, to comply with the
provisions of Section 2.15(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any such pledge or assignment to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such assignee for such Lender as a party hereto.
SECTION 10.5. Survival. All covenants, agreements, representations and
warranties made by the Company herein and in the certificates or other
instruments delivered in connection herewith or pursuant hereto shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery hereof and the making of any Loans, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loan or any fee or any other amount payable under this Agreement
is outstanding and unpaid and so long as the Commitments have not expired or
terminated. The provisions of Sections 2.13, 2.14, 2.15 and 10.3 and Articles
IX, X and XI shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination of the Commitments or the termination
hereof or any provision hereof.
SECTION 10.6. Counterparts; Integration; Effectiveness. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and any
separate letter agreements with respect to fees payable to the Administrative
Agent, the Lead Arranger or a Related Party constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.1, this Agreement shall become
effective when it shall have been executed by the
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Administrative Agent and when the Administrative Agent shall have received
counterparts hereof which, when taken together, bear the signatures of each of
the other parties hereto, and thereafter shall be binding upon and inure to the
benefit of the parties hereto and, subject to and in accordance with Section
10.4, their respective successors and assigns. Delivery of an executed
counterpart of a signature page hereof by telecopy shall be effective as
delivery of a manually executed counterpart hereof.
SECTION 10.7. Severability. Any provision hereof held to be invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 10.8. Right of 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, to the fullest extent permitted by law, to setoff and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Company against any of and all the
obligations of the Company now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 10.9. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK, EXCEPT THAT THE PROVISIONS OF ARTICLE XI
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF ENGLAND AND
WALES.
(b) THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE
SUPREME COURT OF THE STATE OF NEW YORK SITTING IN NEW YORK COUNTY AND OF THE
UNITED STATES DISTRICT COURT OF THE SOUTHERN DISTRICT OF NEW YORK, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING HERETO, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
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DETERMINED IN SUCH NEW YORK STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT
OR ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING
HERETO AGAINST THE COMPANY OR ITS PROPERTIES OR THE COMPANY'S SUBSIDIARIES OR
THEIR PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING IN ANY COURT REFERRED TO IN PARAGRAPH (B)
OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) EACH PARTY IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN
THE MANNER PROVIDED FOR NOTICES IN SECTION 10.1. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
(e) THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY
APPOINTS FLAG TELECOM USA LIMITED (THE "NEW YORK PROCESS AGENT"), WITH AN OFFICE
ON THE CLOSING DATE AT ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇▇▇, AS ITS AGENT TO RECEIVE ON BEHALF OF THE COMPANY AND ITS RESPECTIVE
PROPERTY SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING IN ANY SUCH NEW YORK STATE
OR FEDERAL COURT AND AGREES PROMPTLY TO APPOINT A SUCCESSOR NEW YORK PROCESS
AGENT IN THE CITY OF NEW YORK (WHICH SUCCESSOR PROCESS AGENT SHALL ACCEPT SUCH
APPOINTMENT IN A WRITING REASONABLY SATISFACTORY TO THE ADMINISTRATIVE AGENT
PRIOR TO THE TERMINATION FOR ANY REASON OF THE APPOINTMENT OF THE INITIAL NEW
YORK PROCESS
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AGENT). IN ANY SUCH ACTION OR PROCEEDING IN SUCH NEW YORK STATE OR FEDERAL COURT
SITTING IN THE CITY OF NEW YORK, SUCH SERVICE MAY BE MADE ON THE COMPANY BY
DELIVERING A COPY OF SUCH PROCESS TO THE COMPANY IN CARE OF THE APPROPRIATE
PROCESS AGENT AT SUCH PROCESS AGENT'S ABOVE ADDRESS AND BY DEPOSITING A COPY OF
SUCH PROCESS IN THE MAILS BY CERTIFIED OR REGISTERED AIR MAIL, ADDRESSED TO THE
COMPANY AT ITS ADDRESS REFERRED TO IN SECTION 10.1 (SUCH SERVICE TO BE EFFECTIVE
UPON SUCH RECEIPT BY THE APPROPRIATE PROCESS AGENT AND THE DEPOSITING OF SUCH
PROCESS IN THE MAILS AS AFORESAID). THE COMPANY HEREBY IRREVOCABLY AND
UNCONDITIONALLY AUTHORIZES AND DIRECTS SUCH PROCESS AGENT TO ACCEPT SUCH SERVICE
ON ITS BEHALF. AS AN ALTERNATE METHOD OF SERVICE, THE COMPANY ALSO IRREVOCABLY
AND UNCONDITIONALLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH
ACTION OR PROCEEDING IN SUCH NEW YORK STATE OR THE UNITED STATES DISTRICT COURT
OF THE SOUTHERN DISTRICT OF NEW YORK BY MAILING OF COPIES OF SUCH PROCESS TO THE
COMPANY BY CERTIFIED OR REGISTERED AIR MAIL AT ITS ADDRESS REFERRED TO IN
SECTION 10.1.
SECTION 10.10. Waiver of Sovereign Immunity. (a) To the extent that the
Company has or hereafter may acquire any immunity (sovereign or otherwise) from
any legal action, suit or proceeding, from jurisdiction of any court or from
setoff or any legal process (whether service or notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise) with respect to itself or any of its property, whether or not held
for its own account, the Company hereby irrevocably and unconditionally waives
and agrees not to plead or claim such immunity in respect of its obligations
under this Agreement, the Notes and the other Financing Documents.
(b) The Company hereby agrees that the waivers set forth in
this Section shall have the fullest extent permitted under the Foreign Sovereign
Immunities Act of 1976 of the United States of America and are intended to be
irrevocable and not subject to withdrawal for purposes of such Act.
SECTION 10.11. Judgment Currency. The obligation of the Company under
this Agreement and any other Financing Document to make payments in Dollars
shall not be discharged or satisfied by any tender or recovery pursuant to any
judgment expressed in or converted into any other currency except to the extent
that such tender or recovery results in the effective receipt by the
Administrative Agent, the Lead Arranger or the Lenders, as the case may be, of
the full amount of Dollars payable under this Agreement and any of the other
Financing Documents and the Company shall (and
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shall procure that each Subsidiary shall with respect to any Subsidiary Security
Agreement to which it is a party) indemnify the Administrative Agent, the Lead
Arranger and the Lenders (and such Persons shall have an additional legal claim)
for any difference between such full amount and the amount effectively received
by the Administrative Agent, the Lead Arranger or the Lenders, as the case may
be, pursuant to any such tender or recovery. The Administrative Agent's
determination of amounts effectively received by the Lenders shall be conclusive
absent manifest error.
SECTION 10.12. Damage Waiver. To the extent permitted by applicable
law, the Company shall not assert, and hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any Financing Document or
any agreement or instrument contemplated hereby or thereby, the transactions
contemplated hereby or thereby, any Loan or the use of the proceeds thereof.
SECTION 10.13. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING HERETO OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY).
SECTION 10.14. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part hereof
and shall not affect the construction of, or be taken into consideration in
interpreting, this Agreement.
SECTION 10.15. Removal of Consultants. (a) The Administrative Agent may
(and, if the Company can demonstrate to the satisfaction of the Administrative
Agent that any Consultant has persistently failed to perform its duties in a
professional manner, the Administrative Agent will) from time to time, in its
reasonable discretion, remove any one or more of the Consultants, provided that
the Administrative Agent select and appoint a replacement therefor that is
approved by the Company (which approval shall not be unreasonably withheld or
delayed). Notice of any replacement Consultant shall be given promptly to the
Company and the Lenders.
(b) Each Consultant shall be contractually obligated to the
Administrative Agent to carry out the activities required of it in this
Agreement and the other Financing Documents and as otherwise requested by the
Administrative Agent.
SECTION 10.16. Confidentiality. Notwithstanding anything to the
contrary contained in this Agreement or any other Financing Document, each of
the parties hereto agrees, and each successor or assignee thereof, by becoming a
party hereto, shall
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be deemed to have agreed, to keep confidential (and to cause its officers,
directors, employees, agents, representatives and affiliates to keep
confidential) any information which is obtained pursuant to the terms hereof or
of the other Financing Documents and is marked "confidential" (collectively, the
"CONFIDENTIAL MATERIALS"), except that each such party shall be permitted to
disclose the Confidential Materials (a) to its officers, directors, employees,
agents, representatives and Affiliates, (b) to its attorneys, accountants and
financial, insurance and other independent advisors who have a need for such
information (provided such persons are informed of the confidential nature of
the Confidential Materials and the restrictions imposed by this Section), (c) to
the extent required by Applicable Law (including, without limitation, in making
filings with any Governmental Authority and disclosures by the Lenders to bank
or securities examiners and regulatory officials upon their request or demand),
(d) in response to any subpoena or other legal process (in which event such
party shall promptly notify the Company in advance of any such requirement), (e)
to the extent such Confidential Materials become publicly available other than a
result of a breach of the provisions of this Section, (f) to the extent the
Company shall have consented to such disclosure in writing and (g) to any
Lender's assignee or any proposed assignee or participant of a Lender which
agrees in writing to be bound by the terms of this Section as if it were a
Lender party.
ARTICLE XI
ADMINISTRATIVE AGENT
SECTION 11.1. Trust for Secured Parties. The parties hereto agree that
the Administrative Agent shall hold the Collateral (collectively, the "TRUST
COLLATERAL") which is subject to the Company Security Agreement (England) , the
Company Security Agreements (France) and the Subsidiary Debenture on trust for
itself and the Secured Parties on the terms and conditions herein contained.
SECTION 11.2. Default Procedure.
(a) If a Default occurs, the Administrative Agent shall
promptly after becoming aware of the same notify the Lenders in writing of such
occurrence.
(b) The Administrative Agent shall use commercially reasonable
endeavors to promptly comply with the instructions of Requisite Lenders as to
the exercise or enforcement by it, following a Default, of any of its rights in
respect of the Trust Collateral, upon and subject to the terms and conditions
hereof and pursuant to the terms and conditions in the Security Documents.
(c) The Administrative Agent, if applicable, shall at any time
after the occurrence of a Default be entitled (but not obliged) to request
instructions from the Secured Parties as to whether it should endeavor to
enforce any of the Trust Collateral
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and/or as to the manner in which it should endeavor to do so, and to convene on
reasonable notice a meeting of the Secured Parties to discuss such matters.
SECTION 11.3. Application of Proceeds.
(a) All receipts or recoveries by the Administrative Agent (or
by any of the Obligors and paid over to the Administrative Agent) pursuant to,
or upon enforcement of, any of the Trust Collateral and all other monies which
are by the terms of any Financing Documents to be applied in accordance with
this Section 11.3 shall, after deducting (to the extent not already deduced or
retained prior to such receipt or recovery by the Administrative Agent) all such
sums as are mentioned as deductions in the definition of "Proceeds" (all such
sums hereinafter collectively referred to as "DEDUCTIONS"), be converted (unless
such sums are to be credited for the time being to suspense or impersonal
account) by the Administrative Agent from their existing currency of
denomination into the currency or currencies (if different) of sums then
outstanding under the Financing Documents (any such conversion from one currency
to another to be made at the Administrative Agent's then prevailing spot rate
for the purchase of that other currency with the first mentioned currency at the
office of the Administrative Agent by which such conversion is made) and then,
after deducting all commissions and expenses relating to any such conversion,
applied by the Administrative Agent either as a whole or in such proportions as
the Administrative Agent shall think fit:
(i) in payment to the credit of an account (each a
"PROCEEDS ACCOUNT") in London in its name and, if any of the sums then
outstanding under any of the Financing Documents are contingent or
future, may be held in such account or accounts for so long as the
Administrative Agent shall think fit pending their further application
from time to time in accordance with this Section 11.3, or
(ii) in payment to the credit of a suspense or
impersonal account in London and may be held in such account for so
long as the Administrative Agent shall think fit pending any conversion
and further application from time to time of such monies (as the
Administrative Agent shall be entitled, but not obliged, to do in its
discretion) in accordance with the foregoing provisions of this Section
11.3.
(iii) sums standing to the credit of the Proceeds
Account(s) shall, to the extent permitted by Applicable Law, be applied
in the following order of priority:
(A) in or towards discharging all sums owed
to the Administrative Agent (in its capacity as security
agent) under any of this Agreement and the Security Documents;
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(B) in or towards discharging all
assessments to Tax made on the Administrative Agent in respect
of any of the Trust Collateral, in respect of anything done by
it in its capacity as security agent or otherwise by virtue of
its capacity as security agent;
(C) after setting aside in such of the
Proceeds Accounts as the Administrative Agent may think fit,
by way of reserve, amounts required to meet all such sums
mentioned in paragraph (i) above as the Administrative Agent
considers will or may become payable in connection with the
exercise of any rights and/or the performance of any of the
Administrative Agent's obligations under the Company Security
Agreement (UK), Company Security Agreement (France), the
Charge Over Business and the Subsidiary Debenture, all such
Deductions as the Administrative Agent considers will or may
become payable and which it reasonably considers will or may
become payable and which it reasonably considers will or may
not be discharged out of future receipts or recoveries from
enforcement of any rights and all such sums as the
Administrative Agent considers will or may be required to meet
any assessment to Tax that may be made upon it, in payment to
the Administrative Agent, on behalf of the Secured Parties,
for application in or towards the discharge of all sums due
and payable by the Company under this Agreement;
(D) if the Company is under no further
actual or contingent liability under this Agreement, in
payment to any person to whom the Administrative Agent is
obliged to pay in priority to the Obligors otherwise entitled
thereto, to the extent it is so obliged; and
(E) thereafter, in payment to the Obligors
entitled thereto.
(b) The fact that the Administrative Agent may make a payment
pursuant to Sections 11.3(a)(ii) through (iii)(A), or may determine that the
Company is under no further actual or contingent liability under the Financing
Documents and make a payment under Section 11.3(a)(iii)(B) or (iii)(C), will not
thereafter prevent the Administrative Agent from applying any further Proceeds,
or any credit balance on any Proceeds Account, in the order set out in Section
11.3.
(c) The Administrative Agent shall be entitled to make the
deductions and withholdings (on account of Taxes or otherwise) from payments
which it is required by any Applicable Law to make, and to pay all Taxes which
may be assessed against it in respect of any of the Trust Collateral, in respect
of anything done by it in its capacity as security agent or otherwise by virtue
of its capacity as security
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agent. Each of the Obligors agrees that the Secured Obligations shall only be
discharged by virtue of receipt or recovery by the Administrative Agent of
Proceeds, or of payments made by the Administrative Agent hereunder, to the
extent that the ultimate recipient actually receives monies from the
Administrative Agent hereunder.
(d) If any of the Obligors receives any sum from any person
which, pursuant to the Financing Documents, should have been paid to the
Administrative Agent, such sum shall be held on trust for the Secured Parties
and shall forthwith be paid over to the Administrative Agent for application in
accordance with this Section 11.3.
(e) The Administrative Agent shall be entitled to pay any
Deductions to the person or persons entitled thereto.
SECTION 11.4. The Administrative Agent's Rights, Powers and
Discretions.
(a) The Administrative Agent shall have all the powers and
discretions conferred upon trustees by the Trustee ▇▇▇ ▇▇▇▇ (to the extent not
inconsistent herewith) and by way of supplement it is expressly declared that
the Administrative Agent may:
(i) assume that:
(1) no Default has occurred; and
(2) no right, power, authority or discretion
vested by this Agreement, the Lenders or any other
Person or group of Persons has been exercised.
unless it has, in its capacity as security agent,
actual knowledge or actual notice to the contrary;
(ii) engage and pay for the advice or services of,
and rely and act on the opinion or advice (howsoever given) of, or any
information obtained from, any lawyers, accountants, surveyors or other
professional advisers or experts whose advice or services may to it
seem necessary, expedient or desirable;
(iii) rely as to any matters of fact which might
reasonably be expected to be within the knowledge of any of the
Obligors or any other person upon a certificate signed by or on behalf
of such Obligor or such other person;
(iv) rely upon any communication or document believed
by it to be genuine;
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(v) refrain from exercising any right, power or
discretion vested in it under any of the Financing Documents unless and
until instructed by the Requisite Lenders as to whether or not such
right, power or discretion is to be exercised and, if it is to be
exercised, as to the manner in which it should be exercised;
(vi) refrain from acting in accordance with any
instructions of the Requisite Lenders until it shall have received
security or indemnity as it may require (whether by way of payment in
advance or otherwise) for all costs, claims, expenses (including legal
fees) and liabilities which it will or may expend or incur in complying
with such instructions;
(vii) do any act or thing in the exercise of any of
its duties under the Financing Documents which in its absolute
discretion (in the absence of any instructions of the Requisite Lenders
as to the doing of such act or thing) it deems advisable for the
protection and benefit of all the Secured Parties;
(viii) upon a disposal of any property the subject of
any of the Trust Collateral by any Receiver, or by any of the Obligors
where the Administrative Agent has consented to the disposal, to any
third party, release such property from such Trust Collateral;
(ix) perform all of its obligations under the
Financing Documents, notwithstanding anything contained in this
Agreement; and
(x) subject to the proviso hereto and unless the
express provisions of any such Security Document provide otherwise, if
authorized by the Requisite Lenders, amend or vary the terms of or
waive breaches of or Defaults under, or otherwise excuse performance of
any provision of, or grant consents under, the Security Documents, any
such amendment, variation, waiver or consent so authorized to be
binding on all the parties hereto and the Administrative Agent to be
under no liability whatsoever in respect thereof. Provided that nothing
in this paragraph (x) shall be taken to authorize, except with the
prior consent of all of the Secured Parties:
(1) (without prejudice to paragraph (viii),
above) any amendment of any Security Document which
would release the Lien on any Trust Collateral of
such Security Document (other than in accordance with
the terms thereof or of the other Financing
Documents), or the manner in which Proceeds are
distributed hereunder; or
(2) any change in this Section 11.4.
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(b) The Administrative Agent shall:
(i) promptly inform the Lenders of the contents of
any notice or document received by it, in its capacity as security
agent, from any of the Obligors under any of the Security Documents;
(ii) save as otherwise provided herein, act as
security agent under the Financing Documents in accordance with any
instructions given to it by the Requisite Lenders, which instructions
shall be binding on all of the Secured Parties; and
(iii) if so instructed by the Requisite Lenders,
refrain from exercising any right, power or discretion vested in it as
security agent under the Financing Documents.
(c) Notwithstanding anything to the contrary expressed or
implied herein, the Administrative Agent shall not:
(i) be bound to enquire as to the occurrence or
otherwise of any Default;
(ii) be bound to account to any other Secured Party
for any sum or the profit element of any sum received by it for its own
account whether in connection with the Financing Documents or
otherwise;
(iii) be bound to disclose to any other person any
information relating to any of the Obligors if such disclosure would or
might in its opinion constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person; or
(iv) be under any obligations other than those for
which express provision is made herein.
(d) The Administrative Agent accepts no responsibility for the
accuracy and/or completeness of any information supplied by any of the Obligors
or any other person in connection with, or for the legality, validity,
effectiveness, adequacy or enforceability of, any of the Financing Documents and
shall not be liable or responsible for any losses to any person, howsoever
caused, as a result of taking or omitting to take any action whatsoever in
relation to any of the Financing Documents or otherwise, save in the case of
gross negligence or wilful misconduct.
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(e) Each of the Secured Parties agrees that it will not assert
or seek to assert against any director, officer or employee of the
Administrative Agent any claim it might have against any of them in respect of
the matters referred to in Section 11.4(d).
(f) The Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking or other business with,
each of the Obligors.
(g) It is understood and agreed by each Secured Party that it
has itself been, and will continue to be, solely responsible for making its own
independent appraisal of and investigations into the financial condition,
creditworthiness, condition, affairs, status and nature of each of the Obligors
and, accordingly, each Secured Party warrants to the Administrative Agent that
it has not relied and will not hereafter rely on the Administrative Agent:
(i) to check or enquire on its behalf into the
adequacy, accuracy or completeness of any information provided by any
of the Obligors or any other person in connection with any of the
Financing Documents or the transactions therein contemplated (whether
or not such information has been or is hereafter circulated to such
Secured Party by the Administrative Agent);
(ii) to check or enquire on its behalf into the
adequacy, accuracy or completeness of any communication delivered to it
under any of the Financing Documents, any legal or other opinions,
reports, valuations, certificates, appraisals or other documents
delivered or made or required to be delivered or made at any time in
connection with any of the Financing Documents, any security to be
constituted thereby or any other report or other document, statement or
information circulated, delivered or made, whether orally or otherwise
and whether before, on or after the date of this Agreement;
(iii) to check or enquire on its behalf into the
ownership, value or sufficiency of any property the subject of any of
the Trust Collateral, the priority of any of the Trust Collateral, the
right or title of any person in or to any property comprised therein or
the existence of any encumbrance affecting the same; or
(iv) to assess or keep under review on its behalf the
financial condition, creditworthiness, condition, affairs, status or
nature of any of the Obligors.
(h) The Administrative Agent shall be at liberty to place any
of the Financing Documents, Project Documents and any other instruments,
documents or deeds delivered to it pursuant to or in connection with any of the
Security Documents for the time being in its possession in any safe deposit,
safe or receptacle selected by it
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or with any bank, any company whose business includes undertaking the safe
custody of documents or any firm of lawyers of good repute and shall not be
responsible for any loss thereby incurred.
(i) The Administrative Agent may, whenever it thinks fit,
delegate by power of attorney or otherwise to any person or persons, or
fluctuating body of persons, all or any of the rights, powers, authorities and
discretions vested in it by any of this Agreement and the Security Documents and
such delegation may be made upon such terms (including the power to
sub-delegate) subject to such conditions and subject to such regulations as it
may think fit.
(j) Notwithstanding anything else herein contained, the
Administrative Agent may refrain from doing anything which would or might in its
opinion be contrary to any Applicable Law of any jurisdiction or any relevant
directive or regulation of any agency of any state or which would or might
otherwise render it liable to any person, and may do anything which is, in its
opinion, necessary to comply with any such Applicable Law, directive or
regulation.
(k) The Administrative Agent and every attorney, agent or
other person appointed by it under any of this Agreement and the Security
Documents may indemnify itself or himself out of the Trust Collateral against
all claims, demands, liabilities, proceedings, costs, fees, charges, losses and
expenses incurred by any of them in relation to or arising out of the taking or
holding of any of the Trust Collateral, the exercise or purported exercise of
any of the rights, trusts, powers and discretions vested in any of them or any
other matter or thing done or omitted to be done in connection with any of the
Financing Documents or pursuant to any Applicable Law (otherwise than as a
result of its gross negligence or wilful misconduct).
(l) Without prejudice to the provisions of any of the Security
Documents, the Administrative Agent shall not be under any obligation to insure
any property or to require any other person to maintain any such insurance and
shall not be responsible for any loss which may be suffered by any person as a
result of the lack of or inadequacy or insufficiency of any such insurance.
Where the Administrative Agent is named on any insurance policy as an insured
party, it shall not be responsible for any loss which may be suffered by reason
of, directly or indirectly, its failure to notify the insurers of any material
fact relating to the risk assumed by such insurers or any other information of
any kind, unless any Secured Party shall have requested it to do so in writing
and the Administrative Agent shall have failed to do so within fourteen (14)
days thereafter.
(m) The Administrative Agent shall not be liable for any
failure:
(i) to require the deposit with it of any deed or
document certifying, representing or constituting the title of any of
the Obligors to any of
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the property mortgaged, charged, assigned or otherwise encumbered by or
pursuant to any of the Security Documents;
(ii) to obtain any license, consent or other
authority for the execution, delivery, validity, legality, adequacy,
performance, enforceability or admissibility in evidence of any of the
Security Documents;
(iii) to register or notify any of the foregoing in
accordance with the provisions of any of the documents of title of any
of the Obligors;
(iv) to effect or procure registration of or
otherwise protect any of the Trust Collateral by registering the same
under any applicable registration laws in any territory;
(v) to take, or to require any of the Obligors to
take, any steps to render the Trust Collateral effective or to secure
the creation of any ancillary charge under the Applicable Laws; or
(vi) to require any further assurances in relation to
any of the Security Documents.
(n) The Administrative Agent shall be entitled to accept
without enquiry, requisition or objection such right and title as each of the
Obligors may have to the property belonging to it (or any part thereof) which is
the subject matter of any of the Trust Collateral and shall not be bound or
concerned to investigate or make any enquiry into the right or title of such
Obligor to such property (or any part thereof) or, without prejudice to the
foregoing, to require such Obligor to remedy and defect in its right or title as
aforesaid.
(o) Each Lender hereby confirms and agrees that it does not
wish to be registered in accordance with Rule 146 of the Land Registration Rules
1925 as the joint proprietor of any mortgage or charge created pursuant to any
of the Company Security Agreement (UK) and the Subsidiary Debenture and
accordingly authorizes the Administrative Agent to hold such mortgage or charge
in its sole name as Administrative Agent for the Secured Parties and hereby
requests H.M. Land Registry to register the Administrative Agent as the sole
proprietor of any such mortgage or charge.
(p) In acting as security agent hereunder and under the
Security Documents, the Administrative Agent's agency division shall be treated
as a separate entity from any of its other divisions or departments and,
notwithstanding the foregoing provisions of this Section 11.4, in the event that
the Administrative Agent should act for any of the Obligors in any capacity in
relation to any other matter, any information given by such Obligor to the
Administrative Agent may be treated by it as confidential.
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SECTION 11.5. Resignation of Administrative Agent as Security Agent.
(a) The Administrative Agent may resign as security agent
hereunder at any time without assigning any reason therefor by giving not less
than thirty days' prior written notice to that effect to each of the other
parties hereto; provided, however, that no such resignation shall be effective
until (i) a successor to the Administrative Agent is appointed in accordance
with the succeeding provisions of this Section 11.5, (ii) all of the security
created by the Security Documents and all of the Administrative Agent's rights,
benefits and obligations as security agent under the Financing Documents have
been transferred to its successor, and (iii) its successor has confirmed its
agreement to be bound by the provisions of the Financing Documents and all other
related agreements to which the Administrative Agent is a party in its capacity
as security agent.
(b) If the Administrative Agent gives notice of its
resignation as security agent pursuant to Section 11.5(a), any reputable bank or
other financial institution may be appointed as a successor to the
Administrative Agent by the Lenders during the period of such notice but, if no
such successor is so appointed, the Administrative Agent may, in consultation
with the Company, appoint such a successor itself.
(c) If a successor to the Administrative Agent is appointed
under the provisions of Section 11.5(b), (i) the resigning Administrative Agent
shall be discharged from any further obligation hereunder but shall remain
entitled to the benefit of the provisions of Section 11.3 and Section 11.4 and
(ii) its successor and each of the other parties hereto shall have the same
rights and obligations amongst themselves as they would have had if such
successor had been a party hereto.
(d) Notwithstanding any other provision of this Article XI,
but subject to Section 11.6, the Administrative Agent shall at all times be the
same Person as the Administrative Agent under Article IX and a resignation of
the Administrative Agent under Article IX shall also act as a resignation of the
Administrative Agent under this Article XI.
SECTION 11.6. Appointment of Additional Security Agents.
Subject to the provision of Article IX relating to the replacement of
the Administrative Agent, the Administrative Agent may at any time appoint any
person (whether or not a trust corporation) to act either as a separate security
agent or as a co-security agent jointly with it (i) if it considers such
appointment to be in the interests of the Secured Parties or (ii) for the
purposes of conforming to any legal requirements, restrictions or conditions
which the Administrative Agent deems relevant for the purpose hereof, and the
Administrative Agent shall give prior notice to the Company and the Lender of
any such appointment. Any person so appointed shall have such
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powers, authorities and discretions and such duties and obligations as shall be
conferred or imposed on such person by the instrument of appointment and shall
have the same benefits under Section 11.4 or Section 11.5 as the security agent.
The Agent shall have the power in like manner to remove any person so appointed,
and any costs, charges or expenses incurred by such person in performing its
functions pursuant to such appointment, shall for the purposes hereof be treated
as costs, charges and expenses incurred by the Administrative Agent in
performing its function as security agent hereunder.
SECTION 11.7. Costs and Indemnities
(a) The Company shall, from time to time on demand of the
Administrative Agent, reimburse the Administrative Agent for all costs and
expenses (including legal fees) incurred by it in or in connection with the
negotiation, preparation and execution of this Agreement and the Security
Documents.
(b) The Company shall, from time to time on demand of the
Administrative Agent, reimburse the Administrative Agent for all out of pocket
costs and expenses incurred by the Administrative Agent in acting as security
agent hereunder and in relation to the Security Documents, including all costs
of convening and holding any meeting of the Secured Parties for any purpose
whatsoever and all professional fees.
(c) The Company shall, from time to time on demand of the
Administrative Agent, reimburse the Administrative Agent for all costs and
expenses (including professional fees) incurred in or in connection with the
preservation and/or enforcement of any of the Trust Collateral.
(d) The Company shall indemnify the Administrative Agent and
every attorney, agent or other person appointed by it under any of the Security
Documents against all claims, demands, liabilities, proceedings, costs, fees,
charges, losses and expenses incurred by any of them in relation to or arising
out of the taking or holding of any of the Trust Collateral, in the exercise or
purported exercise of any of the rights, trusts, powers and discretions vested
in any of them or in respect of any matter or thing done or omitted to be done
in connection with any of the Security Documents or pursuant to any law or
regulation (otherwise than as a result of its gross negligence or wilful
misconduct).
(e) The Company shall pay all stamp, registration and other
taxes to which any of the Security Documents or any judgment given in connection
therewith is or at any time may be subject and shall, from time to time on
demand of the Administrative Agent, indemnify the Administrative Agent against
all liabilities, costs, claims and expenses resulting from any failure to pay or
any delay in paying any such tax.
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(f) All fees payable by the Company under this Section 11.7
shall be exclusive of Value Added Tax or any similar Tax, which shall be payable
by the Company at the relevant rate from time to time in addition to such fees.
(g) If the Company fails to perform any of its obligations
under any of Sections 11.7(a) to 11.7(f), each Secured Party shall, in the
proposition borne by its Applicable Percentages to the aggregate of the
Applicable Percentages of all the Secured Parties for the time being (or, if the
Applicable Percentage of each of the Secured Parties is zero, immediately or
prior to their being reduced to zero), indemnify the Administrative Agent
against any loss incurred by it as a result of such failure and the Obligors
shall jointly and severally indemnify each Secured Party against, and forthwith
reimburse to each Secured Party the amount of, any payment made by it pursuant
to this Clause section 11.7(g).
SECTION 11.8. Miscellaneous.
(a) The Secured Parties shall furnish to the Administrative
Agent such information as the Administrative Agent may reasonably specify as
being necessary or desirable for the purpose of enabling the Administrative
Agent to perform its functions as security agent.
(b) The perpetuity period under the rule against perpetuities,
if applicable hereto, shall be the period of eighty years from the date hereof.
SECTION 11.9. Administrative Agent as Direct Creditor.
The Company agrees to pay the Administrative Agent, as
applicable, sums equal to any sums owing to each Secured Party under the
Financing Documents as and when the same fall due for payment thereunder. Each
Secured Party agrees that payment of such sums to the Administrative Agent in
accordance herewith, will be a good discharge, pro tanto, of the corresponding
obligations owing to it under the Financing Documents, provided for the
avoidance of doubt, that any such payment shall only be considered as a valid
discharge or a partial discharge (as the case may be) in respect of any
Obligation to the extent it has actually been applied by the Administrative
Agent. Accordingly, the rights of the Secured Parties to amounts due from each
of the Obligors owing Obligations under the Financing Documents are joint and
several with the rights of the Administrative Agent to receive the same.
SECTION 11.10. Winding-up of Trust.
If the Administrative Agent shall determine that all of the
Secured Obligations and all other obligations the discharge of which is secured
by any of the Security Documents have been fully and finally discharged and none
of the Secured Parties is under any commitment, obligation or liability (whether
actual or contingent)
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to take advances or provide other financial accommodation to the Company under
or pursuant to this Agreement, the trusts herein set out shall be wound up and
the Administrative Agent shall release, without recourse or warranty, all of the
Trust Collateral then held by it, whereupon each of the Administrative Agent,
the Secured Parties and the Obligors shall be released from its obligations
hereunder (save for those which arose prior to such winding-up).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
FLAG ATLANTIC LIMITED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Attorney-in-Fact
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
BARCLAYS BANK PLC,
as the Administrative Agent
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
BARCLAYS BANK PLC,
as the Lead Arranger and a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Director
S-1
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇,
▇▇▇ ▇▇▇▇ AND GRAND CAYMAN
BRANCHES
as Documentation Agent and Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇▇ ▇▇
Name: ▇▇▇▇▇ ▇▇., P.E.
Title: Assistant Vice President
WESTDEUTSCHE LANDESBANK
GIROZENTRALE, NEW YORK BRANCH,
as Syndication Agent and Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Director
S-2