Exhibit 4.3(a)
[EXECUTION COPY]
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Credit Agreement,
dated as of
July 14, 1999,
among
GlobeNet Communications Holdings Ltd.,
as the Borrower,
Various Financial Institutions
And Other Persons,
as the Lenders,
Toronto Dominion (Texas) Inc.,
as the Administrative Agent and the Issuer,
and
Credit Suisse First Boston,
as the Syndication Agent.
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TD Securities (USA) Inc.,
as the Arranger and Book Runner.
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Construction, Working Capital and Term Financing of the
Atlantica-1 Fiber-optic Submarine Cable System.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
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SECTION 1.01. Defined Terms............................................... 2
SECTION 1.02. Classification of Loans and Borrowings...................... 37
SECTION 1.03. Terms Generally............................................. 37
SECTION 1.04. Accounting Terms; GAAP...................................... 38
ARTICLE II
THE COMMITMENTS
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SECTION 2.01. Commitments................................................. 38
SECTION 2.02. Loans and Borrowings........................................ 39
SECTION 2.03. Requests for Borrowings..................................... 40
SECTION 2.04. Special Provisions for Working Capital Loans................ 41
SECTION 2.05. Letters of Credit........................................... 42
SECTION 2.06. Funding of Borrowings....................................... 46
SECTION 2.07. Interest Elections.......................................... 47
SECTION 2.08. Termination and Reduction of Commitments.................... 48
SECTION 2.09. Repayment of Loans; Evidence of Debt........................ 49
SECTION 2.10. Optional Prepayments of Loans............................... 51
SECTION 2.11. Mandatory Prepayments....................................... 52
SECTION 2.12. Fees........................................................ 54
SECTION 2.13. Interest.................................................... 55
SECTION 2.14. Alternate Rate of Interest; Illegality...................... 55
SECTION 2.15. Increased Costs............................................. 56
SECTION 2.16. Break Funding Payments...................................... 57
SECTION 2.17. Taxes....................................................... 58
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs. 59
SECTION 2.19. Mitigation Obligations; Replacement of Lenders.............. 61
ARTICLE III
REPRESENTATIONS AND WARRANTIES
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SECTION 3.01. Financial Condition......................................... 62
SECTION 3.02. No Change................................................... 62
SECTION 3.03. Organization; Powers........................................ 63
SECTION 3.04. Authorization; Enforceability............................... 63
SECTION 3.05. Corporate Structure......................................... 63
SECTION 3.06. Compliance with Law......................................... 63
SECTION 3.07. No Legal Bar................................................ 64
SECTION 3.08. Governmental Actions........................................ 64
SECTION 3.09. Litigation.................................................. 64
SECTION 3.10. Environmental Matters....................................... 64
SECTION 3.11. No Default; Event of Default................................ 64
SECTION 3.12. Properties.................................................. 64
SECTION 3.13. Taxes....................................................... 65
SECTION 3.14. Federal Regulations......................................... 65
SECTION 3.15. ERISA....................................................... 65
SECTION 3.16. Investment Company Act...................................... 65
SECTION 3.17. Security Documents.......................................... 65
SECTION 3.18. Principal Place of Business................................. 65
SECTION 3.19. Disclosure.................................................. 65
SECTION 3.20. Sufficiency of System Contracts............................. 66
SECTION 3.21. Immunity.................................................... 66
SECTION 3.22. Export Control.............................................. 66
SECTION 3.23. Foreign Corrupt Practices Act............................... 66
SECTION 3.24. Intellectual Property....................................... 66
SECTION 3.25. Year 2000 Compliance........................................ 67
SECTION 3.26. Subordination of Certain Payments........................... 67
ARTICLE IV
CONDITIONS
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SECTION 4.01. Conditions Precedent to Effectiveness....................... 67
SECTION 4.02. Conditions Precedent to Availability of Term D Loans and to
Initial Credit Extensions (other than Term D Loans)....... 72
SECTION 4.03. Conditions Precedent to All Credit Extensions............... 74
ARTICLE V
AFFIRMATIVE COVENANTS
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SECTION 5.01. Financial Statements and Other Information.................. 76
SECTION 5.02. Reports..................................................... 77
SECTION 5.03. Payment of Obligations...................................... 78
SECTION 5.04. Conduct of Business; System Completion...................... 78
SECTION 5.05. Existence................................................... 78
SECTION 5.06. Compliance with Laws........................................ 78
SECTION 5.07. Performance of Agreements................................... 79
SECTION 5.08. Taxes and Claims............................................ 79
SECTION 5.09. Notices..................................................... 79
SECTION 5.10. Insurance................................................... 79
SECTION 5.11. Fiscal Year................................................. 79
SECTION 5.13. Environmental Matters....................................... 80
SECTION 5.14. Operating Budgets; Operating Plans.......................... 80
SECTION 5.15. Governmental Actions........................................ 81
SECTION 5.16. Cooperation with Independent Engineer....................... 82
SECTION 5.17. Spare Parts................................................. 82
SECTION 5.18. Interest Rate Protection.................................... 82
SECTION 5.19. Revenue Account............................................. 82
SECTION 5.20. Maintenance of Process Agent................................ 82
SECTION 5.21. System Operation and Maintenance............................ 82
SECTION 5.22. Event of Loss............................................... 82
SECTION 5.23. Books and Records; Inspection Rights........................ 83
SECTION 5.24. Export Control.............................................. 83
SECTION 5.25. Foreign Corrupt Practices Act............................... 83
SECTION 5.26. Further Assurances.......................................... 83
SECTION 5.27. Intellectual Property....................................... 83
SECTION 5.28. Future Subsidiaries......................................... 84
SECTION 5.29. Post-Closing Collateral; Mortgages.......................... 85
SECTION 5.30. TBI......................................................... 86
SECTION 5.31. Achievement of Commercial Operation Date.................... 86
ARTICLE VI
NEGATIVE COVENANTS
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SECTION 6.01. Indebtedness................................................ 86
SECTION 6.02. Liens....................................................... 87
SECTION 6.03. Fundamental Changes......................................... 87
SECTION 6.04. Sale of Assets.............................................. 87
SECTION 6.05. Investments, Loans, Advances, Guarantees and Acquisitions... 88
SECTION 6.06. Restricted Payments......................................... 89
SECTION 6.07. Amendment of System Contracts, etc.......................... 89
SECTION 6.08. Supply Contract............................................. 90
SECTION 6.09. Addition to Configuration................................... 91
SECTION 6.10. Permitted System Upgrades................................... 91
SECTION 6.11. Leases...................................................... 92
SECTION 6.12. Change of Office............................................ 92
SECTION 6.13. Change of Name.............................................. 92
SECTION 6.14. Transactions with Affiliates................................ 92
SECTION 6.15. Sale and Leaseback.......................................... 92
SECTION 6.16. Approval of Additional Contracts............................ 92
SECTION 6.17. Capital Expenditures........................................ 93
SECTION 6.18. Limitations on Transfer and Issuance of Interests........... 93
SECTION 6.19. Unrelated Activities; Abandonment; New Subsidiaries......... 93
SECTION 6.20. Set-off..................................................... 94
SECTION 6.21. Changes in Capital Budget................................... 94
SECTION 6.22. Payment of Construction Costs............................... 94
SECTION 6.23. Sales of Capacity........................................... 94
SECTION 6.24. Financial Covenants......................................... 95
SECTION 6.25. Amendments, etc. of Organizational and Other Documents...... 96
SECTION 6.26. Management and Advisory Fees, etc........................... 96
SECTION 6.27. Immunity.................................................... 96
ARTICLE VII
EVENTS OF DEFAULT
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SECTION 7.01. Non-Payment of Obligations.................................. 96
SECTION 7.02. Breach of Warranty.......................................... 97
SECTION 7.03. Non-Performance of Certain Covenants and Obligations........ 97
SECTION 7.04. Involuntary Bankruptcy Proceeding, etc...................... 97
SECTION 7.05. Voluntary Bankruptcy Proceeding, etc........................ 98
SECTION 7.06. Judgments................................................... 98
SECTION 7.07. ERISA....................................................... 98
SECTION 7.08. Impairment of Security, etc................................. 98
SECTION 7.09. Commercial Operation........................................ 98
SECTION 7.10. Impairment of System Contract............................... 98
SECTION 7.11. Default Under System Contract............................... 99
SECTION 7.12. Liquidated Damages.......................................... 99
SECTION 7.13. Revocation of Landing License, etc.......................... 99
SECTION 7.14. Change in Control........................................... 99
SECTION 7.15. Default on Other Indebtedness............................... 99
SECTION 7.16. Delay in Construction or Installation....................... 100
SECTION 7.17. Term C Loan Guarantor....................................... 100
ARTICLE VIII
ACCOUNTS
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SECTION 8.01. Creation of Accounts........................................ 101
SECTION 8.02. Required Deposits into the Accounts......................... 101
SECTION 8.03. Deposits Held as Cash Collateral and Deposits in the
Borrower Equity Proceeds Account.......................... 103
SECTION 8.04. Source of Payments; Deposits Irrevocable.................... 104
SECTION 8.05. Books of Account; Statements................................ 104
SECTION 8.06. Location of the Accounts.................................... 104
SECTION 8.07. Construction Account........................................ 104
SECTION 8.08. Revenue Account............................................. 105
SECTION 8.09. Special Payment Account..................................... 110
SECTION 8.10. Debt Reserve Account........................................ 110
SECTION 8.11. Parent Interest Reserve Account............................. 110
SECTION 8.12. Operating Reserve Account................................... 111
SECTION 8.13. Insurance Proceeds Account.................................. 111
SECTION 8.14. Clean-Up Account............................................ 112
SECTION 8.15. Sales and Issuances Proceeds Account........................ 112
SECTION 8.16. Construction Contingency Reserve Account.................... 113
SECTION 8.17. Current Account............................................. 114
SECTION 8.18. Backhaul Reserve Account.................................... 114
SECTION 8.19. System Upgrade Reserve Account.............................. 114
SECTION 8.20. Subsidiary Accounts......................................... 114
SECTION 8.21. Borrower Equity Proceeds Account............................ 115
SECTION 8.22. Checking Accounts........................................... 115
SECTION 8.23. Release of Excess Amounts................................... 115
SECTION 8.24. Acceleration................................................ 116
SECTION 8.25. Investment.................................................. 116
SECTION 8.26. Value....................................................... 116
SECTION 8.27. Other Determinations; Additional Accounts................... 116
SECTION 8.28. Sales of Permitted Investments.............................. 116
SECTION 8.29. Available Cash.............................................. 117
SECTION 8.30. Purchaser Escrow Arrangements............................... 117
SECTION 8.31. Termination................................................. 117
SECTION 8.32. Conflicts With Other Loan Documents......................... 117
ARTICLE IX
THE ADMINISTRATIVE AGENT, OTHER AGENTS
AND AGENT RELATED PERSONS
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SECTION 9.01. Authorization and Action.................................... 117
SECTION 9.02. Exculpation of, and Reliance by, Agent Related Persons...... 118
SECTION 9.03. Agent Related Persons and Affiliates........................ 118
SECTION 9.04. Lender Credit Decision...................................... 119
SECTION 9.05. Indemnification............................................. 119
SECTION 9.06. Collateral and Guaranty Matters............................. 120
SECTION 9.07. Successor Administrative Agent.............................. 120
SECTION 9.08. Notice of Guaranty Draw..................................... 121
ARTICLE X
MISCELLANEOUS
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SECTION 10.01. Notices..................................................... 121
SECTION 10.02. Waivers; Amendments......................................... 122
SECTION 10.03. Expenses; Indemnity; Damage Waiver.......................... 123
SECTION 10.04. Successors and Assigns; Consent and Agreement............... 125
SECTION 10.05. Limited Recourse............................................ 128
SECTION 10.06. Survival.................................................... 128
SECTION 10.07. Counterparts; Integration; Effectiveness.................... 128
SECTION 10.08. Severability................................................ 129
SECTION 10.09. Right of Setoff............................................. 129
SECTION 10.10. Governing Law; Jurisdiction; Consent to Service of Process.. 129
SECTION 10.11. WAIVER OF JURY TRIAL........................................ 130
SECTION 10.12. Headings.................................................... 130
SECTION 10.13. Replacement of Independent Engineer or Insurance Consultant. 130
SECTION 10.14. Confidentiality............................................. 130
SCHEDULES
Schedule 1.01(a) -- Equity Investors
Schedule 1.01(b) -- Qualified Purchasers
Schedule 2.01 -- Lenders; Commitments
Schedule 2.09 -- Principal Amortization Table
Schedule 3.05(a) -- Borrower Capital Structure
Schedule 3.05(b) -- Subsidiaries
Schedule 3.08 -- Governmental Actions
Schedule 3.13 -- Taxes
Schedule 3.17 -- Collateral Filings
Schedule 3.18 -- Places of Business
Schedule 5.10 -- Insurance
EXHIBITS
Exhibit A-1 -- Form of Working Capital Note
Exhibit A-2 -- Form of Term Note
Exhibit B-1 -- Form of Borrowing Request
Exhibit B-2 -- Form of Issuance Request
Exhibit B-3 -- Form of Borrowing Certificate
Exhibit C -- Form of Continuation/Conversion Notice
Exhibit D -- Form of Assignment and Acceptance
Exhibit E -- Form of Parent Pledge Agreement
Exhibit F -- Form of Borrower Pledge and Security Agreement
Exhibit G -- Form of Subsidiary Pledge and Security Agreement
Exhibit H -- Form of Subsidiary Guaranty
Exhibit I -- Form of Closing Date Certificate
Exhibit J -- Form of Construction Progress Certificate
Exhibit K -- Form of Expense Certificate
Exhibit L -- Form of Article VIII Certificate
Exhibit M -- Form of Participation Certificate
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of July 14, 1999, among GLOBENET COMMUNICATIONS
HOLDINGS LTD., a company organized and existing under the laws of Bermuda (the
"Borrower"), the Lenders, TORONTO DOMINION (TEXAS) INC., as administrative agent
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for the Lenders (in such capacity, the "Administrative Agent") and Issuer,
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CREDIT SUISSE FIRST BOSTON, as syndication agent for the Lenders (in such
capacity, the "Syndication Agent"), and TD SECURITIES (USA) INC., as arranger
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(in such capacity, the "Arranger").
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W I T N E S S E T H :
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WHEREAS, capitalized terms used herein (including the preamble above) and
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not otherwise defined herein shall have the meanings assigned to them in Section
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1.01 of this Agreement;
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WHEREAS, the Borrower (together with one or more of the Subsidiaries)
proposes to develop, construct, own, provide and sell capacity on a four fiber
pair, fiber-optic submarine cable system to be known as the Atlantica-1
Submarine Cable System, which is intended to be used to provide direct
telecommunications service between and among the United States mainland,
Bermuda, Venezuela and Brazil, and shall include within it the previously
constructed two fiber pair, fiber-optic submarine cable system known as BUS-1;
WHEREAS, in order to provide for the design, development, construction and
installation of the System, ANBL has entered into the Supply Contract with the
Contractor;
WHEREAS, the Contractor's obligations under the Supply Contract are being
guaranteed by the Supply Contract Guarantor pursuant to, and subject to the
limitations set forth in, the Supply Contract Guaranty;
WHEREAS, in order to finance a portion of the design, development,
construction and installation of the System, Parent, the Borrower's parent, has
(a) issued equity to the Equity Investors and (b) issued the Parent Senior
Notes, and has agreed, in turn, to make cash equity contributions to the
Borrower with the proceeds of such issuances in an aggregate amount equal to the
Net Equity Funding Commitment;
WHEREAS, in order to finance the remaining portion of the design,
development, construction and installation of the System and for other purposes
as set forth herein, the Borrower is entering into this Agreement pursuant to
which the Lenders and the Issuer have
agreed, subject to the terms and conditions set forth herein, to make certain
Credit Extensions to the Borrower; and
WHEREAS, as a condition to and in furtherance of the foregoing, and in
order to secure and support the Borrower's obligations to the Lenders and the
Issuer under the Loan Documents, Parent, the Borrower and the Subsidiaries will
enter into the Security Documents to which they are parties, the Subsidiaries
will enter into the Subsidiary Guaranty and the Term C Loan Guarantor will enter
into the Term C Loan Guaranty;
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, hereby agree as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.01. Defined Terms. As used in this Agreement, the following
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terms shall have the meanings specified below:
"ABR" when used in reference to any Loan or Borrowing, refers to whether
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such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Accounts" means, collectively, the Construction Account, the Revenue
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Account, the Special Payment Account, the Debt Reserve Account, the Parent
Interest Reserve Account, the Operating Reserve Account, the Insurance Proceeds
Account, the Clean-Up Account, the Sales and Issuances Proceeds Account, the
Construction Contingency Reserve Account, the Current Account, the Backhaul
Reserve Account, the System Upgrade Reserve Account, the Subsidiary Accounts and
each other collateral account created hereunder, together with each sub-account
of such accounts, established and maintained pursuant to Article VIII. Accounts
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shall not include the Borrower Equity Proceeds Account or any Checking Account.
"Additional Contracts" means any contract entered into by the Borrower or
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any Subsidiary after the Closing Date (other than the OA&M Agreement, any
Intercompany Agreement, employment contracts and contracts involving less than
$1,000,000 annually).
"Additional Material Contract" means each Additional Contract designated as
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an Additional Material Contract" in accordance with Section 6.16.
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"Additional Non-Material Contract" means each Additional Contract
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designated as an AAdditional Non-Material Contract" in accordance with Section
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6.16.
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"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
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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" is defined in the preamble and includes each of its
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successors hereunder.
"Affiliate" means, with respect to a specified Person, another Person
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(other than a subsidiary of the Person specified) that directly, or indirectly
through one or more intermediaries, Controls or is Controlled by or is under
common Control with the Person specified.
"Agent Related Persons" means the Administrative Agent, the Syndication
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Agent, the Issuer, the Arranger and their respective officers, directors,
partners, agents, employees and Affiliates and Subsidiaries.
"Agreement" means, on any date, this Credit Agreement as originally in
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effect on the Closing Date and as thereafter amended, supplemented, amended and
restated or otherwise modified from time to time and in effect on such date.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
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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%. 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.
"ANBL" means Atlantica Network (Bermuda) Ltd., a company organized and
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existing under the laws of Bermuda and a direct, wholly-owned subsidiary of the
Borrower.
"Applicable Percentage" means, with respect to any Lender, the percentage
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of the total Commitments represented by such Lender's Commitments; provided
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that, for purposes of this definition, Lenders obligated to purchase
participations in Working Capital Loans pursuant to Section 2.04(a) shall be
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deemed to have a Working Capital Loan Commitment in an amount (the
"Participation Amount") equal to such participation obligations, and the Working
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Capital Lenders' Working Capital Loan Commitments shall be deemed to be ratably
reduced by such participation obligations. If the Commitments have terminated
or expired, the Applicable Percentages shall be determined based upon the
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day, (a) for Working Capital Loans, Term A
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Loans, Term B Loans and Term C Loans, 2.50% with respect to any ABR Loans and
3.50% with respect to any Eurodollar Loans, and (b) for Term D Loans, 3.00% with
respect to any ABR Loans and 4.00% with respect to any Eurodollar Loans. The
Applicable Rate for Working Capital Loans, Term A Loans, Term B Loans and Term C
Loans shall be reduced in each case
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by .25% per annum from and after the date upon which the aggregate outstanding
principal amount of Term Loans and Term Loan Commitments is reduced as a result
of repayments and reductions thereof to less than or equal to $280,000,000, and
shall be reduced by an additional .25% per annum from and after the date upon
which the aggregate outstanding principal amount of Term Loans and Term Loan
Commitments is reduced as a result of repayments and reductions thereof to less
than or equal to $165,000,000; provided that, if on the date the aggregate
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outstanding principal amount of the Term Loans is so reduced, a Designated Event
or Default shall have occurred and be continuing, the Applicable Rate shall not
be reduced as aforesaid until the date no Designated Event or Default shall have
occurred and be continuing.
"Arranger" is defined in the preamble.
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"Article VIII Certificate" means each certificate of the Borrower,
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substantially in the form of Exhibit L, delivered pursuant to Article VIII.
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"Assignment and Acceptance" means an assignment and acceptance entered into
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by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent,
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substantially in the form of Exhibit D or any other form approved by the
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Administrative Agent.
"Availability Period" means,
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(a) with respect to any Working Capital Loan (other than a Working
Capital Loan made to reimburse an LC Disbursement in accordance with
Section 2.05(e)), the period from and including the Closing Date to, but
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excluding, the earlier of (i) if the Commercial Operation Date does not
occur prior to the Guaranteed Completion Date, the Guaranteed Completion
Date, and (ii) the Maturity Date;
(b) with respect to any Working Capital Loan made to reimburse an LC
Disbursement under any Letter of Credit in accordance with Section 2.05(e),
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the period from and including the date the related Letter of Credit is
issued to, but excluding, the earliest of (i) the date such Letter of
Credit is terminated in accordance with its terms (other than by reason of
a drawing thereunder), (ii) the date such LC Disbursement is reimbursed in
accordance with Section 2.05(e) from funds other than the proceeds of a
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Loan, (iii) the date which is five Business Days after the date the
Borrower receives notice of such LC Disbursement and (iv) the Maturity
Date;
(c) with respect to Term A Loans, the period from and including the
Closing Date to, but excluding, the Guaranteed Completion Date; provided
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that up to $15,000,000 in aggregate principal amount of Term A Loans may be
made after the Commercial Operation Date to but excluding the date that is
six months after the Commercial Operation Date for the purposes of paying
interest on the Loans, making intercompany advances to Parent (evidenced by
intercompany promissory notes pledged to the Secured Parties) so long as no
Blockage Event has occurred and is continuing to pay interest on
-4-
the Parent Senior Notes and any Parent Additional Notes, and to pay
Backhaul Service Costs, subject in any event to Section 4.03 (including
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Section 4.03(h));
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(d) with respect to Term B Loans, the period from and including the
Closing Date to, but excluding, the earliest of (i) if the Commercial
Operation Date does not occur prior to the Guaranteed Completion Date, the
Guaranteed Completion Date, (ii) if the Commercial Operation Date does
occur prior to the Guaranteed Completion Date, the date on which the
Contractor has received payment in full of all amounts due under the Supply
Contract, and (iii) the Commercial Operation Date; and
(e) with respect to Term C Loans, the period from and including the
Closing Date to, but excluding, the earliest of (i) if the Commercial
Operation Date does not occur prior to the Guaranteed Completion Date, the
Guaranteed Completion Date, (ii) if the Commercial Operation Date does
occur prior to the Guaranteed Completion Date, the date on which the
Contractor has received payment in full of all amounts due under the Supply
Contract, and (iii) the Commercial Operation Date.
(f) with respect to Term D Loans, the period from and including the
Closing Date to, but excluding, the earliest of (i) the date of completion
of syndication of the Term D Commitment and (iii) September 30, 1999.
"Backhaul Capacity" means capacity on inland telecommunication systems
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which can be connected (directly or indirectly) to any cable station on the
System.
"Backhaul Reserve Account" means the special account designated by that
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name established by the Administrative Agent pursuant to Section 8.01(a).
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"Backhaul Service" means the acquisition and the sale, lease and other
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disposition of Backhaul Capacity, and activities incidental thereto.
"Backhaul Service Costs" means all costs of the Borrower and the
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Subsidiaries directly and solely related to the acquisition of Backhaul Capacity
and the related payments in respect of OA&M Expenses.
"Backhaul Service Revenue" means the cash revenue (net of sales
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commissions) received by the Borrower and the Subsidiaries from the sales or
swaps of Backhaul Capacity and from related payments in respect of operation,
administration and maintenance charges from customers, but, in any event,
without duplication with respect to payments received by the Subsidiaries from
the Borrower or any Subsidiary under any Intercompany Agreement.
"Blockage Event" means the occurrence and continuance of (a) a Default
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arising under Section 7.01, 7.04 or 7.05, (b) a Default arising under Section
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7.11 (but only if such Default is with respect to the Operator or the Contractor
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during the period of time the Operator or the Contractor, as the case may be, is
being replaced in accordance with the terms of such
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Section 7.11, (c) an Event of Default arising under Section 7.03 with respect
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only to the covenants contained in Article VI, (d) an Event of Default arising
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under Sections 7.09 or 7.13, in each case, upon the affirmative vote of the
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Majority Lenders, or (e) an Event of Default arising under Section 7.14.
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"Board" means the Board of Governors of the Federal Reserve System of the
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United States of America.
"Borrower" is defined in the preamble.
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"Borrower Equity Proceeds Account" means the special account established by
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the Administrative Agent pursuant to Section 8.01(c).
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"Borrower Pledge and Security Agreement'" means the Pledge and Security
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Agreement, dated as of the date hereof, substantially in the form of Exhibit F,
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made by the Borrower in favor of the Secured Parties, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time, including as supplemented by the Foreign Subsidiary Pledge Supplements.
"Borrowing" means Loans of the same Class and Type, made, converted or
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continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"Borrowing Certificate" means a certificate of the Borrower, substantially
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in the form of Exhibit B-3.
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"Borrowing Date" means the last Business Day of each calendar month.
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"Borrowing Request" means a notice from the Borrower, substantially in the
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form of Exhibit B-1. Each Borrowing Request shall specify the information
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specified in Section 2.03 and set forth (a) all costs which have been incurred
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and which are to be paid with the proceeds of the proposed Borrowing (with all
applicable invoices attached) and (b) that the proposed Borrowing will not
violate or conflict with any other agreement to which the Borrower, any of the
Subsidiaries or Parent is a party, including the Term C Loan Guaranty
Reimbursement Agreement (during any Term C Loan Guaranteed Period) and the
Parent Senior Note Documents, accompanied by calculations in reasonable detail
of remaining baskets available for Indebtedness and related matters. The final
Borrowing Request delivered at the end of the Availability Period shall include
a statement certifying all costs set forth in the Capital Budget which have not
yet been funded, which costs will be prefunded into the Clean-Up Account.
"BUS-1" means the two fiber pair, fiber-optic cable system known as ABUS-
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1", with an initial capacity of 20 Gb/s, with one working fiber pair and one
protective fiber pair, connecting St. David's, Bermuda and Tuckertown, New
Jersey.
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"Business Day" means any day that is not a Saturday, Sunday or other day on
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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,
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the term "Business Day" shall also exclude any day on which banks are not open
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for dealings in dollar deposits in the London interbank market.
"Capacity" means, collectively, System Capacity and Backhaul Capacity.
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"Capacity Revenue" means, collectively, System Capacity Revenue and
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Backhaul Service Revenue.
"Capacity Sales Agreements" means all agreements for the sale or lease or
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other disposition of Capacity entered into between the Borrower or any
Subsidiary and any other Person, expressly permitting the Lien of the
Administrative Agent thereon with respect to the Borrower's and the applicable
Subsidiaries' interests in such agreements, as each may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with and subject to the terms and conditions hereof.
"Capacity Swap Agreements" means all agreements for the exchange of
------------------------
Capacity on the System for capacity or rights of use on other telecommunications
systems, all expressly permitting the Lien of the Administrative Agent thereon
with respect to the Borrower's and the applicable Subsidiaries' interests in
such agreements, as each may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with and subject to the terms
and conditions hereof.
"Capital Budget" is defined in Section 4.01(h).
-------------- ---------------
"Capital Costs" means all costs and expenses incurred or to be incurred by
-------------
the Borrower or any Subsidiary in connection with the design, development,
installation, construction, completion, start-up and testing of the System (and
shall include, in any event, all interest and other financing costs during
construction incurred or to be incurred by the Borrower, any Subsidiary (if
permitted pursuant to Section 6.01) and the Parent (pursuant to the Parent
------------
Senior Note Documents)), all payments under Hedging Agreements and all OA&M
Expenses, SG&A Expenses and Term C Loan Guaranty Fees with respect to the System
to the extent set forth in the Capital Budget, all of the above as set forth in
the then current Capital Budget.
"Capital Lease Obligations" of any Person, means the obligations of such
-------------------------
Person 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.
"Casualty Proceeds" means all payments received by the Administrative
-----------------
Agent, the
-7-
Borrower or any Subsidiary from any insurer in respect of casualty to or loss of
property, all awards and proceeds in respect of a taking, but excluding business
interruption insurance or delayed opening of business insurance and payments in
respect of liability policies.
"Casualty Proceeds Deposits" is defined in Section 8.13(a).
-------------------------- ---------------
"Certificate of Commercial Acceptance" is defined in the Supply Contract.
------------------------------------
"Certificate of Final Acceptance" is defined in the Supply Contract.
-------------------------------
"Certificate of Provisional Acceptance" is defined in the Supply Contract.
-------------------------------------
"Change in Control" means and shall be deemed to have occurred if (a) there
-----------------
shall occur any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Borrower and the Subsidiaries (other than sales of Capacity) to any Person or
group of related Persons for purposes of Section 13(d) of the Securities
Exchange Act of 1934, as amended (a "Group"), together with any Affiliates
-----
thereof; (b) the holders of Equity Interests of the Borrower shall approve any
plan or proposal for the liquidation or dissolution of the Borrower; (c) any
Person or Group (other than the Permitted Holders) shall become, after the
Closing Date, the owner, directly or indirectly, beneficially or of record, of
Voting Interests representing more than 35% of the total voting power of all
Voting Interests of Parent or the Borrower; (d) any AChange of Control" as
defined in the Parent Senior Note Documents shall occur; (e) the Borrower shall
cease to be a 100% owned, direct subsidiary of Parent, with all ownership
interests in the Borrower held by all Persons free and clear of all consensual
Liens except Liens in favor of the Administrative Agent (for the benefit of the
Secured Parties); (f) Parent shall cease to control a majority of the seats on
the Board of Directors of the Borrower; or (g) the six Equity Investors with the
largest ownership interest in Parent on the Closing Date, as set forth on
Schedule 1.01(a), together with their respective Affiliates, shall cease to own
----------------
and control, directly, at least 51% of all the Voting Interests and ownership
interests on a fully diluted basis in Parent, other than as a result of one or
more public offerings of common stock of Parent or as a result of dilution from
primary issuances of common stock of Parent, so long as, in any event, no Person
or Group (other than the Permitted Holders) shall become, after the Closing
Date, the owner, directly or indirectly, beneficially or of record of voting or
ownership interests which are larger than the aggregate voting and ownership
interests of the three of the six Equity Investors with the largest ownership
interest in Parent on the Closing Date, as set forth on Schedule 1.01(a),
----------------
together with the interests of their respective Affiliates.
"Change in Law" means (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, any parent of any Lender or the
Issuer 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).
-8-
"Checking Accounts" is defined in Section 8.22.
----------------- ------------
"Class" when used in reference to any Loan or Borrowing, refers to whether
-----
such Loan, or the Loans comprising such Borrowing, are Working Capital Loans or
Term Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Working Capital Loan Commitment or a Term Loan Commitment.
"Clean-Up Account" means the special account designated by that name
----------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Closing Date" means the date on which this Agreement shall have been
------------
executed and delivered by the parties hereto and the conditions specified in
Section 4.01 have been satisfied or waived.
------------
"Closing Date Certificate" means a certificate of a Responsible Officer of
------------------------
the Borrower, substantially in the form of Exhibit I.
---------
"Code" means the United States Internal Revenue Code of 1986, as amended
----
from time to time.
"Collateral" means any and all ACollateral" as defined in any applicable
----------
Security Document; provided that, notwithstanding anything to the contrary
--------
herein or therein, Collateral shall not include the Net Equity Proceeds, the
Parent Senior Note Proceeds, the proceeds of the Parent Post-Closing Equity
Offering, the proceeds of the Parent Terrestrial Build-Out Offering, the
proceeds of the Parent Additional Senior Note Offering, amounts on deposit in
the Borrower Equity Proceeds Account, amounts on deposit in the Checking
Accounts and all interest earned on all of the foregoing.
"Commercial Operation Date" means the earlier of (a) the date the
-------------------------
Certificate of Commercial Acceptance is issued with respect to the System and
(b) the date the Certificate of Provisional Acceptance is issued with respect to
the System.
"Commitment" means the Working Capital Loan Commitment, the Term A Loan
----------
Commitment, the Term B Loan Commitment, the Term C Loan Commitment or the Term D
Loan Commitment, or a combination thereof (as the context requires).
"Commitment Letter" means the commitment letter, dated July 8, 1999, from
-----------------
the Arranger and the Syndication Agent to Parent, the Borrower, TBI and ANBL.
"Confidential Memorandum" means the Confidential Information Memorandum,
-----------------------
dated July, 1999, with respect to the GlobeNet Communications Holdings Ltd.
US$400,000,000 Senior Secured Credit Facilities distributed by the Arranger.
"Consolidated Interest Expense" means, with respect to the Borrower and the
-----------------------------
-9-
Subsidiaries for any period, the sum of (a) gross interest expense (including
all cash and accrued interest expense) of the Borrower and the Subsidiaries for
such period on a consolidated basis and (b) interest on the Parent Senior Notes
and any Parent Additional Notes paid by Parent during such period.
"Consolidated Net Income" means, for any period for a Person, net income of
-----------------------
such Person and its subsidiaries determined on a consolidated basis in
accordance with GAAP for such period.
"Construction Account" means the special account designated by that name
--------------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Construction Contingency Reserve Account" means the special account
----------------------------------------
designated by that name established by the Administrative Agent pursuant to
Section 8.01(a).
---------------
"Construction Progress Certificate" means a certificate from the Contractor
---------------------------------
(and countersigned by ANBL and the Independent Engineer), substantially in the
form of Exhibit J.
---------
"Consultants" means, collectively, the Independent Engineer, the Market
-----------
Consultant and the Insurance Consultant.
"Contest" means, with respect to any Tax, Lien, claim or obligation, a
-------
contest pursued in good faith and by appropriate proceedings diligently
conducted, so long as (a) adequate reserves in accordance with GAAP have been
established with respect thereto, (b) no Lien shall have been filed in
connection therewith or any Lien filed in connection therewith shall have been
removed from the record by the bonding thereof and (c) 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" means a request by the Borrower to convert
------------------------------
or continue a Working Capital Loan or a Term Loan in accordance with Section
-------
2.07, substantially in the form of Exhibit C.
---- ---------
"Contractor" means, collectively, Alcatel Submarine Networks, a societe
----------
anonyme organized and existing under the laws of France, and Alcatel Submarine
Networks, Inc., a corporation organized and existing under the laws of the state
of Delaware.
"Contractor Consent" means the Consent and Agreement, dated as of the date
------------------
hereof, among the ANBL, the Contractor and the Administrative Agent with respect
to the assignment by the Borrower of its rights and interests under the Supply
Contract, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or any agreement, instrument, judgment, order,
decree or other undertaking to
-10-
which such Person is a party or by which it or any of its property is bound.
"Contract Variation" means any amendment, supplement, waiver, consent or
------------------
other modification to the Supply Contract and shall include any AContract
Variation" as such term is defined in the Supply Contract.
"Control" means 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 10% or more of the Voting Interests with respect to a
Person. "Controlling" and "Controlled" have meanings correlative thereto.
----------- ----------
"Credit Extension" means, as the context may require, (a) the making of a
----------------
Loan by a Lender or (b) the issuance of any Letter of Credit, or the extension
of any expiration date of any previously issued Letter of Credit, by the Issuer.
"Current Account" means the special account designated by that name
---------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Debt Reserve Account" means the special account designated by that name
--------------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Debt Reserve Amount" means, at any time of determination, an amount equal
-------------------
to six months of anticipated interest on the Loans using the interest rate in
effect as of such date with respect to the Loans plus an amount equal to the
next scheduled principal payment on the Loans.
"Debt Service" means, as of any date of determination, (a) all scheduled
------------
principal, interest (determined by multiplying the amount of Indebtedness (other
than any intercompany Indebtedness) outstanding on such date by the applicable
interest rate on such date), commitment fee (determined by multiplying the
amount of the unused portion of the Commitments as of such date by the rate set
forth in Section 2.12(a)) and similar items required to be paid in cash by the
---------------
Borrower and the Subsidiaries on Indebtedness on a pro forma basis over the next
--- -----
four fiscal quarters commencing after such date (excluding amounts paid under
Rate Protection Agreements and amounts due under the Supply Contract) plus (b)
----
all interest scheduled to be paid in cash by Parent on the Parent Senior Notes
and on any Parent Additional Notes on a pro forma basis over the next four
--- -----
fiscal quarters commencing after such date.
"Debt Service Coverage Ratio" means, on any date of determination, the
---------------------------
ratio of (a) EBITDA for the twelve-month period ended on such date for which
financial statements are available to (b) Debt Service as of such date.
"Default" means 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.
-11-
"Defaulting Lender" means any Lender with respect to which a Lender Default
-----------------
is in effect.
"Designated Agents" means, collectively, the Administrative Agent and the
-----------------
Syndication Agent.
"Designated Event" means, as of any Principal Payment Date, the Borrower's
----------------
failure to be in compliance with Section 6.24 as of such Principal Payment Date,
------------
as set forth in the certificate delivered by the Borrower to the Administrative
Agent in accordance with Section 5.02(c), or the failure of the Borrower to
---------------
deliver such a certificate when required under Section 5.02(c), and such
---------------
Designated Event shall be deemed to continue until such time as the Borrower
shall have delivered a certificate under Section 5.02(c) indicating compliance
---------------
with Section 6.24 and the Borrower shall in fact be in compliance with Section
------------ -------
6.24.
----
"Dispute Account" is defined in the Supply Contract.
---------------
"Dollars" or "$" means the lawful money of the United States of America.
------- -
"EBITDA" means, for any period for a Person, Consolidated Net Income for
------
such period of such Person, plus, without duplication and (other than with
----
respect to amounts included in clause (b) of the definition of Consolidated
----------
Interest Expense) to the extent deducted from revenue in determining
Consolidated Net Income for such period (a) the aggregate amount of Consolidated
Interest Expense for such period, (b) the aggregate amount of letter of credit
fees paid during such period, (c) the aggregate amount of income tax expense for
such period, (d) all amounts attributable to depreciation and amortization for
such period and (e) all non-cash, non-recurring charges during such period, and
minus or plus, without duplication and to the extent added to revenue in
----- ----
determining Consolidated Net Income for such period, all non-cash, non-recurring
gains or losses during such period, in each case determined in accordance with
GAAP.
"Environmental Laws" means all applicable laws, rules, permits, orders and
------------------
regulations relating to the protection of the environment and natural resources,
and all similar items under the laws of each jurisdiction (including the United
States, Bermuda, Venezuela and Brazil), where the Borrower and the Subsidiaries
are incorporated and/or operate.
"Environmental Liability" means any liability, contingent or otherwise
-----------------------
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law
or (b) the release or threatened release of any Hazardous Materials into the
environment.
"Equity Contributions" means each contribution of cash equity by Parent to
--------------------
the Borrower to fund the development, construction, installation or ownership of
the System.
"Equity Funding Commitment" means $540,000,000.
-------------------------
-12-
"Equity Interests" means any and all shares, interests, participation,
----------------
membership interests 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).
"Equity Investors" means the Persons listed on Schedule 1.01(a).
---------------- ----------------
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"ERISA Affiliate" means any entity (whether or not incorporated) that,
---------------
together with the Borrower, 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 Aaccumulated 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 Borrower 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 Borrower 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 Borrower 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 Borrower 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.
"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.
"Event of Default" is defined in Article VII.
---------------- -----------
"Event of Loss" means (a) the actual loss or constructive total loss of all
-------------
or substantially all of any Segment of the System or (b) the loss, destruction
or damage of any material portion of a Segment of the System.
"Excess Cash Flow" means, for each semi-annual period ending on a Principal
----------------
Payment
-13-
Date (or, with respect to the initial Principal Payment Date, the period
from the Commercial Operation Date to the initial Principal Payment Date), all
cash Revenue received during such period by the Borrower and the Subsidiaries
and available to the Borrower from the Revenue Account after the application of
the amounts set forth in clauses first through seventh of Section 8.08(d) in
------------- ------- ---------------
accordance with the terms of Article VIII.
------------
"Excluded Taxes" means, with respect to the Administrative Agent, any other
--------------
Agent, any Lender, the Issuer or any other recipient of any payment to be made
by or on account of any obligation of the Borrower hereunder, (a) Taxes imposed
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 or Taxes imposed as a result of the
recipient conducting activities in such jurisdiction unrelated to the Credit
Extensions, (b) any branch profits Taxes imposed by the United States or any
similar Tax imposed by any other jurisdiction in which any Lender's principal
office or applicable lending office is located and (c) in the case of a Lender,
any United States federal withholding Tax that is imposed on interest payable to
such Lender hereunder unless, subject to Section 10.04 with respect to
-------------
assignees, (i) such withholding Tax is the result of a Change in Law and (ii)
such Lender has complied with the provisions of Section 2.17(e).
---------------
"Expense Certificate" means each certificate of the Borrower, substantially
-------------------
in the form of Exhibit K, delivered pursuant to Section 8.08(b).
--------- ---------------
"Federal Funds Effective Rate" means, 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 Letters" means, collectively, the fee letters, each dated July 8,
-----------
1999, among (a) the Arranger, Parent, the Borrower, TBI and ANBL, and (b) the
Syndication Agent, Parent, the Borrower, TBI and ANBL.
"Filing Statements" means all UCC financing statements (Form UCC-1) or
-----------------
other similar financing statements and UCC termination statements (Form UCC-3)
required to be executed, delivered and filed pursuant to the Loan Documents.
"Foreign Subsidiary Pledge Supplements" means all supplements to the
-------------------------------------
Borrower Pledge and Security Agreement and/or the Subsidiary Pledge and Security
Agreement in respect of Subsidiaries of the Borrower incorporated outside the
United States of America, in form and substance reasonably satisfactory to the
Administrative Agent, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
-14-
"GAAP" means generally accepted accounting principles in the United States
----
of America.
"GCL" means GlobeNet Communications Limited, a company organized and
---
existing under the laws of Bermuda and a direct, wholly-owned subsidiary of the
Borrower.
"Governmental Action" means all permits, authorizations, registrations,
-------------------
consents, approvals, notices and licenses of or with any Governmental Authority
that are required in connection with the construction, installation and
operation of the System, including all Landing Licenses.
"Governmental Authority" means the government of any nation (including the
----------------------
United States of America) 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.
"Guarantee" of or by any Person (the "guarantor") means 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 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 Guarantee shall not include endorsements for
--------
collection or deposit in the ordinary course of business.
"Guaranteed Completion Date" means, if the Rio Ring Option is exercised,
--------------------------
December 31, 2001, otherwise, June 30, 2001.
"Hazardous Materials" means all materials defined as hazardous substances
-------------------
under the Federal Comprehensive Environmental Response, Compensation and
Liability Act, petroleum or petroleum distillates, or friable asbestos or
friable asbestos containing materials, and all similar items under the laws of
each jurisdiction (including the United States, Bermuda, Venezuela and Brazil)
where the Borrower and the Subsidiaries are incorporated and/or operate.
"Hedging Agreement" means 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;
provided that copies of any such agreements are provided to the Administrative
--------
Agent promptly after execution thereof.
-15-
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (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 accounts payable incurred in the ordinary course of business), (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, (e) all Guarantees by such Person of
Indebtedness of others, (f) all Capital Lease Obligations of such Person, (g)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (h) all obligations under
Hedging Agreements and (i) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances.
"Indemnified Taxes" means Taxes other than (a) Excluded Taxes and (b) Other
-----------------
Taxes.
"Independent Engineer" means iT-International Telecom Ltd. or such other
--------------------
engineer or engineering firm as may be appointed by the Administrative Agent in
accordance with Section 10.13 and the Supply Contract.
-------------
"Initial Contract Price" is defined in the Supply Contract.
----------------------
"Initial Principal Payment Date" means December 31, 2001 (or if such day is
------------------------------
not a Business Day, the immediately preceding Business Day).
"Insurance Consultant" means Sedgwick & Sedgwick or such other insurance
--------------------
consulting firm as may be appointed by the Administrative Agent in accordance
with Section 10.13.
-------------
"Insurance Proceeds Account" means the special account designated by that
--------------------------
name established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Intercompany Agreement" means each agreement among or between the Borrower
----------------------
and/or one or more of the Subsidiaries with respect to, among other things, the
allocation of Revenue, OA&M Expenses and SG&A Expenses, in form and substance
reasonably satisfactory to the Administrative Agent, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time in
accordance with and subject to the terms and conditions hereof.
"Interconnect Agreements" means each agreement entered into by the Borrower
-----------------------
and/or the Subsidiaries with another Person providing for the connection of the
System to any other fiber-optic networks, including Backhaul interconnections.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
---------------------
Business Day of each March, June, September and December 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
-16-
the case of a Eurodollar Borrowing with an Interest Period of more than three
months' duration, each day prior to the last day of such Interest Period that
occurs at intervals of three months' duration after the first day of such
Interest Period.
"Interest Period" means, 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, six or, if
available to all Lenders, nine months thereafter, as the Borrower may elect;
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 and
(c) Interest Periods shall be selected so that sufficient funds are available
without breakage to make scheduled amortization payments on the Loans. 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.
"Issuance Request" means a Letter of Credit request and certificate duly
----------------
executed by the Borrower, substantially in the form of Exhibit B-2.
-----------
"Issuer" means Toronto Dominion (Texas) Inc. and/or any of its Affiliates
------
reasonably satisfactory to the Borrower, in its capacity as the issuer of the
Letters of Credit hereunder, and its successors in such capacity as provided in
Section 2.05(i).
---------------
"Landing Countries" means, at any time of determination, each country in
-----------------
which the System is landed or planned to land at such time. As of the date of
this Agreement, the System is planned to land in the United States of America,
Bermuda, Venezuela and Brazil.
"Landing License" means, with respect to any Landing Country, the
---------------
telecommunications license (if a license is required) issued by a Governmental
Authority in such Landing Country permitting the System to land in such Landing
Country.
"LC Disbursement" means a payment made by the Issuer pursuant to a Letter
---------------
of Credit.
"LC Exposure" means, at any time of determination, the sum of (a) the
-----------
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time, but LC Exposure does
not include any ABR Working Capital Borrowing referred to in Section 2.05(e).
---------------
The LC Exposure of any Lender at any time of determination shall be its
Applicable Percentage of the total LC Exposure at such time.
"Lender Default" means (a) the refusal (which has not been retracted) of a
--------------
Lender to
-17-
make available its portion of any Borrowing or to fund its portion of
any unreimbursed payment under Section 2.05(e) or (b) a Lender having notified
---------------
the Administrative Agent and/or the Borrower that it does not intend to comply
with its obligations under Section 2.01 or under Section 2.05, in the case of
------------ ------------
either clause (a) or clause (b) above, as a result of the appointment of a
---------- ----------
receiver or conservator with respect to such Lender at the direction or request
of any regulatory agency or authority.
"Lenders" means the financial institutions and other Persons listed on
-------
Schedule 2.01 as lenders hereunder and any other Person that shall become a
-------------
party hereto as a lender hereunder pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto as a lender pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
----------------
Agreement.
"LIBO Rate" means, 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 rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal New York office of each Reference Lender in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset (a) any mortgage, deed of trust,
----
lien, pledge, hypothecation, encumbrance, charge, 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.
"Liquidated Damages" means payments made by the Contractor or the Supply
------------------
Contract Guarantor under Article 22 of the Supply Contract.
"Loan Documents" means, collectively, this Agreement, the Notes, the Fee
--------------
Letters, the Security Documents, the Term C Loan Guaranty, the Subsidiary
Guaranty, each Rate Protection Agreement, any certificate issued or delivered
pursuant to any of the foregoing documents and any other document which sets
forth that it is to be considered a "Loan Document".
-18-
"Loan Parties" means, collectively, Parent, the Borrower and each
------------
Subsidiary.
"Loans" means, collectively, the Working Capital Loans and the Term Loans.
-----
"Majority Lenders" means, at any time of determination, Non-Defaulting
----------------
Lenders having Working Capital Exposures, LC Exposure, outstanding Term Loans
and unused Commitments representing more than 51% of the sum of the total
Working Capital Exposures, LC Exposure, outstanding Term Loans, and unused
Commitments of such Non-Defaulting Lenders at such time.
"Market Consultant" means IBM Global Services or such other market
-----------------
consultant firm as may be appointed by the Borrower and the Administrative
Agent.
"Material Adverse Effect" means a material adverse effect on (a) the System
-----------------------
or the ownership thereof, (b) the business, assets, revenues, results of
operations, financial condition or, until the Closing Date, prospects (to the
extent such effect is actually known to the Borrower and not disclosed in the
Offering Memorandum) of the Borrower and the Subsidiaries taken as a whole, (c)
the ability to achieve the Commercial Operation Date by the Guaranteed
Completion Date, (d) the ability of (i) the Borrower, (ii) any of the
Subsidiaries (other than immaterial Subsidiaries identified as such by the
Designated Agents), (iii) the Contractor, (iv) the Supply Contract Guarantor or
(v) the Term C Loan Guarantor (only during any Term C Loan Guaranteed Period),
to perform their respective obligations under the Loan Documents or the Systems
Contracts to which it is a party or (e) the validity or enforceability of the
Loan Documents or the Lenders' rights and remedies under the Loan Documents.
"Material Impact" means (a) a material adverse effect on the Lenders, (b) a
---------------
material adverse effect on the Collateral contemplated on the date hereof to be
granted to the Administrative Agent (including under Section 5.29, but excluding
------------
Collateral not comprising the System as contemplated on the date hereof), or the
Lenders' position with respect thereto, (c) a Material Adverse Effect, (d) an
adverse effect on the revenues of the Borrower and the Subsidiaries taken as a
whole or (e) a material delay in obtaining, or a material risk in not obtaining,
or in the termination or revocation of, a material Governmental Action necessary
to complete or operate the System as contemplated on the date hereof.
"Material Operating Budget Deviation" means, with respect to the Operating
-----------------------------------
Budget for any Operating Year, the payment of any OA&M Expense which would
result in total operating costs for such Operating Year (after giving effect to
all other payments of OA&M Expenses in such Operating Year, including all other
cost overruns and underruns or other savings with respect to any budget
category) exceeding the total operating costs set forth in the Operating Budget
for such Operating Year, and such excess, when added to the "Cumulative
Overruns" for all prior Operating Years, would exceed an amount equal to 15% of
the ABenchmark Costs" for all Operating Years to the date of measurement
(including the current Operating Year). For purposes of this definition,
"Benchmark Costs" shall be the total operating costs for each Operating Year set
----------------
forth in the Operating Plan, and "Cumulative Overruns" shall be, at any time,
-------------------
-19-
an amount equal to the excess of (a) the sum of the actual operating costs for
each complete Operating Year ended over (b) the sum of the Benchmark Costs for
----
each such complete Operating Year ended.
"Material System Contracts" means, collectively, all System Contracts other
-------------------------
than Capacity Sales Agreements, Capacity Swap Agreements, any Intercompany
Agreement, the Payment Escrow Agreement and any Additional Non-Material
Contract.
"Maturity Date" means (a) with respect to Working Capital Loans, Term A
-------------
Loans, Term B Loans and Term C Loans, June 30, 2005, and (b) with respect to
Term D Loans, September 30, 2005.
"Monthly Expense Transfer Date" is defined in clause (i) of Section
----------------------------- ---------- -------
8.08(b).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
-------
"Mortgages" means the mortgages, deeds of trust and other instruments
---------
required to be executed and delivered by Loan Parties owning real property
pursuant to the terms of this Agreement (including Section 5.29 hereof),
------------
creating, in favor of the Secured Parties, Liens on such real property, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA.
"Net Cash Proceeds" means (a) with respect to the sale, transfer, lease or
-----------------
other disposition of any asset (excluding Capacity) by the Borrower or any
Subsidiary, an amount certified in reasonable detail by a Responsible Officer of
the Borrower 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, in accordance
with GAAP, against any liabilities associated with such sale or disposition
(except that, to the extent and as of the time any such amounts are released
from such 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 required to be repaid in connection with the sale,
transfer, lease or other disposition thereof, (C) the reasonable out-of-pocket
expenses incurred or to be incurred by the Borrower or such Subsidiary in
connection with such sale, transfer, lease or other disposition and (D)
provision for taxes attributable to such sale, transfer, lease or other
disposition (as estimated by the Borrower in good faith; 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 Equity Interests by Parent (or any parent corporation
thereof) or the Borrower, an amount certified in reasonable detail by a
Responsible Officer of Parent or the Borrower, as the case may be, to the
Lenders as the excess of (i) the sum of the cash received in connection with
such issuance over
-20-
(ii) the underwriting discounts and commissions (if any) and other reasonable
fees, out-of-pocket expenses and other costs incurred or to be incurred by
Parent or the Borrower in connection with such issuance and (c) with respect to
the incurrence of Indebtedness by Parent (or any parent corporation thereof)
(including the Parent Additional Debt Offering and the Parent PIK Offering) or
the Borrower, an amount certified in reasonable detail by a Responsible Officer
of Parent or the Borrower, as the case may be, to the Lenders as the excess of
(i) the sum of the cash received in connection with such incurrence of
Indebtedness over (ii) the reasonable fees, out-of-pocket expenses and other
costs incurred or to be incurred by Parent or the Borrower in connection with
such incurrence of Indebtedness; provided that, in any event, Net Cash Proceeds
--------
shall not include (A) the Parent Senior Note Proceeds, (B) the Net Equity
Proceeds, (C) the proceeds of the Parent Terrestrial Build-Out Offering, (D) the
Parent Post-Closing Equity Offering, (E) the proceeds of the Parent Additional
Senior Note Offering, (F) the capital contribution to the Borrower of the
proceeds from the issuances referred to in clauses (A) through (F) above or (G)
----------- ---
Permitted Subordinated Debt.
"Net Equity Funding Commitment" means an amount equal to the Equity Funding
-----------------------------
Commitment minus an amount equal to the sum of (a) the fees, out-of-pocket
expenses and other costs incurred by Parent in connection with the issuance of
the Parent Senior Notes and the issuance of its Equity Interests on or prior to
the Closing Date and (b) the reasonable fees, out-of-pocket expenses and other
costs incurred by Parent or the Borrower (directly or through any of the
Subsidiaries) and paid by Parent, the Borrower or any Subsidiary in connection
with the transactions contemplated hereby; provided that the amounts set forth
--------
in clauses (a) and (b) are consistent with the Capital Budget.
----------- ---
"Net Equity Proceeds" is defined in Section 4.01(l).
------------------- ---------------
"Non-Defaulting Lender" means and includes each Lender other than a
---------------------
Defaulting Lender.
"Notes" means, collectively, the Term Notes and the Working Capital Notes.
-----
"Notice of Guaranty Draw" is defined in the Term C Loan Guaranty.
-----------------------
"OA&M Agreement" means an Operations, Administration and Maintenance
--------------
Agreement to be entered into between the Borrower (and one or more Subsidiaries)
and the Operator, in form and substance reasonably satisfactory to the
Administrative Agent, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with and subject
to the terms and conditions hereof.
"OA&M Expenses" means all operation, administration and maintenance
-------------
expenses with respect to the System which are payable by the Borrower or any
Subsidiary (including all sales, excise and similar taxes, all other taxes and
duties payable by the Borrower or such Subsidiary and all payments owing to the
Operator under the OA&M Agreement in respect of work performed thereunder);
provided that OA&M Expenses shall not include (i) amounts payable in
--------
-21-
respect of Permitted System Upgrades and Permitted Costs, (ii) any non-cash
expenses, (iii) income and franchise taxes payable by any Subsidiary and (iv)
all payments made to the Subsidiaries under any Intercompany Agreement.
"Obligations" means all obligations (monetary or otherwise, whether
-----------
absolute or contingent, matured or unmatured) of each Loan Party arising under
or in connection with a Loan Document.
"Obligors" means, collectively, the Borrower, Parent, the Subsidiaries, the
--------
Contractor (until the expiration of the Warranty Period under and as defined in
the Supply Contract), the Term C Loan Guarantor (only during any Term C Loan
Guaranteed Period) and, prior to the performance of all obligations under the
Supply Contract Guaranty, the Supply Contract Guarantor.
"Offering Memorandum" means the Offering Memorandum, dated July 8, 1999,
-------------------
with respect to Parent's US$300,000,000 13% Senior Notes due 2007 proposed to be
issued pursuant to the Parent Senior Note Documents.
"Operating Budget" is defined in Section 5.14(a).
---------------- ---------------
"Operating Budget Deviation" means, with respect to the Operating Budget
--------------------------
for any Operating Year, the payment of any OA&M Expense which would result in
total operating costs for such Operating Year (after giving effect to all other
payments of OA&M Expenses in such Operating Year, including all other cost
overruns and underruns or other savings with respect to any budget category)
exceeding the total operating costs set forth in the Operating Budget for such
Operating Year by more than 5%.
"Operating Plan" is defined in Section 5.14(a).
-------------- ---------------
"Operating Reserve Account" means the special account designated by that
-------------------------
name established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Operating Reserve Amount" means, at any time of determination, an amount
------------------------
equal to six months of anticipated operating expenses in accordance with the
then current Operating Budget of the Borrower and the Subsidiaries.
"Operating Year" means, initially, the period from the date the Primary
--------------
Ring becomes operational to the following December 31st and, thereafter, each
ensuing calendar year.
"Operator" means the Person designated by the Borrower and/or any of the
--------
Subsidiaries with the consent of the Designated Agents, from time to time, as
the operator under the OA&M Agreement.
"Other Taxes" means any and all present or future stamp or documentary
-----------
Taxes, charges
-22-
or similar levies arising from any payment hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement, other
than any such Taxes imposed solely as a result of the recipient conducting
activities in the relevant jurisdiction unrelated to the Credit Extensions.
"Parent" means GlobeNet Communications Group Limited, a company organized
------
and existing under the laws of Bermuda and the direct owner of all of the Equity
Interests of the Borrower.
"Parent Additional Debt Offering" means one or more issuances of up to
-------------------------------
$50,000,000 in the aggregate of unsecured Indebtedness of Parent (with the
ability to pay current interest and with terms and conditions no more
restrictive than those contained in the Parent Senior Note Documents), the
proceeds of which are to be applied as a prepayment of the Loans pursuant to
Section 2.11(c).
---------------
"Parent Additional Notes" means any notes issued by Parent pursuant to the
-----------------------
Parent Additional Senior Note Offering and the Parent Additional Debt Offering.
"Parent Additional Senior Note Offering" means one or more issuances of up
--------------------------------------
to an additional $50,000,000 in the aggregate of unsecured Indebtedness of
Parent pursuant to either (a) the Parent Senior Note Documents or (b) other
documentation with terms and conditions no more restrictive than those contained
in the Parent Senior Note Documents, in each case with the ability to pay
current interest and, in each case, the proceeds of which are to be contributed
to the Borrower and to be used for System Activities.
"Parent Expenses" means all reasonable and necessary expenses incurred by
---------------
Parent in connection with the conduct of its business.
"Parent Interest Reserve Account" means the special account designated by
-------------------------------
that name established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Parent Interest Reserve Amount" means, at any time of determination, an
------------------------------
amount equal to six months of anticipated interest on the Parent Senior Notes
and any Parent Additional Notes.
"Parent PIK Offering" means one or more issuances of unsecured Indebtedness
-------------------
or preferred stock of Parent which has (a) no principal payments, redemptions,
repurchases, sinking funds or prepayments prior to the date which is one year
after the payment in full in cash of all Loans and other obligations hereunder
and under the Loan Documents and the termination of all Commitments, (b) no cash
interest or dividend payments, and (c) interest or dividend rate, interest or
dividend payment date, subordination, covenants, defaults and other terms and
conditions no more restrictive than those contained in the Parent Senior Note
Documents, the proceeds of which are to be applied as a prepayment of the Loans
pursuant to Section 2.11(c) or in accordance with Sections 6.09 or 6.10.
--------------- ------------- ----
-23-
"Parent Pledge Agreement" means the Pledge Agreement, dated as of the date
-----------------------
hereof, substantially in the form of Exhibit E, made by Parent in favor of the
---------
Secured Parties, as the same may be amended, supplemented, amended and restated
or otherwise modified from time to time.
"Parent Post-Closing Equity Offering" means one or more issuances of up to
-----------------------------------
$10,000,000 in the aggregate after the Closing Date of equity by Parent.
"Parent Senior Note Documents" means, collectively, (a) the Senior Note
----------------------------
Securities Purchase Agreement, dated as of July 8, 1999, among Parent and the
purchasers named therein, (b) the Indenture, dated as of July 14, 1999, between
Parent and Bankers Trust Company as Trustee, with respect to the Parent Senior
Notes, and (c) the Parent Senior Notes issued pursuant to such Indenture, in
each case as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with and subject to the terms
and conditions of the Parent Pledge Agreement.
"Parent Senior Note Proceeds" is defined in Section 4.01(m).
--------------------------- ---------------
"Parent Senior Notes" means the senior notes issued by Parent pursuant to
-------------------
the Parent Senior Note Documents.
"Parent Terrestrial Build-Out Offering" means one or more issuances of
-------------------------------------
unsecured Indebtedness or preferred stock of Parent which has (a) no principal
payments, redemptions, repurchases, sinking funds or prepayments prior to the
date which is one year after the payment in full in cash of all Loans and other
obligations hereunder and under the Loan Documents and the termination of all
Commitments, (b) no cash interest or dividend payments, and (c) interest or
dividend rate, interest or dividend payment date, subordination, covenants,
defaults and other terms and conditions no more restrictive than those contained
in the Parent Senior Note Documents, the proceeds of which are to be applied as
set forth in Section 2.08(f).
---------------
"Participation Amount" is defined in the definition of Applicable
--------------------
Percentage.
"Participation Certificate" is defined in clause (ii) of Section 2.04(a).
------------------------- ----------- ---------------
"Payment Escrow Agent" is defined in the Supply Contract.
--------------------
"Payment Escrow Agreement" is defined in the Supply Contract.
------------------------
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Perfectible Collateral" is defined in Section 3.17.
---------------------- ------------
"Permitted Activities" means, with respect to the Borrower and the
--------------------
Subsidiaries, (a)
-24-
System Activities, (b) activities otherwise contemplated by the System Contracts
and the Loan Documents, (c) with respect to TBI and GCL, telecommunications-
related activities (including Internet related activities), and (d) with respect
to each of the above activities, activities incidental thereto.
"Permitted Costs" means (a) all amounts due under the Supply Contract
---------------
(including, in respect of Permitted System Upgrades), (b) any and all amounts
due in connection with any change to the configuration of the System permitted
under Section 6.09, (c) any and all amounts due in respect of any capital
------------
expenditure permitted under Section 6.17 and (d) any other amount applied to
------------
costs of the type set forth in Section 8.08(b), Section 8.08(c) or in clauses
--------------- --------------- -------
first through seventh of Section 8.08(d).
----- ------- ---------------
"Permitted Encumbrances" means any one or more of the following:
----------------------
(a) Liens imposed by law for taxes that are not yet due or are being
contested in accordance with Section 5.03;
------------
(b) (i) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens relating to the construction of the System
or (ii) other Liens arising in the ordinary course of business and securing
obligations that are not overdue by more than 60 days or are being
contested in accordance with Section 5.03;
------------
(c) any Liens on any portion of the System arising by operation of
law through the Contractor (or any of its subcontractors);
(d) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(e) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(f) 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 materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;
(g) Liens arising under any Loan Document;
(h) Liens arising under the Payment Escrow Agreement;
(i) the rights of any purchaser of Capacity with respect to the use
of portions of the System as set forth or referred to in a Capacity Sales
Agreement or a Capacity Swap
-25-
Agreement;
(j) Liens arising out of judgments or awards with respect to which
appeals or other proceedings for review are being prosecuted in good faith
and by appropriate proceedings diligently conducted and for the payment of
which adequate reserves have been provided or other provisions reasonably
satisfactory to the Administrative Agent have been made; and
(k) Liens arising under that certain security agreement, dated as of
August 27, 1997, between TeleBermuda International LLC and TBI.
"Permitted Holders" means each of the Equity Investors and their respective
-----------------
Affiliates.
"Permitted Investments" means any one or more of 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;
(b) 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-1 from S&P or at least P-1 from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 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;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
----------
into with a financial institution satisfying the criteria described in
clause (c) above; and
----------
(e) with respect to the investment of funds on deposit in the Payment
Escrow Agreement, investments permitted by the Payment Escrow Agreement.
"Permitted Subordinated Debt" means Indebtedness of the Borrower which has
---------------------------
(a) no principal payments, redemptions, repurchases, sinking funds or
prepayments prior to the date which is one year after the payment in full in
cash of all Loans and other obligations hereunder and under the Loan Documents
and the termination of all Commitments, (b) no cash interest payments, and (c)
interest rate, interest payment date, subordination, covenants, defaults and
other terms and conditions reasonably satisfactory to the Designated Agents;
provided that, in
--------
-26-
any event, such Permitted Subordinated Debt is incurred solely for the purposes
specifically set forth in this Agreement.
"Permitted System Upgrades" means upgrades to the System contemplated by
-------------------------
Article 48 of the Supply Contract.
"Person" means any natural person, corporation, limited liability company,
------
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"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 Borrower 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" means the plan of work attached as Appendix 3 to the Supply
------------
Contract, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with and subject to the terms
and conditions hereof.
"Pledge Agreements" means, collectively, the Parent Pledge Agreement, the
-----------------
Borrower Pledge and Security Agreement and the Subsidiary Pledge and Security
Agreement.
"Primary Ring" means that portion of the System consisting of Segment 1,
------------
Segment 2, Segment 3, Segment 4 and Segment 5.
"Prime Rate" means the rate of interest per annum established by the
----------
Administrative Agent 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" means each June 30 and December 31 (or, if such
----------------------
day is not a Business Day, the immediately preceding Business Day) commencing
with the Initial Principal Payment Date.
"Projections" means the Borrower's reasonably detailed operating
-----------
projections for the System (as of the Closing Date and as updated by the
Borrower pursuant to the terms hereof), initially certified and delivered to the
Administrative Agent on the Closing Date, which reflect the reasonable expected
case (and not worst case) projections of the revenues, operating expenses, cash
flow, debt service and other related items for the System.
"Qualified Capacity Agreements" means (a) Capacity Sales Agreements then in
-----------------------------
full force and effect with Qualified Purchasers and (b) Capacity Swap Agreements
then in full force and effect with Qualified Purchasers.
-27-
"Qualified Capacity Revenue" means, as of any date of determination, (a)
--------------------------
all cash revenue (net of sales commissions) received by the Borrower and the
Subsidiaries under Qualified Capacity Agreements and any other Capacity Sales
Agreements and Capacity Swap Agreements, (b) amounts due prior to the Maturity
Date under Qualified Capacity Agreements (the "Pre-Maturity Date Capacity
--------------------------
Revenue") if at least 10% of such Pre-Maturity Date Capacity Revenue has been
-------
paid in cash as a down payment, and (c) ten times the down payment amount of
Pre-Maturity Date Capacity Revenue where less than 10% of such Pre-Maturity Date
Capacity Revenue has been paid in cash as a down payment.
"Qualified Purchasers" means, collectively, (a) the Persons listed on
--------------------
Schedule 1.01(b), (b) any Person whose long-term senior unsecured debt rating is
----------------
rated BBB- or better from Standard & Poor's Rating Services or Baa3 or better
from ▇▇▇▇▇'▇ Investors Services, Inc., (c) any Person whose payment obligations
under a Capacity Sales Agreement or a Capacity Swap Agreement are fully backed
by a letter of credit or a guaranty, in each case on terms and from Persons
reasonably satisfactory to the Administrative Agent, and (d) any other Person
with the consent of the Designated Agents.
"Rate Protection Agreement" means, collectively, any interest rate swap,
-------------------------
cap, collar or similar agreement entered into by the Borrower or any of the
Subsidiaries under which the counterparty of such agreement is (or at the time
such agreement was entered into, was) a Lender or an Affiliate of a Lender.
"Ready for Commercial Acceptance" is defined in the Supply Contract.
-------------------------------
"Ready for Provisional Acceptance" is defined in the Supply Contract.
--------------------------------
"Reference Lenders" means Toronto Dominion (Texas) Inc. and two other
-----------------
Lenders determined by the Administrative Agent in consultation with the
Borrower, and any successors thereto determined by the Administrative Agent in
consultation with the Borrower.
"Register" is defined in Section 10.04(c).
-------- ----------------
"Reimbursement Obligation" is defined in Section 2.05(e).
------------------------ ---------------
"Related Fund" means, with respect to any Lender which is a fund that
------------
invests in loans, any other fund that invests in loans and is controlled by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and subsidiaries and the respective directors, officers and
employees of such Person and such Person's Affiliates and subsidiaries.
"Remaining Asset Value" means, on any date of determination, (a) the sum of
---------------------
the aggregate amount of (i) unsold System Capacity consisting of STM-1s, (ii)
unsold Backhaul
-28-
Capacity owned by the Borrower and the Subsidiaries and (iii) System Capacity to
be achieved by Permitted System Upgrades which have been contracted for as of
such date, multiplied by (b) the average price of the then five most recent
----------
sales of both STM-1s on the System and Backhaul Capacity, as applicable,
occurring within one year of such date (or, if there are less than five, all of
such sales of STM-1s or Backhaul Capacity, as applicable, occurring within one
year of such date).
"Remaining Asset Value to Borrower Debt Ratio" means, on any date of
--------------------------------------------
determination, the ratio of (a) Remaining Asset Value as of such date to (b) the
sum of all Indebtedness of the Borrower and the Subsidiaries under clauses (a),
-----------
(c) and (j) of Section 6.01 (other than items comprising clause (h) of the
--- --- ------------
definition of Indebtedness) as of such date.
"Required Balance" means (a) with respect to the Debt Reserve Account, the
----------------
Debt Reserve Amount, (b) with respect to the Operating Reserve Account, the
Operating Reserve Amount and (c) with respect to the Parent Interest Reserve
Account, the Parent Interest Reserve Amount.
"Required Lenders" means, at any time of determination, Non-Defaulting
----------------
Lenders having Working Capital Exposures, LC Exposure, outstanding Term Loans
and unused Commitments representing more then 66-2/3% of the sum of the total
Working Capital Exposures, LC Exposures, outstanding Term Loans and unused
Commitments of such Non-Defaulting Lenders at such time.
"Requirement of Law" means, as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule, judgment, decree, order 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.
"Responsible Officer" means, with respect to any matter, with respect to
-------------------
any Person, the President, any Vice President, Assistant Vice President,
Treasurer or Assistant Treasurer of such Person, or any other officer of such
Person who in the normal performance of his operational responsibility would
have knowledge of such matter and the requirements, if any, with respect
thereto.
"Restricted Payment" means any dividend or other distribution (whether in
------------------
cash, securities or other property) with respect to any Equity Interests of the
Borrower or any Subsidiary, or 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 Equity Interests of the Borrower or any Subsidiary (or in respect of
any Permitted Subordinated Debt) or any option, warrant or other right to
acquire any such Equity Interests of the Borrower or any Subsidiary.
"Revenue" means, for any period, all revenue (net of applicable sale
-------
commissions, if
-29-
any) received by the Borrower and the Subsidiaries during such period, including
(a) System Capacity Revenue, (b) Backhaul Service Revenue, (c) the sale, lease,
transfer or other disposition of any of its assets, (d) all payments made by
insurers under business interruption policies, (e) all payments received under
Hedging Agreements after the Commercial Operation Date and (f) all refunds of
VAT; provided that Revenue shall not include Special Payments, Casualty
--------
Proceeds, Net Cash Proceeds or any proceeds referred to in the last proviso of
the definition of Net Cash Proceeds.
"Revenue Account" means the special account designated by that name
---------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Rio Ring Option" means the option available to ANBL under Article 50 of
---------------
the Supply Contract which, if exercised, would expand the System to include a
four fiber pair, single strand segment from Rio de Janeiro, Brazil to Fortaleza,
Brazilas described under Option B in Appendix IB to the Supply Contract.
"Sales and Issuances Proceeds Account" means the special account designated
------------------------------------
by that name established by the Administrative Agent pursuant to Section
-------
8.01(a).
-------
"Scheduled RFS Date" is defined in the Supply Contract.
------------------
"Secured Parties" means, collectively, the Lenders, the Administrative
---------------
Agent, the Syndication Agent, the Arranger, the Issuer, each counterparty to a
Rate Protection Agreement and, in each case, each of their respective
successors, transferees and assigns.
"Security Documents" means, collectively, the Pledge Agreements and the
------------------
Mortgages.
"Segment" means Segment 1, Segment 2, Segment 3, Segment 4, Segment 5 or
-------
Segment 6, as the case may be.
"Segment 1" means the segment of the System from Tuckertown, New Jersey to
---------
Boca Raton, Florida, and landing in locations capable of interconnecting with
major telecommunications carriers.
"Segment 2" means the segment of the System from Boca Raton, Florida to
---------
Punta Gorda, Venezuela, and landing in locations capable of interconnecting with
major telecommunications carriers.
"Segment 3" means the segment of the System from Punta Gorda, Venezuela to
---------
Fortaleza, Brazil, and landing in locations capable of interconnecting with
major telecommunications carriers.
"Segment 4" means the segment of the System from Fortaleza, Brazil to St.
---------
David's, Bermuda, and landing in locations capable of interconnecting with major
telecommunications
-30-
carriers.
"Segment 5" means the segment of the System from St. David's, Bermuda to
---------
Tuckertown, New Jersey, including BUS-1, and landing in locations capable of
interconnecting with major telecommunications carriers.
"Segment 6" means the four fiber pair, single strand segment of the System
---------
from Fortaleza, Brazil to Rio de Janeiro, Brazil, and landing in locations
capable of interconnecting with major telecommunications carriers.
"SG&A Expenses" means selling, general and administrative expenses (other
-------------
than sales commissions) incurred by the Borrower and the Subsidiaries in the
ordinary course of business.
"Special Payment Account" means the special account designated by that name
-----------------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Special Payments" means (a) all payments made by the Contractor under the
----------------
Supply Contract and all other payments made by the Contractor or the Supply
Contract Guarantor in respect of any breach or failure by the Contractor to
perform its obligations under the Supply Contract, whether as a result of any
proceeding, settlement or otherwise, and (b) all payments under insurance
policies maintained by the Borrower or any Subsidiary to compensate for a delay
in the commencement of operations of the System.
"S&P" means Standard & Poor's Ratings Services.
---
"Statutory Reserve Rate" means 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 with
respect to the Adjusted LIBO Rate, 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.
"Subsidiary" means, with respect to any Person (the "parent") at any date,
---------- ------
any corporation, company, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, company, limited liability company, partnership, association
or other entity that is, as of such date, otherwise Controlled, by the parent or
one or
-31-
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
"Subsidiary" means any subsidiary of the Borrower.
----------
"Subsidiary Accounts" means, collectively, the special accounts established
-------------------
by the Administrative Agent pursuant to Section 8.01(b).
---------------
"Subsidiary Guaranty" means the Guaranty Agreement, dated as of the date
-------------------
hereof, substantially in the form of Exhibit H, made by each of the Subsidiaries
---------
party thereto in favor of the Secured Parties, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Pledge and Security Agreement" means the Pledge and Security
----------------------------------------
Agreement, dated as of the date hereof, substantially in the form of Exhibit G,
---------
made by each of the Subsidiaries party thereto in favor of the Secured Parties,
and each other security agreement made by a Subsidiary in favor of the Secured
Parties in accordance with Section 5.29, as the same may be amended,
------------
supplemented, amended and restated or otherwise modified from time to time,
including as supplemented by the Foreign Subsidiary Pledge Supplements.
"Subsidiary Transfer Date" means the last Business Day of each February,
------------------------
May, August and November occurring after the date the Primary Ring becomes
operational or, with respect to any Subsidiary, such other dates as such
Subsidiary designates in writing to the Administrative Agent.
"Subsidiary Transfer Payment" means, with respect to any Subsidiary as of
---------------------------
any Subsidiary Transfer Date, to the extent permitted by applicable law, all
amounts on deposit in such Subsidiary's Subsidiary Account as of such date, net
of all Taxes due (or to become due) from such Subsidiary and all OA&M Expenses
and SG&A Expenses anticipated to be incurred by such Subsidiary prior to the
next Subsidiary Transfer Date (or such lesser amount as may be permitted under
applicable law to be distributed by such Subsidiary to its parent).
"Supply Contract" means the Project Development and Construction Contract,
---------------
dated as of June 16, 1999, among the Contractor and ANBL, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with and subject to the terms and conditions hereof.
"Supply Contract Guarantor" means Alcatel, a societe anonyme organized and
-------------------------
existing under the laws of France, in its capacity as guarantor under the Supply
Contract Guaranty.
"Supply Contract Guarantor Consent" means the Consent and Agreement to be
---------------------------------
entered into among the Borrower, the Supply Contract Guarantor and the
Administrative Agent with respect to the assignment by the Borrower of its
rights and interests under the Supply Contract Guaranty, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
-32-
"Supply Contract Guaranty" means the Guaranty, dated as of July 14, 1999,
------------------------
made by the Supply Contract Guarantor in favor of ANBL, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time in accordance with and subject to the terms and conditions hereof.
"Syndication Agent" is defined in the preamble.
----------------- --------
"System" means the four fiber pair, fiber-optic submarine cable system to
------
be known as the Atlantica-1 Submarine Cable System, consisting of Segment 1,
Segment 2, Segment 3, Segment 4 and Segment 6 (with an initial capacity of 20
Gb/s on each of two fiber pairs, one working fiber pair and one protective fiber
pair, with each fiber pair upgradeable to 320 Gb/s), and Segment 5, including
all landing stations on each Segment, and Backhaul Capacity in Venezuela owned
by the Borrower or a Subsidiary and constructed pursuant to the Supply Contract,
as the same may be modified from time to time in accordance with and subject to
the terms and conditions hereof (including any modification resulting from the
exercise of the Rio Ring Option).
"System Activities" means (a) all activities related to the design,
-----------------
development, engineering, acquisition, installation, construction, landing,
completion, disposition, financing, start-up, testing, operation, ownership,
possession, maintenance, use and (to the extent permitted in accordance with
this Agreement) modification of the System, (b) Backhaul Service and (c)
exchanges of Capacity and other capacity permitted in accordance with the first
sentence of Section 6.23.
------------
"System Capacity" means capacity on the System.
---------------
"System Capacity Revenue" means the cash revenue (net of sales commissions)
-----------------------
received by the Borrower and the Subsidiaries from the sales or swaps of System
Capacity and from related payments in respect of operation, administration and
maintenance charges from customers, but, in any event, without duplication with
respect to payments received by the Subsidiaries from the Borrower or any
Subsidiary under any Intercompany Agreement.
"System Contracts" shall be the collective reference to the Supply
----------------
Contract, the Supply Contract Guaranty, the Contractor Consent, the Supply
Contract Guarantor Consent, the Capacity Sales Agreements, the Capacity Swap
Agreements, the Payment Escrow Agreement, the OA&M Agreement, the Term C Loan
Guaranty Reimbursement Agreement, each Intercompany Agreement and each
Additional Contract.
"System Final Completion" means the date on which the Certificate of Final
-----------------------
Acceptance shall have been issued with respect to the System in accordance with
the terms of the Supply Contract, as certified by the Independent Engineer.
"System Upgrade Reserve Account" means the special account designated by
------------------------------
that name established by the Administrative Agent pursuant to Section 8.01(a).
---------------
-33-
"Taxes" means any and all present or future taxes, levies, imposts, duties,
-----
deductions, charges or withholdings imposed by any Governmental Authority.
"TBI" means TeleBermuda International Limited, a company organized and
---
existing under the laws of Bermuda and a direct, wholly-owned subsidiary of the
Borrower.
"TBI Leverage Ratio" means, at any time, the ratio of (a) the sum of (i)
------------------
the aggregate outstanding principal amount of Term A Loans (including any Term A
Loans to be made in connection with the proposed Borrowing) at such time and
(ii) all Indebtedness of TBI at such time (excluding Indebtedness owed by TBI to
the Borrower or any Subsidiary or under the Subsidiary Guaranty) to (b) EBITDA
of TBI for the twelve-month period then most recently ended.
"Term A Loan Commitment" means (a) as to all Lenders, $60,000,000, and (b)
----------------------
as to any Lender, its obligation to make Term A Loans to the Borrower in an
aggregate amount not to exceed at any one time outstanding the amount set forth
opposite such Lender's name on Schedule 2.01 under the heading "Term A Loan
-------------
Commitment" or, in the case of a Lender that is an assignee, the amount of such
assigning Lender's Term A Loan Commitment assigned to such assignee pursuant to
Section 10.04(b) in each case as such amount may be adjusted from time to time
----------------
as provided herein, including pursuant to Section 2.01(b).
---------------
"Term A Loans" is defined in Section 2.01(a).
------------ ---------------
"Term A Note" is defined in Section 2.09(e).
----------- ---------------
"Term B Loan Commitment" means (a) as to all Lenders, $80,000,000, and (b)
----------------------
as to any Lender, its obligation to make Term B Loans to the Borrower in an
aggregate amount not to exceed at any one time outstanding the amount set forth
opposite such Lender's name on Schedule 2.01 under the heading "Term B Loan
-------------
Commitment" or, in the case of a Lender that is an assignee, the amount of such
assigning Lender's Term B Loan Commitment assigned to such assignee pursuant to
Section 10.04(b) in each case as such amount may be adjusted from time to time
----------------
as provided herein.
"Term B Loans" is defined in Section 2.01(a).
------------ ---------------
"Term B Note" is defined in Section 2.09(e).
----------- ---------------
"Term C Loan Commitment" means (a) as to all Lenders, $150,000,000, and (b)
----------------------
as to any Lender, its obligation to make Term C Loans to the Borrower in an
aggregate amount not to exceed at any one time outstanding the amount set forth
opposite such Lender's name on Schedule 2.01 under the heading "Term C Loan
-------------
Commitment" or, in the case of a Lender that is an assignee, the amount of such
assigning Lender's Term C Loan Commitment assigned to such assignee pursuant to
Section 10.04(b), in each case as such amount may be adjusted from time to time
----------------
as provided herein, including pursuant to Sections 2.01(b) and 2.08(f).
---------------- -------
-34-
"Term C Loan Guaranteed Period" means any period during which Term C Loans
-----------------------------
are outstanding that are being guaranteed pursuant to the Term C Loan Guaranty.
"Term C Loan Guarantor" means Alcatel, a societe anonyme organized and
---------------------
existing under the laws of France, in its capacity as guarantor under the Term C
Loan Guaranty.
"Term C Loan Guaranty" means the Guaranty, dated as of July 14, 1999, made
--------------------
by the Term C Loan Guarantor in favor of the Secured Parties, in form and
substance reasonably satisfactory to the Administrative Agent, as the same may
be amended, supplemented, amended and restated or otherwise modified from time
to time in accordance with and subject to the terms and conditions hereof.
"Term C Loan Guaranty Fees" means the fees due to the Term C Loan Guarantor
-------------------------
pursuant to the Term C Loan Guaranty Reimbursement Agreement in respect of the
Term C Loan Guaranty.
"Term C Loan Guaranty Reimbursement Agreement" means the Reimbursement
--------------------------------------------
Agreement, dated as of July 14, 1999, between the Borrower and the Term C Loan
Guarantor, in form and substance reasonably satisfactory to the Administrative
Agent, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with and subject to the terms
and conditions hereof.
"Term C Loans" is defined in Section 2.01(a).
------------ ---------------
"Term C Note" is defined in Section 2.09(e).
----------- ---------------
"Term D Loan Commitment" means (a) as to all Lenders, $100,000,000, and (b)
----------------------
as to any Lender, its obligation to make Term D Loans to the Borrower in an
aggregate amount not to exceed at any one time outstanding the amount set forth
opposite such Lender's name on Schedule 2.01 under the heading "Term D Loan
-------------
Commitment" or, in the case of a Lender that is an assignee, the amount of such
assigning Lender's Term D Loan Commitment assigned to such assignee pursuant to
Section 10.04(b) in each case as such amount may be adjusted from time to time
----------------
as provided herein.
"Term D Loans" is defined in Section 2.01(a).
------------ ---------------
"Term D Note" is defined in Section 2.09(e).
----------- ---------------
"Term Loan" means a Term A Loan, a Term B Loan, a Term C Loan or a Term D
---------
Loan, as the case may be.
"Term Loan Commitment" means the Term A Loan Commitment, the Term B Loan
--------------------
Commitment, the Term C Loan Commitment or the Term D Loan Commitment, as the
case may be.
-35-
"Term Note" means a Term A Note, a Term B Note, a Term C Note or a Term D
---------
Note, as the case may be.
"Termination Date" means, with respect to any Loan, the last day of the
----------------
Availability Period for such Loan.
"Transfer" is defined in Section 6.04.
-------- ------------
"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.
"UCC" means the Uniform Commercial Code as in effect from time to time in
---
the State of New York; provided that if, with respect to any Filing Statement or
--------
by reason of any provisions of law, the perfection or the effect of perfection
or non-perfection of the security interests granted to the Administrative Agent
pursuant to any Loan Document is governed by the Uniform Commercial Code as in
effect in a jurisdiction of the United States other than New York, AUCC" means
the Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions of such Loan Document and any Filing
Statement relating to such perfection or effect of perfection or non-perfection.
"Voting Interests" means, with respect to any Person, any class or classes
----------------
of Equity Interests (or other rights) in such Person entitling the holders
thereof to vote under ordinary circumstances in the election of , or to appoint,
members of the board of directors or other governing body of such Person.
"Withdrawal Liability" means 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.
"Working Capital Exposure" means, with respect to any Lender at any time,
------------------------
the outstanding principal amount of such Lender=s Working Capital Loans and/or
participation interests in Working Capital Loans at such time.
"Working Capital Lender" means any Lender designated as such on the
----------------------
signature pages hereof, together with its successors and assigns.
"Working Capital Loan Commitment" means (a) as to all Working Capital
-------------------------------
Lenders, $10,000,000, and (b) as to any Working Capital Lender, its obligation
to make Working Capital Loans to the Borrower and acquire participations in
Letters of Credit in an aggregate amount not to exceed at any one time
outstanding the amount set forth opposite such Working Capital Lender's name on
Schedule 2.01 under the heading "Working Capital Loan Commitment" or, in the
-------------
case of any Working Capital Lender that is an assignee, the amount of the
assigning Lender's Working Capital Loan Commitment assigned to such assignee
pursuant to Section 10.04 in each
-------------
-36-
case as such amount may be adjusted from time to time as provided herein.
"Working Capital Loan Percentage" means, with respect to any Lender other
-------------------------------
than a Working Capital Lender, the percentage set forth opposite the name of
such Lender on Schedule 2.01 under the heading "Working Capital Loan
-------------
Percentage".
"Working Capital Loans" is defined in Section 2.01(a).
--------------------- ---------------
"Working Capital Note" is defined in Section 2.09(e).
-------------------- ---------------
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
--------------------------------------
Agreement, Loans may be classified and referred to by Class (e.g., a "Working
----
Capital Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
----
(e.g., a "Eurodollar Working Capital Loan"). Borrowings also may be classified
----
and referred to by Class (e.g., a "Working Capital Borrowing") or by Type (e.g.,
---- ----
a "Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Working
----
Capital Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
---------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented, amended and restated or otherwise modified (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 permitted successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement 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 1.04. 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.
-37-
ARTICLE II
THE COMMITMENTS
---------------
SECTION 2.01. Commitments. (a) Subject to the terms and conditions set
-----------
forth herein, (i) each Working Capital Lender severally agrees to make working
capital loans ("Working Capital Loans") to the Borrower from time to time during
---------------------
the Availability Period in an aggregate principal amount that will not result in
such Working Capital Lender's Working Capital Exposure exceeding such Working
Capital Lender's Working Capital Loan Commitment, (ii) each Lender severally
agrees to make term A loans ("Term A Loans") to the Borrower from time to time
------------
during the Availability Period in an aggregate principal amount not to exceed
such Lender's Term A Loan Commitment, (iii) each Lender severally agrees to make
term B loans ("Term B Loans") to the Borrower from time to time during the
------------
Availability Period in an aggregate principal amount not to exceed such Lender's
Term B Loan Commitment, (iv) each Lender severally agrees to make term C loans
("Term C Loans") to the Borrower from time to time during the Availability
------------
Period in an aggregate principal amount not to exceed such Lender's Term C Loan
Commitment, and (v) each Lender severally agrees to make term D loans ("Term D
------
Loans") to the Borrower from time to time during the Availability Period in an
-----
aggregate principal amount not to exceed such Lender's Term D Loan Commitment;
provided that no Lender shall be required to make any Term Loan if, after giving
--------
effect thereto, the sum of the outstanding Term Loans (in each case, after
giving effect to the Term Loans requested to be made on such date) exceed the
Term Loan Commitments of all Lenders. Within the foregoing limits and subject
to the terms and conditions set forth herein, the Borrower may borrow, prepay
and reborrow Working Capital Loans. Amounts repaid in respect of Term Loans may
not be reborrowed.
(b) At any time on up to two occasions during the Availability Period
applicable to both Term A Loans and Term C Loans, the Borrower may, upon five
Business Days' prior irrevocable written notice delivered to the Administrative
Agent and with the consent of the Administrative Agent (not to be unreasonably
withheld), elect to reallocate any portion of the then unused Term A Loan
Commitment to the Term C Loan Commitment. Any such reallocation will
automatically reduce the Term A Loan Commitment and increase the Term C Loan
Commitment by a corresponding amount and, upon the effectiveness of such
reallocation, the Term A Loan Commitment and Term C Loan Commitment of each of
the Lenders shall be ratably adjusted to reflect such reallocation. Upon a
reallocation pursuant to this Section, the Borrower shall execute and deliver
new Term Notes to each of the Lenders that hold Term Notes at such time to
reflect the reallocated Commitments of such Lenders. The Administrative Agent
shall distribute to the Borrower and the Lenders a schedule reflecting the
modified Commitments in effect after giving effect to a reallocation pursuant to
this paragraph.
(c) By written request furnished to the Administrative Agent, the Borrower
may request that such of the Lenders who desire to do so may provide an
additional financing facility to the Borrower in an aggregate principal amount
of up to $50,000,000 to be available only after the Commercial Operation Date.
The Administrative Agent shall furnish a copy of any such request
-38-
promptly to all of the Lenders. Each Lender shall make a determination, in its
sole discretion, as to whether it desires to participate in such facility and,
subject to the Administrative Agent's written consent (after consulting with the
Borrower), the amount of its desired participation. The terms and conditions of
any such facility shall be determined by the Lenders electing to participate
therein, but such terms and conditions (i) shall be no more restrictive than the
terms contained in this Agreement and (ii) shall (unless the Term C Loan
Guarantor otherwise agrees or until all of the Borrower's obligations under the
Term C Loan Guaranty are discharged in full) require that (A) there shall be
cumulative Qualified Capacity Revenue of at least $50,000,000 prior to any draw
thereon, and (B) no payments shall have been made under the Term C Loan Guaranty
prior to any draw thereon, and such facility shall otherwise be governed by the
terms of this Agreement (as the same may be amended with the prior written
consent of the Majority Lenders to include such facility).
SECTION 2.02. 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
Lenders ratably in accordance with their respective 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) Each Working Capital Borrowing and Term Loan Borrowing may be ABR
Loans or Eurodollar Loans, or a combination thereof, as the Borrower may request
in accordance herewith.
(c) Each Eurodollar Borrowing and each ABR Borrowing shall be in an
aggregate amount that is not less than $500,000, in the case of a Working
Capital Borrowing, and not less than $5,000,000, in the case of a Term Loan
Borrowing; provided that any such Borrowing may be in an aggregate amount that
--------
is equal to the entire unused balance of the total Working Capital Loan
Commitment, Term A Loan Commitment, Term B Loan Commitment, Term C Loan
Commitment or Term D Loan Commitment, as the case may be, or in an amount that
is required to finance the reimbursement of an LC Disbursement as contemplated
by Section 2.05(e). 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 eight Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Eurodollar Borrowing if the Interest Period requested with respect thereto would
end after the Maturity Date.
SECTION 2.03. Requests for Borrowings. To request a Working Capital
-----------------------
Borrowing or a Term Loan Borrowing, the Borrower shall notify the Administrative
Agent of such request by delivering a Borrowing Request 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 date of the proposed Borrowing 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 date of the proposed Borrowing; provided that
--------
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any such notice of an ABR Borrowing to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.05(e) may be given not later than
---------------
11:00 a.m., New York City time, on the date of the proposed Borrowing. Each
such Borrowing Request shall be irrevocable and shall specify the following
information in compliance with Section 2.02:
------------
(a) whether the requested Borrowing is to be a Working Capital
Borrowing, a Term A Loan Borrowing, a Term B Loan Borrowing, a Term C Loan
Borrowing and/or a Term D Loan Borrowing;
(b) the aggregate amount of the requested Borrowing;
(c) the date of such Borrowing, which shall be (A) in the case of
Term Loans, a Borrowing Date and (B) in the case of Working Capital Loans,
a Business Day;
(d) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing; and
(e) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period".
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an ABR Borrowing. Promptly following receipt of a Borrowing
Request 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. With respect to Term D
Loans, the Borrower shall, at the end of the Availability Period for Term D
Loans (after notice from the Administrative Agent), deliver an irrevocable
Borrowing Request for the entire amount of the Term D Loan Commitment.
SECTION 2.04. Special Provisions for Working Capital Loans.
--------------------------------------------
(a) Participations in Working Capital Loans.
---------------------------------------
(i) By the making of a Working Capital Loan and without further
action on the part of the Working Capital Lenders, the Working Capital
Lenders hereby ratably grant to each Lender that is not a Working Capital
Lender, and each Lender that is not a Working Capital Lender hereby
acquires ratably from the Working Capital Lenders, a participation in such
Working Capital Loan equal to such Lender's Working Capital Loan Percentage
of the aggregate amount of such Working Capital Loan. Each Lender that is
not a Working Capital Lender acknowledges and agrees that its obligation to
acquire a participation pursuant to this paragraph in respect of each
Working Capital Loan is absolute and unconditional and shall not be
affected by any circumstance
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whatsoever, including the occurrence and continuance of a Default, a
Designated Event, an Event of Default or a Material Adverse Effect or
reduction or termination of the Commitments, and that each such payment
shall be made without any offset, abatement, withholding or reduction
whatsoever.
(ii) If any Event of Default described in Section 7.04 or 7.05 shall
------------ ----
have occurred, each Lender (other than a Working Capital Lender)
immediately and automatically shall, and at other times, from time to time,
promptly upon request by the Working Capital Lenders delivered to the
Administrative Agent (which shall promptly notify each Lender thereof),
transfer immediately to the Administrative Agent for credit to the Working
Capital Lenders, in immediately available funds, the amount of its
participation set forth in clause (i). If requested to do so by such other
----------
Lender, the Working Capital Lenders will deliver to such other Lender,
promptly following receipt of such funds, a participation certificate,
substantially in the form of Exhibit M (the "Participation Certificate"),
--------- -------------------------
dated the date of receipt of such funds and in the amount of such Lender's
participation.
(iii) So long as any Lender that is not a Working Capital Lender or a
Defaulting Lender has fulfilled any obligation to make payments to the
Administrative Agent for the account of the Working Capital Lenders
pursuant to clause (i) above, upon (and only upon) receipt by the
----------
Administrative Agent for the account of the Working Capital Lenders of
immediately available funds from the Borrower in respect of interest or
commitment fees relating to the Working Capital Loans, the Working Capital
Lenders shall promptly remit, through the Administrative Agent, to the
Lenders which are not Working Capital Lenders an amount equal to their pro
rata share of the Applicable Rate paid with respect to outstanding Working
Capital Loans and an amount equal to their pro rata share of such
commitment fees.
(iv) Upon (and only upon) receipt by the Administrative Agent for the
account of the Working Capital Lenders of immediately available funds from
the Borrower as payment in respect of principal of or interest on a Working
Capital Loan with respect to which a Lender (other than a Working Capital
Lender) has paid the Administrative Agent for the account of the Working
Capital Lenders for such Lender's participation in such Working Capital
Loan pursuant to clause (i) above, the Administrative Agent will pay to
----------
each such Lender which is not a Defaulting Lender, in the same funds as
those received by the Administrative Agent for the account of the Working
Capital Lenders, such Lender's pro rata share of such funds, and the
Working Capital Lenders shall receive their pro rata share of any funds of
any Lender that did not so pay the Administrative Agent for the account of
the Working Capital Lenders.
(b) Acknowledged Privity. The Borrower expressly agrees that, in respect
--------------------
of each Lender's funded participation interest in any Working Capital Loan, such
Lender shall be deemed to be in privity of contract with the Borrower and have
the same rights and remedies against the Borrower under the Loan Documents as if
such funded participation interest in such
-41-
Working Capital Loan were a Working Capital Loan.
(c) Obligation to Participate in Working Capital Loans Absolute. Each
-----------------------------------------------------------
Lender's obligation in accordance with this Agreement to purchase participation
interests in Working Capital Loans, as contemplated by this Section 2.04, as a
------------
result of the making of a Working Capital Loan, shall be absolute and
unconditional and without recourse to or representation or warranty by the
Working Capital Lenders and shall not be affected by any circumstance, including
(i) any set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Working Capital Lenders, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default, an Event of Default, a Designated Event or a Material Adverse Effect;
or (iii) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing.
SECTION 2.05. Letters of Credit. (a) General. Subject to the terms and
----------------- -------
conditions set forth herein, the Borrower may request the issuance of, and the
Issuer shall issue on any Business Day on which the conditions precedent set
forth in Section 4.02 are satisfied (or waived by the Majority Lenders), a
------------
Letter of Credit. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuer relating to any Letter of Credit,
the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain Conditions.
---------------------------------------------------------------------
To request the issuance of a Letter of Credit (or the amendment, renewal or
extension of an outstanding Letter of Credit), the Borrower shall hand deliver
or fax (or transmit by other electronic communication if arrangements for doing
so have been approved by the Issuer) to the Issuer and the Administrative Agent
(at least three Business Days in advance of the requested date of issuance,
amendment, renewal or extension) an Issuance Request requesting the issuance of
a Letter of Credit, or identifying the Letter of Credit to be amended, renewed
or extended, the date of issuance, amendment, renewal or extension, the date on
which such Letter of Credit is to expire (which shall comply with paragraph (c)
-------------
of this Section), the stated amount of such Letter of Credit, the name and
address of the beneficiary thereof and such other information as shall be
necessary to prepare, amend, renew or extend such Letter of Credit. The
Borrower also shall submit a letter of credit application on the Issuer's
standard form in connection with any request for a Letter of Credit. A Letter
of Credit shall be issued, amended, renewed or extended only if, after giving
effect to such issuance, amendment, renewal or extension (i) the LC Exposure for
all Letters of Credit then outstanding shall not exceed $2,000,000 and (ii) the
sum of the aggregate principal amount of the Working Capital Loans then
outstanding and the LC Exposure shall not exceed the total Working Capital Loan
Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior to
---------------
the close of business on the date which is one year after the date of the
issuance of such Letter of Credit, but in no event later than one Business Day
before the Maturity Date.
-42-
(d) Participation. By the issuance of a Letter of Credit (or an amendment
-------------
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuer or the Lenders, the Issuer hereby grants to
each Lender, and each Lender hereby acquires from the Issuer, a participation in
such Letter of Credit equal to such Lender's Applicable Percentage of the
aggregate amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, for the account
of the Issuer, such Lender's Applicable Percentage of each LC Disbursement made
by the Issuer and not reimbursed by the Borrower on the date due as provided in
paragraph (e) of this Section, or of any reimbursement payment required to be
-------------
refunded to the Borrower for any reason. Each Lender acknowledges and agrees
that its obligation to acquire a participation pursuant to this paragraph in
respect of each Letter of Credit is absolute and unconditional and shall not be
affected by any circumstance whatsoever, including any amendment, renewal or
extension of any Letter of Credit or the occurrence and continuance of a
Default, a Designated Event, an Event of Default or a Material Adverse Effect or
reduction or termination of the Commitments, and that each such payment shall be
made without any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If the Issuer shall make any LC Disbursement in respect
-------------
of a Letter of Credit, the Borrower shall reimburse (its "Reimbursement
-------------
Obligation") such LC Disbursement by paying to the Administrative Agent an
----------
amount equal to such LC Disbursement not later than 2:00 p.m., New York City
time, on the date that such LC Disbursement is made, if the Borrower shall have
received notice of such LC Disbursement prior to 10:00 a.m., New York City time,
on such date, or, if such notice has not been received by the Borrower prior to
such time on such date, then not later than 2:00 p.m., New York City time, on
(i) the Business Day that the Borrower receives such notice, if such notice is
received prior to 10:00 a.m., New York City time, on the day of receipt, or (ii)
the Business Day immediately following the day that the Borrower receives such
notice, if such notice is not received prior to such time on the day of receipt;
provided that the Borrower may, subject to the conditions to borrowing set forth
--------
herein, request in accordance with Section 2.03 that such payment be financed
------------
with an ABR Working Capital Borrowing in an equivalent amount and, to the extent
so financed, the Borrower's obligation to make such payment shall be discharged
and replaced by the resulting ABR Borrowing. If the Borrower fails to make such
payment when due, or if any payment by the Borrower must be returned or restored
(by reason of a bankruptcy proceeding or otherwise), the Administrative Agent
shall notify each Lender of the applicable LC Disbursement, the payment then due
from the Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Lender shall pay to
the Administrative Agent its Applicable Percentage of the payment then due from
the Borrower, in the same manner as provided in Section 2.06 with respect to
------------
Loans made by such Lender (and Section 2.06 shall apply, mutatis mutandis, to
------------ ------- --------
the payment obligations of the Lenders), and the Administrative Agent shall
promptly pay to the Issuer the amounts so received by it from the Lenders.
Promptly following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall distribute
such payment to the Issuer or, to the extent that Lenders have made payments
pursuant to this paragraph to reimburse the Issuer and are Non-Defaulting
Lenders, then to such Non-Defaulting Lenders and the Issuer as their
-43-
interests may appear. Any payment made by a Lender pursuant to this paragraph to
reimburse the Issuer for any LC Disbursement (other than the funding of ABR
Loans as contemplated above) shall not constitute a Loan and shall not relieve
the Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse LC
--------------------
Disbursements as provided in paragraph (e) of this Section, and each Lender's
-------------
obligation to reimburse the Issuer for any LC Disbursement, shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement irrespective of any event or circumstance that
would constitute a legal or equitable discharge of the Borrower's obligations
hereunder, and irrespective of any other circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement, any
Loan Document, any Letter of Credit, or of any Letter of Credit application
or other agreement between the Issuer and an account party;
(ii) any amendment or waiver of or any consent to departure from the
provisions of this Agreement or any other Loan Document in accordance with
the terms thereof;
(iii) the existence of any claim, set-off, defense or other right
that the Borrower may have at any time against any beneficiary or any
permitted transferee of any Letter of Credit (or any Person for whom any
such beneficiary or any such transferee may be acting), the Administrative
Agent, the Issuer, any Lender or any other Person, whether in connection
with this Agreement, any Letter of Credit, the transactions contemplated
hereby or by the other Loan Documents or any unrelated transaction
(including an underlying transaction between the Borrower and the
beneficiary named in any such Letter of Credit);
(iv) any draft, demand, certificate or other document presented under
or in connection with any Letter of Credit proving to be forged, fraudulent
or invalid in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) any payment by the Issuer acting in good faith under any Letter
of Credit against presentation of a draft or certificate that does not
strictly comply with the terms of any Letter of Credit; or any payment made
by the Issuer under any Letter of Credit to any Person reasonably believed
by it to be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of any Letter of Credit,
including any arising in connection with any insolvency proceeding;
(vi) any exchange, release or non-perfection of any collateral, or
any release or amendment or waiver of or consent to departure from any
guarantee or other obligation, for all or any of the obligations of the
Borrower in respect of any Letter of Credit; or
-44-
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that
might otherwise constitute a defense available to, or a discharge of, the
Borrower or a guarantor;
provided that the foregoing shall not be construed to excuse the Issuer from
--------
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuer's failure to exercise the agreed standard of care
(as set forth below) in determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. Neither the
Administrative Agent, the Syndication Agent, the Arranger, the Issuer nor the
Lenders, nor any of their Related Parties, shall have any liability or
responsibility by reason of or in connection with the issuance or transfer of
any Letter of Credit or any payment or failure to make any payment thereunder,
or any error, omission, interruption, loss or delay in transmission or delivery
of any draft, notice or other communication under or relating to any Letter of
Credit (including any document required to make a drawing thereunder), any error
in interpretation of technical terms or any consequence arising from causes
beyond the control of the Issuer; provided that the foregoing shall not be
--------
construed to excuse the Issuer from liability to the Borrower to the extent of
any direct damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Borrower to the extent permitted by applicable
law) suffered by the Borrower that are caused by the Issuer's failure to
exercise the agreed standard of care (as set forth below) in determining whether
drafts and other documents presented under a Letter of Credit comply with the
terms thereof. The parties hereto expressly agree that the Issuer shall have
exercised the agreed standard of care in the absence of gross negligence or
wilful misconduct on the part of the Issuer; provided that it is understood and
--------
agreed that the Issuer may accept documents that appear on their face to be in
substantial compliance with the terms of a Letter of Credit, without
responsibility for further investigation, and may make payment upon presentation
of documents that appear on their face to be in substantial compliance with the
terms of such Letter of Credit; provided further that (i) the Issuer shall have
--------
the right, in its sole discretion, to decline to accept such documents and to
make such payment if such documents are not in strict compliance with the terms
of such Letter of Credit and (ii) the Borrower shall have in any event waived
any right it may have to object to payment by the Issuer against documents
presented to it unless expressly objected to in writing within 10 days after
such payment and, if requested in writing by the Borrower, delivery to the
Borrower of such documents by the Issuer. The Issuer agrees to promptly notify
the Borrower of each LC Disbursement.
(g) Disbursement Procedures. The Issuer shall, promptly following its
-----------------------
receipt thereof, examine all documents purporting to represent a demand for
payment under a Letter of Credit. The Issuer shall promptly notify the
Administrative Agent and the Borrower by telephone (confirmed by facsimile) of
such demand for payment and whether the Issuer has made or will make an LC
Disbursement thereunder.
(h) Interim Interest. If the Issuer shall make any LC Disbursement, then,
----------------
unless the Borrower shall reimburse such LC Disbursement in full on the date
such LC Disbursement is
-45-
made, the unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the date that
the Borrower reimburses such LC Disbursement, at the rate per annum then
applicable to ABR Term Loans; provided that, if the Borrower fails to reimburse
--------
such LC Disbursement when due pursuant to paragraph (e) of this Section
-------------
(including pursuant to an ABR Borrowing in accordance with Section 2.03), then
------------
Section 2.13(c) shall apply. Interest accrued pursuant to this paragraph shall
---------------
be for the account of the Issuer, except that interest accrued on and after the
date of payment by any Lender pursuant to paragraph (e) of this Section to
-------------
reimburse the Issuer shall be for the account of such Lender to the extent of
such payment.
(i) Replacement of the Issuer. The Issuer may be replaced at any time by
-------------------------
written agreement among the Borrower, the Administrative Agent, the replaced
Issuer, the successor Issuer and any beneficiary of a Letter of Credit. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuer. At the time any such replacement shall become effective, the Borrower
shall pay all unpaid fees accrued for the account of the replaced Issuer
pursuant to Section 2.12(b). From and after the effective date of any such
---------------
replacement, (i) the successor Issuer shall have all the rights and obligations
of the Issuer under this Agreement with respect to Letters of Credit to be
issued thereafter and (ii) references herein to the term "Issuer" shall be
deemed to refer to such successor or to any previous Issuer, or to such
successor and all previous Issuers, as the context shall require. After the
replacement of an Issuer hereunder, the replaced Issuer shall remain a party
hereto and shall continue to have all the rights and obligations of an Issuer
under this Agreement with respect to Letters of Credit issued by it prior to
such replacement (unless such Letters of Credit are replaced with new Letters of
Credit issued by the successor Issuer), but shall not be required to issue
additional Letters of Credit.
SECTION 2.06. Funding of Borrowings. (a) Each Lender shall make each
---------------------
Loan to be made by it 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 Borrower by promptly crediting the amounts so received, in like funds, to
the Construction Account; provided that ABR Term Loans made to finance the
--------
reimbursement of an LC Disbursement as provided in Section 2.05(e) shall be
---------------
remitted by the Administrative Agent to the Issuer.
(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 share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
-------------
and may, in reliance upon such assumption, make available to the Borrower 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 agrees 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 Borrower to but excluding the date
of payment to the Administrative Agent, at the Federal Funds
-46-
Effective Rate for three days and at the Alternate Base Rate thereafter. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.07. Interest Elections. (a) Each Borrowing shall initially be
------------------
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower 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 Article II. The Borrower may elect different options with respect to
----------
different portions of the affected Borrowing, in which case each such portion
shall be allocated ratably among the Lenders holding the Loans 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 Borrower shall
notify the Administrative Agent of such election by delivering a
Continuation/Conversion Notice to the Administrative Agent by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
------------
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such Continuation/Conversion Notice
shall be irrevocable and shall specify the following information in compliance
with Section 2.02:
------------
(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, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Continuation/Conversion Notice requests a Eurodollar Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration. Promptly following receipt
of a Continuation/Conversion Notice, the Administrative Agent shall advise each
Lender of the details thereof and of such Lender's portion of each resulting
Borrowing.
(c) If the Borrower fails to deliver a timely Continuation/Conversion
Notice with respect
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to a Eurodollar Borrowing prior to the end of the Interest Period applicable
thereto, then, unless such Borrowing is repaid as provided herein, at the end of
such Interest Period such Borrowing shall be converted to an ABR Borrowing.
Notwithstanding any contrary provision hereof, if an Event of Default or
Designated Event has occurred and is continuing and the Administrative Agent, at
the request of the Majority Lenders, so notifies the Borrower, then, so long as
an Event of Default or Designated Event is continuing (i) no outstanding
Borrowing may be converted to or continued as a Eurodollar Borrowing and (ii)
unless repaid, each Eurodollar Borrowing shall be converted to an ABR Borrowing
at the end of the Interest Period applicable thereto.
SECTION 2.08. Termination and Reduction of Commitments. (a) Unless
----------------------------------------
previously terminated, the Commitments shall terminate on the applicable
Termination Date.
(b) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (c) of this Section at least
-------------
five Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Promptly following
receipt of any notice, the Administrative Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this
Section shall be irrevocable and any termination or reduction of the Commitments
shall be permanent. Each reduction of the Commitments of any Class shall be
made ratably among the Lenders in accordance with their respective Commitments
of such Class.
(c) The Borrower may at any time terminate, or from time to time reduce,
the Commitments of any Class; provided that (i) each reduction of the Term Loan
--------
Commitments shall be made pro rata among all Term Loan Commitments, (ii) each
--- ----
reduction of the Commitments shall be in a minimum aggregate principal amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof, (iii) the
Borrower shall not terminate or reduce the Commitments of any Class if, after
giving effect to any concurrent prepayment of the Loans in accordance with
Section 2.10 or 2.11, (A) with respect to the Working Capital Loan Commitments,
------------ ----
the aggregate principal amount of the outstanding Working Capital Loans and LC
Exposure would exceed the Working Capital Loan Commitments or (B) with respect
to the Term Loan Commitments, the aggregate principal amount of the outstanding
Term Loans would exceed the applicable Term Loan Commitments, and (iv) the
Borrower shall not terminate or reduce the Term Loan Commitments if the
remaining Term Loan Commitments, together with other funds available to the
Borrower, would not, in the reasonable judgment of the Administrative Agent
(upon consultation with the Independent Engineer), be sufficient to pay the
remaining amounts owing under the Supply Contract and the other costs necessary
to complete the System.
(d) The Working Capital Loan Commitments shall be automatically and
permanently reduced upon and in the amount of any payments made thereon pursuant
to Section 2.09(a) and, after all Term Loans have been repaid in full, in the
---------------
amount of any mandatory prepayments made thereon pursuant to Section 2.11.
------------
(e) The Commitments shall be automatically and permanently reduced upon and
in the
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amount of any payments made pursuant to clause eleventh of Section 8.08(a).
--------------- ---------------
(f) Until such time as the Borrower has provided the Administrative Agent
with written notification of its election to exercise the Rio Ring Option,
$112,000,000 of the Term C Loan Commitment shall be unavailable. If the
Borrower has not made an election with respect to the Rio Ring Option by
December 31, 1999, the Term C Loan Commitment shall be automatically and
permanently reduced by $112,000,000. If, however, the Borrower has elected not
to exercise the Rio Ring Option, but has elected one of the alternatives set
forth below by December 31, 1999, the Term C Loan Commitment shall be
automatically and permanently reduced by $23,000,000, with the remaining
$89,000,000 of the previously unavailable portion available only to pay
reasonable and necessary receipted costs for the design, construction and
installation of either (a) a terrestrial connection between Rio de Janeiro,
Brazil and Fortaleza, Brazil or (b) a west coast connection, in either case with
the consent of the Designated Agents, the Required Lenders and Lenders
comprising at least 66 2/3% of the number of Lenders at such time, and with the
approval of the Independent Engineer (which approval shall not be unreasonably
withheld); provided that so long as no Event of Default has occurred and is
--------
continuing at the time of such election and with the consent of the Independent
Engineer (which consent shall not be unreasonably withheld), the Borrower may
build such connections without the consent of any of the Lenders if all of the
costs for such design, construction and installation and of required maintenance
are funded entirely with the proceeds of the Parent Terrestrial Build-Out
Offering on terms and conditions reasonably satisfactory to the Designated
Agents.
SECTION 2.09. Repayment of Loans; Evidence of Debt. (a) The Borrower
------------------------------------
hereby unconditionally promises to repay the Working Capital Loans in full on
the Maturity Date, and hereby unconditionally promises to repay the Term Loans
in eight semi-annual installments on Principal Payment Dates, commencing on
December 31, 2001, in percentages of the total outstanding principal amount of
the Term Loans as of the first day after the end of the Availability Period, as
set forth on Schedule 2.09.
-------------
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent acting for this purpose as an agent of the
Borrower, shall maintain the Register pursuant to Section 10.04(c) and a
----------------
subaccount therein for each Lender, in which it shall record (i) the amount of
each Loan and each obligation evidenced by a Note 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
Borrower 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.
(d) The entries made in the Register and the accounts maintained pursuant
to paragraph (b) or (c) of this Section shall constitute prima facie evidence of
------------- --- ----- -----
the existence and
-49-
amounts of the Obligations recorded therein; provided that the failure of any
--------
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will execute and deliver to such Lender, as
applicable, (i) a promissory note of the Borrower payable to the order of such
Lender and its registered assigns evidencing the Working Capital Loans of such
Lender and substantially in the form of Exhibit A-1 with appropriate insertions
-----------
as to date and principal amount (each a "Working Capital Note"), (ii) a
--------------------
promissory note of the Borrower payable to the order of such Lender and its
registered assigns evidencing the Term A Loans of such Lender and substantially
in the form of Exhibit A-2 with appropriate insertions as to date and principal
-----------
amount (each a "Term A Note"), (iii) a promissory note of the Borrower payable
-----------
to the order of such Lender and its registered assigns evidencing the Term B
Loans of such Lender and substantially in the form of Exhibit A-2 with
-----------
appropriate insertions as to date and principal amount (each a "Term B Note"),
-----------
(iv) a promissory note of the Borrower payable to the order of such Lender and
its registered assigns evidencing the Term C Loans of such Lender and
substantially in the form of Exhibit A-2 with appropriate insertions as to date
-----------
and principal amount (each a "Term C Note"), and (v) a promissory note of the
-----------
Borrower payable to the order of such Lender and its registered assigns
evidencing the Term D Loans of such Lender and substantially in the form of
Exhibit A-2 with appropriate insertions as to date and principal amount (each a
-----------
"Term D Note"). Thereafter, the Loans evidenced by any such Note and interest
-----------
thereon shall at all times (including after assignment pursuant to Section
-------
10.04) be represented by one or more Notes payable to the order of the payee
named therein and its registered assigns. Each Lender is hereby authorized to
endorse the date and amount of any Loans on the grid attached to any Note, and
any entries made thereon shall constitute prima facie evidence of the existence
----- -----
and amounts of the Obligations recorded therein; provided that the failure of
--------
any Lender to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Loans in accordance
with the terms of this Agreement. A Note and the obligation evidenced thereby
may be assigned or otherwise transferred in whole or in part 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 Borrower 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
subsection 2.09(e).
------------------
SECTION 2.10. Optional Prepayments of Loans. (a) The Borrower shall
----------------------------
have the right at any time and from time to time to prepay any Class of Loans in
whole or in part, without premium or penalty except as set forth in paragraph
---------
(c) below, subject to prior notice in
---
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accordance with paragraph (b) below and subject to the provisions of Section
-------
2.16.
----
(b) The Borrower shall notify the Administrative Agent in writing or by
telephone (confirmed by facsimile) of any optional prepayment hereunder, not
later than 11:00 a.m., New York City time, five Business Days before the date of
prepayment. Each such notice shall be irrevocable and shall specify, in the
case of any prepayment of Loans, the date and amount of prepayment and whether
the prepayment is (i) of Term Loans, Working Capital 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.
Promptly following receipt of any such notice, the Administrative Agent shall
advise the Lenders of the contents thereof. Partial optional prepayments shall
be in a minimum aggregate principal amount of $5,000,000 and integral multiples
of $1,000,000 in excess thereof. Optional prepayments shall be accompanied by
accrued interest to the extent required by Section 2.13. Without in any way
------------
limiting the obligation of the Borrower to confirm in writing any notice it may
give hereunder by telephone, the Administrative Agent may act prior to receipt
of written confirmation without liability upon the basis of such telephonic
notice believed by the Administrative Agent in good faith to be from a
Responsible Officer of the Borrower (or a designee of such Responsible Officer).
In each such case the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of any such telephonic notice.
(c) With respect to any prepayment of Term D Loans, the Borrower shall pay
to the Lenders having outstanding Term D Loans a prepayment fee on the principal
amount of Term D Loans so prepaid equal to (i) 3.00% of the principal amount of
such Term D Loans prepaid for any prepayment of such Term D Loans made on or
prior to the first anniversary of the Closing Date, (ii) 2.00% of the principal
amount of such Term D Loans prepaid for any prepayment of such Term D Loans made
after the first anniversary but on or prior to the second anniversary of the
Closing Date, (iii) 1.00% of the principal amount of such Term D Loans prepaid
for any prepayment of such Term D Loans made after the second anniversary but on
or prior to the third anniversary of the Closing Date, and (iv) 0% thereafter.
(d) Optional prepayments of the Term Loans shall be applied to the
outstanding principal amount of all Term Loans pro rata among each tranche of
--- ----
Term Loans (with the amount of such prepayment of the Term Loans being applied
one-half to the remaining installment payments thereof in the direct order of
maturity and one-half to the remaining installment payments thereof in the
inverse order of maturity). Notwithstanding the foregoing, any Lender that has
Term D Loans outstanding may elect not to have its pro rata share of such Term D
--- ----
Loans prepaid, and upon any such election the Administrative Agent shall apply
the amount that otherwise would have prepaid such Lender's Term D Loans to a
prepayment of the outstanding principal amount of Term A Loans, Term B Loans and
Term C Loans until paid in full, and then to the repayment of the outstanding
principal amount of Working Capital Loans.
-51-
SECTION 2.11. Mandatory Prepayments. (a) The Borrower shall prepay the
---------------------
outstanding Loans with Revenue in accordance with the terms of Section 8.08(a).
---------------
(b) On each Principal Payment Date, the Borrower shall prepay the
outstanding Loans in an amount equal to 50% (or, if as of such date a Default or
a Designated Event shall have occurred and be continuing, 100%) of Excess Cash
Flow determined as of such date, in each case in accordance with the terms of
Section 8.08(d).
---------------
(c) The Borrower shall prepay the Loans promptly after the receipt of Net
Cash Proceeds, as follows:
(i) by an amount equal to 50% of the Net Cash Proceeds of any new
issuance after the Closing Date of Equity Interests of the Borrower or
Parent or any capital contribution made to Parent after the Closing Date in
accordance with Section 8.15(a); provided that the Borrower shall not be
--------------- --------
required to make any such prepayment (A) if such Net Cash Proceeds are
immediately applied to the payment of Permitted Costs or are being held
(for no more than 60 days, unless such Net Cash Proceeds are being held for
the payment of Permitted Costs, or (B) if such Net Cash Proceeds are being
held to pay an identified cost with the consent of the Administrative Agent
(which consent shall not be unreasonably withheld) in the Construction
Account, the Revenue Account or the Clean-Up Account, as the case may be,
in accordance with Section 8.15(a);
---------------
(ii) by an amount equal to 100% of the Net Cash Proceeds of an
incurrence of Indebtedness by the Borrower or Parent after the Closing Date
(other than Indebtedness permitted by Section 6.01, but subject in any
------------
event to the limitations contained in Section 6.01) in accordance with
------------
Section 8.15(b); and
---------------
(iii) by an amount equal to 100% of the Net Cash Proceeds of any
Transfer of any asset of the Borrower or the Subsidiaries (other than (A)
Transfers permitted pursuant to clause (a), (b) and (d) of Section 6.04 and
---------- --- --- ------------
(B) Transfers resulting in aggregate Net Cash Proceeds not exceeding
$500,000 during any fiscal year of the Borrower) in accordance with Section
-------
8.15(c); provided that the Borrower shall not be required to make any such
------- --------
prepayment if such Net Cash Proceeds are, within six months of receipt,
reinvested in the Borrower's or any Subsidiary's business (other than for
Permitted System Upgrades).
(d) If an Event of Loss shall occur, unless the affected portion of the
System is being restored, rebuilt or replaced in accordance with Section 5.22,
------------
the Borrower 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
proceeds received in accordance with Section 8.13(d).
---------------
(e) After the payment in full of all Capital Costs, the Borrower shall
prepay the Loans with funds made available to it for prepayments of the Loans
under Section 8.24.
------------
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(f) After the prepayment in full of all Loans, prepayments shall be made
in accordance with the foregoing clauses to cash collateralize LC Exposure as if
such LC Exposure were Loans.
(g) Mandatory prepayments shall be accompanied by accrued interest to the
extent required by Section 2.13.
------------
(h) All mandatory prepayments of the Loans shall be applied (i) first, to
-----
the mandatory prepayment of the outstanding principal amount of all Term Loans
pro rata among each tranche of Term Loans (with the amount of such prepayment of
--- ----
the Term Loans being applied one-half to the remaining installment payments
thereof in the direct order of maturity and one-half to the remaining
installment payments thereof in the inverse order of maturity), (ii) second,
------
once all Term Loans have been paid in full, to the mandatory prepayment of the
outstanding principal amount of all Working Capital Loans (and the concurrent
permanent reduction in the Commitments therefor), and (iii) third, once all
-----
Working Capital Loans have been paid in full, to the cash collateralization of
LC Exposure. Notwithstanding the foregoing, any Lender that has Term D Loans
outstanding may elect not to have its pro rata share of such Term D Loans
--- ----
prepaid, and upon any such election, the Administrative Agent shall apply the
amount that otherwise would have prepaid such Lender's Term D Loans in
accordance with clauses (i) through (iii) above.
----------- -----
(i) Upon making a mandatory prepayment pursuant to this Section, the
Borrower shall have the right (i) first, to apply such prepayment to the ABR
Loans and to any and all Eurodollar Loans having Interest Period(s) ending on
the date of such prepayment and (ii) then, with respect to Eurodollar Loans
having Interest Period(s) ending on a day other than the date of such
prepayment, to deposit cash in a cash collateral account, on terms and subject
to documentation reasonably satisfactory to the Administrative Agent, sufficient
to prepay in full such Eurodollar Loans (together with accrued interest thereon)
at the end of the applicable Interest Period(s). Any amounts so deposited shall
be held in a cash collateral account and shall be applied to the prepayment of
the applicable Eurodollar Loans at the end of the current Interest Periods
applicable thereto. The Administrative Agent shall, upon the written request of
the Borrower, invest funds in any such cash collateral account in overnight
investments constituting Permitted Investments.
SECTION 2.12. Fees. (a) The Borrower agrees to pay to the
----
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the rate of 1.50% per annum on the average daily unused portion
of the Commitments of such Lender during the period from the Closing Date to but
excluding the date on which such Commitment terminates. Accrued commitment fees
shall be payable in arrears on the last Business Day of each March, June,
September and December of each year and on the date on which the Commitments
terminate, commencing on the first such date to occur after the date hereof.
All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). For purposes of computing commitment fees with
respect to the Term Loan Commitments, a Term Loan Commitment of a
-53-
Lender shall be deemed to be used to the extent of the outstanding Term Loans of
such Lender. For purposes of computing commitment fees relating to Working
Capital Loan Commitment, the Working Capital Loan Commitment shall be deemed to
be used to the extent of the outstanding Working Capital Loans.
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Lender a participation fee with respect to its participation in
each Letter of Credit, which shall accrue at a rate per annum equal to the
Applicable Rate applicable to interest on Eurodollar Loans on the average daily
amount of such Lender's LC Exposure in respect of such Letter of Credit
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the date such Letter of Credit is issued to
but excluding the date on which such Letter of Credit is terminated, and (ii) to
the Issuer a fronting fee (as referred to in the Fee Letter with the
Administrative Agent), which shall accrue at the rate of .25% per annum on the
average daily stated amount of each outstanding Letter of Credit (as such stated
amount may be reduced in accordance with the terms of such Letter of Credit)
issued by the Issuer during the period from and including the date such Letter
of Credit is issued to but excluding the date on which such Letter of Credit is
terminated. Participation fees and fronting fees accrued through and including
the last Business Day of each March, June, September and December of each year
shall be payable on such Business Day, commencing on the first such date to
occur after the issuance of a Letter of Credit; provided that all such fees
--------
shall be payable on the date on which such Letter of Credit terminates. All
participation fees and fronting fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, the Arranger
and the Syndication Agent, for their own accounts, the fees payable in the
amounts and at the times separately agreed upon between such Persons and the
Borrower and certain of its Affiliates in the Fee Letters.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuer, in
the case of fees payable to it) for distribution, in the case of commitment fees
and participation fees, to the Lenders.
SECTION 2.13. 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 Rate.
(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 Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, all
amounts payable hereunder shall bear interest after such amounts become due
(including after as well as before judgment) at a rate per annum equal
-54-
to (i) in the case of the principal of 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 rate applicable to ABR 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 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
accrued interest shall be payable upon termination of the Commitments.
(e) All interest hereunder shall be computed on the basis of a year of 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 365 days (or 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).
SECTION 2.14. Alternate Rate of Interest; Illegality. (a) If prior to
--------------------------------------
the commencement of any Interest Period for a Eurodollar Borrowing:
(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 or the LIBO Rate, as
applicable, for such Interest Period; or
(ii) the Administrative Agent is advised by the Majority Lenders
that the Adjusted LIBO Rate or the LIBO Rate, as applicable, 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 Borrower and the
Lenders by telephone or facsimile as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower 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 (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
(b) Notwithstanding any other provision of this Agreement, if on or after
the date of this Agreement, 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 telephonic or facsimile notice thereof
-55-
to the Administrative Agent and the Borrower 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 canceled and (ii) such Lender's Loans then outstanding as Eurodollar Loans,
if any, shall be converted automatically to ABR Loans on the respective last day
of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.16.
------------
SECTION 2.15. 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 the Issuer; or
(ii) impose on any Lender or the Issuer any other condition
affecting this Agreement or Eurodollar Loans made by such Lender or any
Letter of Credit or participation therein;
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 increase the cost to such Lender or the
Issuer of participating in, issuing or maintaining any Letter of Credit or to
reduce the amount of any sum received or receivable by such Lender or the Issuer
hereunder (whether of principal, interest or otherwise), then the Borrower will
pay to such Lender or the Issuer, as the case may be, such additional amount or
amounts as will compensate such Lender or the Issuer, as the case may be, for
such additional costs incurred or reduction suffered; provided that Section 2.17
-------- ------------
and not this Section 2.15 shall apply to any Change in Law affecting any Taxes.
------------
(b) If any Lender or the Issuer 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, the Issuer or any holding company for
such Lender or the Issuer as a consequence of this Agreement or the Loans made
by, or participation in Letters of Credit held by, such Lender, or the Letters
of Credit issued by the Issuer, to a level below that which such Lender, the
Issuer or the holding company for such Lender or Issuer could have achieved but
for such Change in Law (taking into consideration such Lender's or the Issuer's
policies with respect to capital adequacy), then from time to time the Borrower
will pay to such Lender, the Issuer, or such Lender's or the Issuer's holding
company, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuer for any such reduction suffered.
(c) If any Lender or the Issuer becomes entitled to claim compensation
pursuant to this Section, such Lender shall promptly notify the Borrower (with a
copy to the Administrative
-56-
Agent) of the event by reason of which it has become so entitled. A written
notice by a Lender or the Issuer setting forth the amount or amounts necessary
to compensate such Lender or the Issuer or such holding company, as the case may
be, as specified in paragraph (a) or (b) of this Section delivered to the
------------- ---
Borrower (with a copy to the Administrative Agent), shall constitute prima facie
----- -----
evidence of the correctness of the amount claimed.
(d) The Borrower shall pay such Lender or the Issuer, as the case may be,
all amounts payable pursuant to the foregoing provisions of this Section 2.15
------------
within 10 days after receipt of certification thereof from such Lender or the
Issuer. Failure or delay on the part of any Lender or the Issuer to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's or the Issuer's right to demand such compensation; provided that the
Borrower shall not be required to compensate a Lender or the Issuer pursuant to
this Section for any increased costs or reductions incurred more than six months
prior to the date that such Lender or the Issuer, as the case may be, notifies
the Borrower of the Change in Law giving rise to such increased costs or
reductions and of such Lender's or the Issuer's intention to claim compensation
therefor.
SECTION 2.16. 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 or (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified in
any notice delivered pursuant hereto, then, in any such event, the Borrower
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 shall 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
written notice by any Lender setting forth any amount or amounts that such
Lender is entitled to receive pursuant to this Section shall be delivered by
such Lender to the Borrower (with a copy to the Administrative Agent) and shall
constitute prima facie evidence of the correctness of the amount claimed.
----- -----
SECTION 2.17. Taxes. (a) Any and all payments by or on account of any
-----
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Taxes, except to the extent imposed by applicable law. If the
Borrower shall be required by applicable law to deduct any Taxes from such
payments (including payments described in clause (i) below), then (i) if such
Taxes are Indemnified Taxes or Other Taxes, the sum payable shall, subject to
compliance with Section 2.17(c), be increased as necessary so that after making
---------------
all required
-57-
deductions (including deductions applicable to additional sums payable under
this Section) the Administrative Agent, Lender or Issuer (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes not described in
Section 2.17(a) to the relevant Governmental Authority in accordance with
---------------
applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender and
the Issuer, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuer, as the case may be, and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, except as a result of the gross negligence or willful misconduct of the
Administrative Agent, such Lender or the Issuer whether or not such Indemnified
Taxes or Other Taxes were correctly or legally imposed or asserted by the
relevant Governmental Authority. The Administrative Agent, any Lender or the
Issuer, as the case may be, shall promptly notify the Borrower and the
Administrative Agent of the assertion of any claim against the Administrative
Agent, such Lender or the Issuer, as the case may be, relating to Indemnified
Taxes or Other Taxes by the applicable Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Borrower by a Lender
or the Issuer, or by the Administrative Agent on its own behalf or on behalf of
a Lender or the Issuer, shall constitute prima facie evidence of the correctness
----- -----
of the amount claimed.
(d) As soon as reasonably practicable after any payment of any Taxes by
the Borrower to a Governmental Authority pursuant to clauses (a) or (b) above,
----------- ---
the Borrower 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) Without in any way affecting the obligation of the Borrower under
clause (i) of Section 2.17(a) to pay any increased amount only on account of
---------- ---------------
Indemnified Taxes or Other Taxes, each Lender organized under the laws of a
jurisdiction outside the United States, on or prior to the date of its execution
and delivery of this Agreement or on the date of the Assignment and Acceptance
pursuant to which it becomes a Lender, as the case may be, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with United States Internal Revenue
Service form W-8BEN or W-8ECI, as appropriate, or any successor or other form
prescribed by the United States Internal Revenue Service, certifying that such
Lender is exempt from or entitled to a reduced rate of United States federal
withholding tax on payments of interest pursuant to this Agreement or the Notes.
At the reasonable request of the Borrower, any Lender that is legally entitled
to an exemption from or reduction of any Tax which is an Indemnified Tax or
Other Tax under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times reasonably requested by the Borrower
or at such times as are otherwise prescribed by applicable
-58-
law, 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. If any form or document referred to in this
subsection (e) requires the disclosure of information (other than information
necessary to compute the tax payable or information required by the relevant
taxing authority to secure such exemption or reduction with respect to
withholding tax and that is necessary to secure such exemption from or reduction
of withholding tax) that the Lender reasonably considers to be confidential, the
Lender shall give notice thereof to the Borrower and shall not be obligated to
include in such form or document such confidential information.
(f) If any Lender, the Issuer or the Administrative Agent receives a
refund in respect of any Indemnified Tax or Other Tax paid by the Borrower, or
as to which it has been indemnified by the Borrower, which refund in the good
faith judgment of such Person is allocable to such payment made pursuant to this
Section, it shall promptly notify the Borrower of such refund and shall, within
20 days of receipt, repay such refund to the Borrower (together with any
interest with respect thereto received from the relevant taxing authority). In
any event, each Lender shall have the right to arrange its tax affairs as it, in
its sole discretion, deems most advantageous to it and nothing shall require a
Lender to disclose its tax returns or other confidential fiscal or tax
information to the Borrower.
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-
------------------------------------------------------
offs. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or under Section 2.15, 2.16 or 2.17, or otherwise) prior to 12:00
------------ ---- ----
noon, New York City time, on the date when due, in immediately available funds,
without set-off or counterclaim. Subject to Article VIII, all such payments
------------
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, except payments to be made directly to the Issuer as
expressly provided herein and except that payments pursuant to Sections 2.15,
-------------
2.16, 2.17 and 10.03 shall be made directly to the Persons entitled thereto.
---- ---- -----
The Administrative Agent shall distribute any such payments (including payments
received pursuant to Article VIII) received by it for the account of any other
------------
Person to the appropriate recipient promptly following receipt thereof. Except
as 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, unreimbursed LC
Disbursements, 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) second, to pay principal and unreimbursed LC Disbursements then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal and unreimbursed LC Disbursements then due to such parties.
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(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 or participation in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participation in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) a participation in
the Loans and LC Disbursements 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 and participation in LC Disbursements; 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 Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participation in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply).
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuer hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders or the Issuer, as the
case may be, the amount due. In such event, if the Borrower has not in fact made
such payment, then each of the Lenders or the Issuer, as the case may be,
severally agrees to repay to the Administrative Agent forthwith on demand the
amount so distributed to such Lender or Issuer 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 Federal Funds
Effective Rate for three days and at the Alternate Base Rate thereafter.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.05(d) or (e), 2.06(b) or 2.18(d), then the Administrative
--------------- --- ------- -------
Agent may, in its discretion or, as to Section 2.05(d) or (e), as may be
--------------- ---
required by the Issuer (notwithstanding any contrary provision hereof), 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.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a) If
----------------------------------------------
any Lender requests compensation under Section 2.15, or if the Borrower is
------------
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.17, then such
------------
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to Section 2.15 or 2.17,
------------ ----
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as the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender.
(b) If any Lender requests compensation under Section 2.15 which is not
------------
being requested by the Lenders generally, or if the Borrower is required to pay
any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, or if any Lender becomes a
------------
Defaulting Lender, then the Borrower may, at its sole expense and effort, upon
notice to such Lender and the Administrative Agent, so long as no Default or
Designated Event shall have occurred and is continuing, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 10.04), all its interests, rights and
-------------
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
--------
written consent of the Administrative Agent and the Issuer, which consent shall
not unreasonably be withheld or delayed, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participation in LC Disbursements, accrued interest thereon, accrued fees and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under Section 2.15 or payments required
------------
to be made pursuant to Section 2.17, such assignment will result in a reduction
------------
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
(c) If a Lender changes its applicable lending office (other than pursuant
to paragraph (d) below) and the effect of such change, as of the date of such
change, would be to cause the Borrower to become obligated to pay any additional
amount under Section 2.15 or 2.17, the Borrower shall not be obligated to pay
------------ ----
such additional amount.
(d) If a condition or an event occurs which would, or would upon the
passage of time or giving of notice, result in the payment of any additional
amount to any Lender by the Borrower pursuant to Section 2.15 or 2.17, or which
------------ ----
would make any Lender's participation in the transactions contemplated by the
Loan Documents illegal, such Lender shall promptly notify the Borrower and the
Administrative Agent and shall take such steps as may reasonably be available to
it to mitigate the effects of such condition or event (which shall include
efforts to rebook the Loans held by such Lender at another lending office, or
through another branch or an affiliate, of such Lender); provided that such
--------
Lender shall not be required to take any step that, in its reasonable judgment,
would be materially disadvantageous to its business or operations or would
require it to incur additional costs (unless the Borrower agrees to fund such
costs in a manner satisfactory to such Lender).
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
------------------------------
The Borrower represents and warrants to the Administrative Agent, the
Syndication Agent, the Arranger, the Issuer and the Lenders on the Closing Date
and on the date of each Borrowing as set forth in this Article.
SECTION 3.01. Financial Condition. The Borrower has heretofore furnished to
-------------------
the Lenders (a) Parent's audited consolidated balance sheet and statements of
income, shareholders' equity and cash flow for the fiscal year ended December
31, 1998 and (ii) Parent's unaudited consolidated and consolidating balance
sheets as of May 31, 1999, in each case, certified by a Responsible Officer of
Parent or the Borrower, as the case may be, such audited statements accompanied
by the audit report of PriceWaterhouseCoopers. Such financial statements present
fairly, in all material respects, the financial position and results of
operations and cash flow of Parent as of such date and for such period in
accordance with generally accepted accounting principles in Bermuda (with a
reconciliation to GAAP), subject to year-end adjustments and the absence of
notes, comparative statements and reconciliation to GAAP in the case of the
unaudited statements. The Borrower has also heretofore delivered to the
Administrative Agent and the Lenders a pro forma balance sheet for the Borrower
---------
and the Subsidiaries as of the Closing Date (giving pro forma effect to the full
funding of the Net Equity Commitment hereunder).
SECTION 3.02. No Change. Since May 31, 1999 (for the period until the
---------
Commercial Operation Date), and since the Commercial Operation Date (for the
period from and after the Commercial Operation Date), there has been no
development or event and no change which has had or could reasonably be expected
to have a Material Adverse Effect; provided that an adverse change in sales or
--------
prospective sales of Capacity whether or not 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 (or because of any related reduction in net income), provide a basis
that an event described above has occurred.
SECTION 3.03. Organization; Powers. Each of the Borrower and the
--------------------
Subsidiaries is duly organized, validly existing and, except for Georeach
Telecommunications Inc. until no later than 90 days after the Closing Date, in
good standing under the laws of the jurisdiction of its organization, and is
qualified to do business in such jurisdiction and in each other jurisdiction in
which the conduct of its business requires such qualification, except where the
failure to be so qualified could not reasonably be expected to have a Material
Adverse Effect.
SECTION 3.04. Authorization; Enforceability. (a) Each of the Borrower and
-----------------------------
the Subsidiaries has full corporate power and authority to conduct its business
as proposed to be conducted by it in respect of the System, to execute, deliver
and perform each Loan Document and Material System Contract to which it is a
party and to take all action as may be necessary to complete the transactions
contemplated hereunder.
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(b) Each of the Borrower and the Subsidiaries has taken all necessary
corporate action to authorize the Borrowings and other Credit Extensions
hereunder by the Borrower, to grant the Liens provided for in the Security
Documents to which it is a party and to authorize the execution, delivery and
performance of this Agreement and each other Loan Document and Material System
Contract to which it is a party.
(c) Each of this Agreement and each other Loan Document and Material
System Contract to which the Borrower or any Subsidiary is a party has been duly
executed and delivered by the Borrower or such Subsidiary, as the case may be,
and constitutes a legal, valid and binding obligation of the Borrower or such
Subsidiary, enforceable against the Borrower or such Subsidiary in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.05. Corporate Structure. (a) The only shareholder of the Borrower
-------------------
is Parent. As of the Closing Date, the capital structure of the Borrower and the
Subsidiaries is as set forth on Schedule 3.05(a).
-------------
(b) As of the Closing Date, the only subsidiaries of the Borrower are set
forth on Schedule 3.05(b), and each of ANBL, GCL and TBI are wholly-owned direct
----------------
subsidiaries of the Borrower. From and after the Closing Date, the only
subsidiaries of the Borrower not listed on Schedule 3.05(b) are those, if any,
----------------
created and capitalized in accordance with and subject to Sections 6.05 and
-------------
6.19.
----
SECTION 3.06. Compliance with Law. The Borrower and the Subsidiaries are in
-------------------
compliance with all Requirements of Law as of the Closing Date except to the
extent of any non-compliance which could not reasonably be expected to have a
Material Adverse Effect, and, as of any date representations and warranties are
made or deemed made under this Agreement subsequent to the Closing Date, are in
compliance with all Requirements of Law except to the extent of any non-
compliance which could not reasonably be expected to have a Material Adverse
Effect.
SECTION 3.07. No Legal Bar. The execution, delivery and performance by the
------------
Borrower and the Subsidiaries of each Loan Document and Material System Contract
to which it is a party and the Borrowings by the Borrower hereunder and the use
of the proceeds thereof and the granting of all Liens under the Security
Documents (a) will not violate or result in a default under any Requirement of
Law binding on such Person or its assets, (b) will not violate or result in a
default under any material Contractual Obligation of such Person and (c) will
not result in the creation or imposition of any Lien on any asset of the
Borrower or any Subsidiary except Permitted Encumbrances.
SECTION 3.08. Governmental Actions. To the best knowledge of the Borrower,
--------------------
Schedule 3.08 sets forth all Governmental Actions that are required to be
-------------
obtained by the Borrower, any Subsidiary or the Contractor in connection with
the construction, installation,
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development, ownership and operation of the System. To the best knowledge of the
Borrower, no Landing License is required in 5enezuela. By written notice to the
Administrative Agent, the Borrower shall be permitted to amend and supplement
such Schedule from time to time as may be appropriate, including in connection
with any amendment or supplement to the schedule provided by the Contractor
under Article 7(H) of the Supply Contract.
SECTION 3.09. Litigation. There are no actions, suits or proceedings by or
----------
before any arbitrator or Governmental Authority pending against or, to the
knowledge of the Borrower, threatened (a) by or against the Borrower, any other
Loan Party or the System which could reasonably be expected to have a Material
Adverse Effect or (b) with respect to any Loan Document.
SECTION 3.10. Environmental Matters. No violation of Environmental Laws
---------------------
exists with respect to the System, the Borrower, any Subsidiary or any of their
respective properties or assets owned or operated by them which in each case
could reasonably be expected to have a Material Adverse Effect. To the best
knowledge of the Borrower, no other violation of Environmental Law exists which
could reasonably be expected to have a Material Adverse Effect.
SECTION 3.11. No Default; Event of Default. None of the Borrower or any
----------------------------
other Loan Party is in default under any System Contract or Loan Document as of
the Closing Date. As of any date representations and warranties are made or
deemed made under this Agreement subsequent to the Closing Date, (a) none of the
Borrower or any other Loan Party is in default under any System Contract which
could reasonably be expected to have a Material Adverse Effect and (b) no
Default, Event of Default or Designated Event has occurred and is continuing.
SECTION 3.12. Properties. The Borrower and each Subsidiary has good
----------
title to, valid leasehold interests in or an indefeasible right to use all its
real and personal property material to its business free and clear of all Liens,
except for Permitted Encumbrances and minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
SECTION 3.13. Taxes. To the best knowledge of the Borrower, as of the
-----
Closing Date, neither the Borrower, any of the Subsidiaries nor the System is
subject to any material tax in any jurisdiction, except for taxes set forth on
Schedule 3.13. Each of the Borrower and the Subsidiaries has timely filed or
-------------
caused to be filed all tax returns and reports required to have been filed by
such Person and has paid or caused to be paid all Taxes shown to be due on such
returns except Taxes subject to a Contest.
SECTION 3.14. Federal Regulations. The Borrower is not 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 U and X of the Board of Governors of the Federal
Reserve System 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
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"margin stock" as so defined or for any purpose which violates the provisions of
the Regulations of such Board of Governors.
SECTION 3.15. 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 3.16. Investment Company Act. Neither the Borrower nor any
----------------------
Subsidiary is an "investment company" as defined in, or subject to regulation
under, the Investment Company Act of 1940.
SECTION 3.17. Security Documents. The recordings, filings and possessions
------------------
set forth on Schedule 3.17 are, on and as of the Closing Date, all the
-------------
recordings, filings, possessions and other actions necessary and appropriate to
establish, protect and perfect the Secured Parties' security interest in the
right, title, estate and interest of the Borrower and the Subsidiaries in and to
the Collateral which can be perfected by the filing of Uniform Commercial Code
financing statements or by possession by the Administrative Agent or pursuant to
Bermuda law (the "Perfectible Collateral"). The Security Documents are effective
----------------------
to create in favor of the Secured Parties valid and enforceable first Liens on,
and first security interests in, all right, title, estate and interest of the
Borrower and the Subsidiaries in and to the Perfectible Collateral.
SECTION 3.18. Principal Place of Business. As of the Closing Date, the
---------------------------
principal place of business or registered office of business, as applicable, of
the Borrower and each Subsidiary is set forth on Schedule 3.18, and such
-------------
principal places of business and registered offices shall not be changed without
the prior written consent of the Administrative Agent (such consent not to be
unreasonably withheld).
SECTION 3.19. Disclosure. The written factual information furnished by (or
----------
based on written information furnished by) the Borrower to the Lenders in
connection with the System or the negotiation of the Loan Documents (including
the information contained in the Offering Memorandum and the Confidential
Memorandum) (excluding any financial projections and other estimates or views of
future circumstances), taken as a whole, does not contain, as of the Closing
Date, any untrue statements of material fact and does not omit to state, as of
the Closing Date, any material fact necessary in order to make the statements
contained therein, in light of the circumstances under which they were made, not
materially misleading and all written factual information hereafter furnished by
(or based on information furnished by) the Borrower to the Lenders in connection
with this Agreement or the System shall not contain any untrue statements of
material fact and will not omit to state any material fact necessary in order to
make the statements contained therein, in light of the circumstances under which
they were made, not materially misleading. The costs set forth in the Capital
Budget reflect, as of the Closing Date, the Borrower's best estimates of all
costs necessary for the construction, installation and financing of the System.
The Projections delivered by the Borrower to the Designated Agents on
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the Closing Date in accordance with Section 4.01(j) have been prepared in good
---------------
faith and have been based on assumptions which were reasonable at the time
prepared. The Operating Plan delivered with the initial Operating Budget has
been, and the Operating Budget for each ensuing Operating Year, as of the date
delivered to the Administrative Agent in accordance with the terms hereof, shall
have been, prepared by the Borrower in good faith and have been based on
assumptions which were reasonable at the time prepared. The Borrower has
disclosed, prior to the Closing Date, all material liabilities, direct and
contingent, of Parent and TBI not otherwise disclosed in the financial
statements referred to in Section 3.01.
------------
SECTION 3.20. Sufficiency of System Contracts. As of any date this
-------------------------------
representation is made or deemed to be made, the services to be performed and
other rights and interests granted or to be granted or obtained pursuant to or
as required by the System Contracts and the Loan Documents comprise all of the
material services, materials and property interests required to perform the
System Activities being performed as of such date.
SECTION 3.21. Immunity. Neither the Borrower nor any Subsidiary is entitled
--------
to claim for itself, any of its assets or the System immunity from suit,
execution, attachment or other legal process in any proceeding in any
jurisdiction in connection with any of the Loan Documents or System Contracts to
which it is a party.
SECTION 3.22. Export Control. Each of the Borrower and the Subsidiaries is
--------------
in compliance in all material respects with all U.S. export laws and regulations
applicable to it.
SECTION 3.23. Foreign Corrupt Practices Act. None of the Borrower, any
-----------------------------
Subsidiary or any of its officers, directors, employees, agents or affiliates,
acting on its behalf, has taken any action in connection with the System that
violates the Foreign Corrupt Practices Act of the United States, if applicable.
SECTION 3.24. Intellectual Property. Each of the Borrower and the
---------------------
Subsidiaries owns or is licensed or otherwise has the right to use (and has
maintained in full force and effect and has not abandoned) or obtain all of the
trademarks, copyrights, patents, licenses and other intellectual property rights
that are reasonably necessary for the operation of its businesses, without
conflict with the rights of any other Person and free of Liens (other than
Permitted Encumbrances), except where the failure to have any such rights could
not reasonably be expected to have a Material Adverse Effect.
SECTION 3.25. Year 2000 Compliance. Each of the Borrower and the
--------------------
Subsidiaries has reviewed the areas within its business and operations which
could be adversely affected by, and has developed or is developing a program to
address on a timely basis, the "Year 2000 Problem" (that is, the risk that
computer applications used by such Person may be unable to recognize and
properly perform date-sensitive functions involving certain dates prior to and
any date after December 31, 1999). Except as set forth in the Offering
Memorandum, based on such review and program, the Year 2000 Problem could not
reasonably be expected to have a Material Adverse Effect.
-66-
SECTION 3.26. Subordination of Certain Payments. Notwithstanding any
---------------------------------
bankruptcy, insolvency, reorganization, amalgamation, moratorium or similar
proceeding in respect of the Borrower, during any Term C Loan Guaranteed Period,
(a) all payment obligations of the Borrower to the Term C Loan Guarantor (other
than the payment of Term C Loan Guaranty Fees) pursuant to the Term C Loan
Guaranty Reimbursement Agreement (the "Guaranty Reimbursement Payments") will be
-------------------------------
subordinated to all Obligations, including the Obligation to pay principal of
and interest on the Loans and fees in connection therewith, (b) such
subordination of the Guaranty Reimbursement Payments will be enforceable against
the Term C Loan Guarantor by the Lenders and (c) all Obligations constitute
"Senior Obligations" under and for purposes of the Term C Loan Guaranty
Reimbursement Agreement. All payments to the Term C Loan Guarantor made by the
Borrower or from the liquidation of its property will be subject to such
subordination. The Borrower acknowledges that the Administrative Agent, the
Syndication Agent, the Arranger and each Lender is entering into this Agreement,
and has agreed to extend the Credit Extensions, in reliance upon the
subordination of the Guaranty Reimbursement Payments.
ARTICLE IV
CONDITIONS
----------
SECTION 4.01. Conditions Precedent to Effectiveness. This Agreement shall
-------------------------------------
become effective upon the fulfillment of, or waiver by the Majority Lenders of,
each of the following conditions precedent:
(a) Loan Documents. The Administrative Agent shall have received,
--------------
with a counterpart for each Lender, each of the following documents:
(i) this Agreement, duly executed and delivered by each of
the parties hereto;
(ii) the Parent Pledge Agreement, duly executed and
delivered by Parent and the Administrative Agent, together with (A)
certificates representing all of the Equity Interests of the Borrower,
(B) undated share transfer forms for such Equity Interests, executed
in blank and delivered by a duly authorized officer of Parent and (C)
duly executed intercompany promissory notes by the Borrower, each
endorsed in blank;
(iii) the Borrower Pledge and Security Agreement, duly
executed and delivered by the Borrower and the Administrative Agent,
together with (A) certificates representing all of the Equity
Interests of ANBL, TBI and GCL, (B) undated share transfer forms for
such Equity Interests, executed in blank and delivered by a duly
authorized officer of the Borrower and (C) duly executed intercompany
promissory notes by ANBL, TBI and GCL, each endorsed in blank;
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(iv) the Subsidiary Pledge and Security Agreement, duly
executed and delivered by each Subsidiary party thereto and the
Administrative Agent, together with (A) certificates representing all
of the Equity Interests of each direct subsidiary of each such
Subsidiary and (B) undated share transfer forms or stock powers, as
applicable, for such Equity Interests, executed in blank and delivered
by a duly authorized officer of the applicable Subsidiary and (C) duly
executed intercompany promissory notes by each such Subsidiary, each
endorsed in blank;
(v) the Subsidiary Guaranty, duly executed and delivered
by each Subsidiary; and
(vi) the Term C Loan Guaranty, duly executed and delivered
by the Term C Loan Guarantor.
(b) System Contracts. The Administrative Agent shall have received
----------------
each of the following documents, in each case in form and substance
reasonably satisfactory to the Designated Agents and duly certified as a
true and complete copy thereof and as being in full force and effect by a
Responsible Officer of the Borrower as of the Closing Date:
(i) the Supply Contract;
(ii) the Supply Contract Guaranty; and
(iii) the Term C Loan Guaranty Reimbursement Agreement.
(c) Legal Opinions. The Administrative Agent shall have received,
--------------
with a counterpart for each Lender, the following executed legal opinions,
each dated the Closing Date and in each case in form and substance
reasonably satisfactory to the Designated Agents:
(i) the legal opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda
counsel to the Loan Parties;
(ii) the legal opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇ L.L.P., special
New York and U.S. regulatory counsel to the Loan Parties;
(iii) the legal opinion of Travieso, Evans, Hughes, Arria,
▇▇▇▇▇▇ & Paz, special Venezuelan counsel to the Loan Parties, with
respect to the Landing License in Venezuela;
(iv) the legal opinion of ▇▇▇▇▇▇ & Advogados, special
Brazilian counsel to the Loan Parties, with respect to the Landing
License in Brazil;
(v) the legal opinion of in-house counsel to the
Contractor;
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(vi) the legal opinion of in-house counsel to the Term C
Loan Guarantor and the Supply Contract Guarantor; and
(vii) the legal opinion of ▇▇▇▇▇▇, ▇▇▇▇ & Priest, New York
counsel to the Contractor, the Term C Loan Guarantor and the Supply
Contract Guarantor.
(d) Independent Engineer's Report. The Administrative Agent shall be
-----------------------------
satisfied that it shall receive the final report of the Independent
Engineer, in form and substance reasonably satisfactory to the Designated
Agents, within 10 Business Days after the Closing Date.
(e) Market Consultant's Report. The Administrative Agent shall be
--------------------------
satisfied that it shall receive the final report of the Market Consultant,
in form and substance reasonably satisfactory to the Designated Agents,
within 10 Business Days after the Closing Date.
(f) Insurance Consultant's Report. The Administrative Agent shall be
-----------------------------
satisfied that it shall receive a report of the Insurance Consultant, in
form and substance reasonably satisfactory to the Designated Agents, within
10 Business Days after the Closing Date, which report shall address the
adequacy of the insurance required to be maintained by the Contractor under
the Supply Contract (other than as to levels of self-insurance and
deductibles) as well as the adequacy of the insurance proposed to be
maintained by the Borrower and the Subsidiaries.
(g) Insurance. The Administrative Agent shall have received a
---------
certificate of the Insurance Consultant stating that all required insurance
policies to be maintained by the Borrower and the Subsidiaries on the
Closing Date pursuant to this Agreement have been obtained and are in full
force and effect.
(h) Capital Budget. The Administrative Agent shall have received,
--------------
with a copy for each Lender, a construction and capital budget and
construction drawdown schedule (including a drawdown schedule with respect
to the Loans) (as amended in accordance with the terms hereof, the
"Capital Budget"), in form and substance reasonably satisfactory to the
---------------
Designated Agents, which sets forth all Capital Costs to be incurred prior
to System Final Completion.
(i) Governmental Actions. The Administrative Agent shall have
--------------------
received evidence reasonably satisfactory to the Designated Agents that the
Borrower and the Subsidiaries have appropriately filed, or caused to be
filed, all necessary applications for the issuance of all Governmental
Actions, except such Governmental Actions determined to be immaterial by
the Administrative Agent and the Independent Engineer and except for the
application in 5enezuela with respect to Backhaul Service, and the
Administrative Agent shall have received certified true copies of each of
the foregoing and shall have no reason to believe any of the same shall not
be granted in a reasonable period of time.
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(j) Projections. The Administrative Agent shall have received, with
-----------
a copy for each Lender, a copy of the Projections, certified as of the
Closing Date by a Responsible Officer of the Borrower as being prepared in
good faith and based on reasonable assumptions.
(k) Security Interests (Recordings and Filings). Each of the
-------------------------------------------
documents and instruments set forth on Schedule 3.17 shall have been
-------------
delivered to the Administrative Agent for recording or filing or
possession, or shall have been recorded or filed in the respective places
or offices set forth on Schedule 3.17, and any and all recording and filing
-------------
fees with respect thereto shall have been paid.
(l) Equity Contributions. The Designated Agents shall be reasonably
--------------------
satisfied that Parent has received a capital contribution or proceeds from
new equity issuances of at least $240,000,000 (the "Net Equity Proceeds"),
-------------------
and that such amount (net of the fees and expenses set forth in the Capital
Budget) has been contributed as a capital contribution to the Borrower.
(m) Issuance of Parent Senior Notes. The Designated Agents shall be
-------------------------------
reasonably satisfied that Parent has received an amount equal to at least
$300,000,000 in gross cash proceeds from the issuance of the Parent Senior
Notes (the "Parent Senior Note Proceeds"), and that such amount (net of the
---------------------------
fees and expenses set forth in the Capital Budget) has been contributed as
a capital contribution to the Borrower.
(n) Repayment of Indebtedness. All Indebtedness of the Borrower and
-------------------------
the Subsidiaries outstanding prior to the Closing Date and set forth in the
Capital Budget shall have been repaid in full.
(o) Certain Payments. The Designated Agents shall be reasonably
----------------
satisfied that (a) provisions has been made for the initial payment to the
Contractor required under the Supply Contract and (b) the Term C Loan
Guarantor has received the initial payment due to it prior to the Closing
Date pursuant to the Term C Loan Guaranty.
(p) No Violation of Law. The consummation of the transactions
-------------------
contemplated by the Loan Documents and by the System Contracts shall not
violate any Requirement of Law (except where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect).
(q) Financial Statements. The Administrative Agent shall have
--------------------
received the financial statements referred to in Section 3.01, certified as
------------
such by a Responsible Officer of the Borrower.
(r) Fees and Expenses. The Administrative Agent, the Arranger and
-----------------
the Syndication Agent shall have received all fees due and payable on or
before the Closing Date, and the Administrative Agent and the Arranger
shall have received all expenses
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(including counsel fees and expenses) due and payable by the Borrower to
the Administrative Agent and the Arranger on or prior to the Closing Date
to the extent then invoiced.
(s) Agent for Service of Process. The Administrative Agent shall
----------------------------
have received evidence reasonably satisfactory to the Designated Agents
that the Borrower and each other Loan Party that does not have an office in
the United States has irrevocably appointed an agent in New York, New York
for service of process.
(t) Corporate Proceedings. The Administrative Agent shall have
---------------------
received a copy of the resolutions, in form and substance reasonably
satisfactory to the Designated Agents, of the Board of Directors of each of
Parent, the Borrower and each Subsidiary authorizing, as applicable, (i)
the execution, delivery and performance of this Agreement and the other
Loan Documents and System Contracts to which it is a party, (ii) with
respect to the Borrower only, the Borrowings contemplated hereunder and
(iii) the granting by it of the Liens created pursuant to the Security
Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of such Person as of the Closing Date, which
certificate shall be in form and substance reasonably satisfactory to the
Designated Agents and shall state that the resolutions thereby certified
are in full force and effect and have not been amended, modified, revoked
or rescinded.
(u) Incumbency Certificate. The Administrative Agent shall have
----------------------
received a certificate of each of Parent, the Borrower and each Subsidiary,
dated the Closing Date, as to the incumbency and signature of the officers
of such Person executing any Loan Document or System Contract, in form and
substance reasonably satisfactory to the Designated Agents, executed by the
President or any 5ice President and the Secretary or any Assistant
Secretary of such Person.
(v) Corporate Documents. The Administrative Agent shall have
-------------------
received true and complete copies of the memorandum of association and bye-
laws (or such other organizational and governing documents) of each of
Parent, the Borrower and each Subsidiary, certified as of the Closing Date
as complete and correct copies thereof by a Responsible Officer of such
Person.
(w) Closing Date Certificate. The Administrative Agent shall have
------------------------
received the Closing Date Certificate, dated the Closing Date and duly
executed by a Responsible Officer of the Borrower, stating that (a) no
default in any material respect as to the Borrower or the Subsidiaries has
occurred and is continuing under any System Contract and (b) to the best
knowledge of the Borrower, no default in any material respect as to any
other party thereto has occurred and is continuing under any System
Contract, together with all attachments thereto.
(x) Representations and Warranties. All representations and
------------------------------
warranties made by the Borrower and each other Obligor in any Loan Document
or System Contract shall be
-71-
true and correct in all material respects when made (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).
(y) No Default or Event of Default. No Default or Event of Default
------------------------------
shall have occurred and be continuing as of the Closing Date.
(z) Satisfactory Documentation. All documentation shall be
--------------------------
reasonably satisfactory to the Designated Agents.
The Administrative Agent shall notify the Borrower and the Lenders of the
Closing Date, and such notice shall be conclusive and binding.
SECTION 4.02. Conditions Precedent to Availability of Term D Loans and to
-----------------------------------------------------------
Initial Credit Extensions (other than Term D Loans). The availability to the
---------------------------------------------------
Borrower of the Term D Loans (after the funding of the proceeds of such Term D
Loans into the Construction Account) and the obligation of each Lender to make
its initial Loans (other than Term D Loans) available on the occasion of the
initial Borrowing of Loans (other than Term D Loans), and, if applicable, of the
Issuer to issue its initial Letter of Credit, shall be subject to the
fulfillment of, or waiver by the Majority Lenders of, each of the following
conditions precedent:
(a) Equity Contributions. Unless such Borrowing is comprised solely
--------------------
of Working Capital Loans and/or Term A Loans to be used for working capital
purposes, the Administrative Agent shall have received evidence reasonably
satisfactory to the Designated Agents that the Borrower has spent (or,
simultaneously with the application of the proceeds of such Borrowing, will
have spent) an amount equal to the Net Equity Funding Commitment on System
Activities, the payment of transaction and other costs, and the repayment
of Indebtedness, all in accordance with the Capital Budget.
(b) Governmental Actions (other than Landing Licenses). Unless such
--------------------------------------------------
Borrowing is comprised solely of Working Capital Loans and/or Term A Loans
to be used for working capital purposes, the Administrative Agent shall
have received a certificate of a Responsible Officer of the Borrower
stating that each Governmental Action (other than Landing Licenses) set
forth on Schedule 3.08 which is required in accordance with such Schedule
-------------
(as such Schedule may be amended or supplemented in accordance with Section
-------
3.08) to be obtained on or prior to the date of such Borrowing shall have
----
been duly obtained, except for those Governmental Actions specifically
described in such certificate (the "Delinquent Governmental Actions") which
-------------------------------
have not been obtained by the date of such Borrowing; provided that (i) the
--------
failure to obtain any such Delinquent Governmental Action by the date of
such Borrowing could not reasonably be expected to have a Material Adverse
Effect and (ii) if requested by the Administrative Agent and to the extent
applicable (i.e., such matter is within the expertise of counsel), the
----
Borrower shall deliver an opinion of appropriate regulatory counsel, in
form and substance reasonably satisfactory to the Designated Agents,
stating
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that such counsel has no reason to believe that such Delinquent
Governmental Actions could not be obtained in due course.
(c) Landing Licenses. Unless such Borrowing is comprised solely of
----------------
Working Capital Loans and/or Term A Loans to be used for working capital
purposes, the Administrative Agent shall have received (i) a certificate of
a Responsible Officer of the Borrower stating that each Landing License set
forth on Schedule 3.08 which is required in accordance with such Schedule
-------------
to be obtained on or prior to the date of such Borrowing shall have been
duly obtained or, with respect to any required Landing License which has
not been so obtained by such date (the "Delinquent Landing Licenses"), such
---------------------------
certificate shall set forth the details associated with any such delay and
be accompanied by an opinion of the Borrower's regulatory counsel, in form
and substance reasonably satisfactory to the Designated Agents, stating
that there should be no material impediment to receiving such Delinquent
Landing License and that it is reasonable to expect that such Delinquent
Landing License will be obtained within three months after the date set
forth on Schedule 3.08 for the procurement of such Delinquent Landing
-------------
License. Once issued, each Landing License shall be in full force and
effect and shall not be subject to any appeal or contest where there is a
material risk that such Landing License will be revoked.
(d) Additional Collateral. The Administrative Agent shall have
---------------------
received all Collateral required to be delivered pursuant to this Agreement
and the other Loan Documents and not delivered on the Closing Date,
together with all documents and instruments, and the completion of all
filings and recordings, required in connection therewith.
(e) System Contracts. The Administrative Agent shall have received
----------------
copies of each System Contract (other than Capacity Sales Agreements and
Capacity Swap Agreements) entered into after the Closing Date, in each case
duly certified as a true and complete copy thereof and as being in full
force and effect by a Responsible Officer of the Borrower.
(f) Legal Opinions. The Administrative Agent shall have received,
--------------
with a counterpart for each Lender, opinions of legal counsel for the Loan
Parties relating to all guaranties and Collateral not theretofore opined to
as the Administrative shall reasonably request, which legal opinions shall
be in form and substance reasonably satisfactory to the Designated Agents.
SECTION 4.03. Conditions Precedent to All Credit Extensions. The
---------------------------------------------
obligation of each Lender to make a Loan on the occasion of any Borrowing
(including the initial Borrowing), and of the Issuer to issue, renew or extend
the maturity or expiration date of any Letter of Credit, shall be subject to the
fulfillment of, or waiver by the Majority Lenders of, each of the following
conditions precedent:
-73-
(a) Representations and Warranties. All representations and
------------------------------
warranties made by the Borrower and each other Loan Party in any Loan
Document shall be true and correct in all material respects when made
(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).
(b) No Event of Default or Event of Loss. No payment Default or
------------------------------------
Event of Default shall have occurred and be continuing on such date, and no
Event of Loss shall have occurred and be continuing on such date (i) which
Event of Loss could reasonably be expected to have a Material Adverse
Effect or (ii) prior to the Commercial Operation Date, with respect to
which Event of Loss the cost to repair is in excess of $2,500,000 unless
(A) the Borrower is able to certify (as confirmed by the Independent
Engineer) in its reasonable judgment that the System can be completed by
the Guaranteed Completion Date with the Loans, equity and insurance
payments available to it or (B) the risk of loss with respect to that
portion of the System giving rise to the Event of Loss is borne by the
Contractor under the Supply Contract.
(c) No Change in Law. No Change in Law shall have occurred that
----------------
would make any Lender's participation in the transactions contemplated by
the Loan Documents illegal (unless the aggregate Commitment or Commitments
of such Lender or Lenders comprised less than 5% of the aggregate
Commitment of all the Lenders and the Independent Engineer shall have
certified to the Designated Agents that sufficient funding is available to
pay the portion of the Commitments which may not be funded due to such
Change in Law).
(d) No Force Majeure. No event of force majeure shall exist which at
----------------
such time permits any party (other than the Borrower or any Subsidiary) to
any Material System Contract to terminate such Material System Contract
(other than, except during any Term C Loan Guaranteed Period, the Term C
Loan Guaranty Reimbursement Agreement).
(e) Construction Progress Certificate. Unless such Borrowing is
---------------------------------
comprised solely of Working Capital Loans, Term A Loans to be used for
working capital purposes and/or Term D Loans to be funded into the
Construction Account, the Administrative Agent shall have received a
Construction Progress Certificate; provided that if such Construction
--------
Progress Certificate indicates that the Independent Engineer or ANBL is
disputing any invoice under the Supply Contract, the proceeds of the Loans
will be placed into the Dispute Account in accordance with the terms of the
Supply Contract and the Payment Escrow Agreement.
(f) Borrowing Request. The Administrative Agent shall have received
-----------------
a Borrowing Request in accordance with Section 2.03, with appropriate
------------
insertions and attachments, executed by a Responsible Officer of the
Borrower.
(g) Borrowing Certificate. The Administrative Agent shall have
---------------------
received a
-74-
Borrowing Certificate, dated the date of such Borrowing, with appropriate
insertions and attachments, executed by a Responsible Officer of the
Borrower.
(h) Term A Loans. If such Borrowing is comprised in whole or in part
------------
of Term A Loans, the TBI Leverage Ratio shall be less than or equal to
5.00:1, as set forth in reasonable detail in a certificate, dated the date
of such Borrowing, delivered to the Administrative Agent by the chief
financial officer or controller of the Borrower.
(i) Term C Loans. If such Borrowing is comprised in whole or in part
------------
of Term C Loans, (a) the sum of (i) the cumulative Qualified Capacity
Revenue as of the date of such Borrowing and (ii) the aggregate amount of
Term C Loans guaranteed under the Term C Loan Guaranty, is equal to or
greater than all Term C Loans to be outstanding after giving effect to such
Borrowing, as set forth in reasonable detail in a certificate, dated the
date of such Borrowing, delivered to the Administrative Agent by a
Responsible Officer of the Borrower, together with certified true copies of
any Qualified Capacity Agreements then in effect, (b) unless the Term C
Loan Guarantor otherwise agrees or until all of the Borrower's obligations
under the Term C Loan Guaranty are discharged in full, at least 50% of the
aggregate Term A Loan Commitment and all of the aggregate Term B Loan
Commitment shall have been funded prior to the date of such Borrowing, and
(c) the Borrower has certified in writing to the Administrative Agent that
all Term C Loan Guaranty Fees due and payable as of the date of such
Borrowing have been, or contemporaneously with such Borrowing will be, paid
in full.
ARTICLE V
AFFIRMATIVE COVENANTS
---------------------
Until 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 Loan Documents shall have been paid in full, all Letters of Credit
shall have expired or terminated (or shall have been cash collateralized on
terms reasonably acceptable to the Administrative Agent and the Issuer) and all
LC Disbursements shall have been reimbursed, the Borrower covenants and agrees
with the Administrative Agent, the Syndication Agent, the Arranger, the Issuer
and the Lenders as set forth in this Article.
SECTION 5.01. Financial Statements and Other Information. The Borrower
------------------------------------------
shall deliver to the Administrative Agent, with a copy for each Lender, the
following:
(a) within 90 days after the end of each fiscal year of the Borrower,
its audited consolidated balance sheet and related statements of
operations, shareholders' equity and cash flows as of the end of and for
such year, accompanied by unaudited consolidating statements for the
Borrower and the Subsidiaries for such year setting forth in each case in
comparative form the figures for the previous fiscal year, all such
consolidated
-75-
statements reported on by independent public accountants of recognized
national standing (without qualification or exception as to the scope of
such audit), and all such consolidating statements certified by a
Responsible Officer of the Borrower, in each case to the effect that such
financial statements present fairly in all material respects the financial
condition and results of operations of the Borrower and its consolidated
Subsidiaries in accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower commencing with the fiscal
quarter ending June 30, 1999 (or, with respect to the fiscal quarter ending
June 30, 1999, 60 days after the end of such fiscal quarter), its
consolidated balance sheet and related statements of operations,
shareholders' equity and cash flows as of the end of and for such fiscal
quarter and the then elapsed portion of the fiscal year, accompanied by
consolidating statements for the Borrower and the Subsidiaries for
comparable periods, 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 Borrower as presenting fairly in all material
respects the financial condition and results of operations of the Borrower
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 financial statements under
clause (a) or (b) above, a certificate of a Responsible Officer of the
---------- ---
Borrower certifying to such officer's knowledge whether a Default or
Designated Event has occurred and, if a Default or Designated Event has
occurred, specifying the details thereof and any action taken or proposed
to be taken with respect thereto;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm, if available from
------ ---
such accounting firm, that reported on such financial statements (which
certificate may be limited to accounting matters and may disclaim
responsibility for legal interpretations) stating whether they obtained
knowledge during the course of their examination of such financial
statements of any Default or Designated Event (which certificate may be
limited to the extent permitted by accounting rules or guidelines);
(e) if there has been a material Change in Law with respect to or
affecting Collateral which could reasonably be expected to adversely affect
the Lenders or there have been material additions to, or changes in, or a
change in location of, a material portion of, the Collateral, at the
reasonable request of the Administrative Agent, an opinion of counsel
addressed to the Administrative Agent and the Lenders covering such
collateral security in a manner reasonably satisfactory to the
Administrative Agent; and
(f) such other information respecting the conditions or operations,
financial or otherwise, of the Borrower or any Subsidiary as the
Administrative Agent or any Lender
-76-
may from time to time reasonably request.
SECTION 5.02. Reports. (a) The Borrower shall deliver to the
-------
Administrative Agent, with a copy for each Lender, within 15 days after the end
of each calendar quarter (commencing with the calendar quarter ending on
December 31, 1999), a report which sets forth the aggregate sales of Capacity as
at the end of such quarter, the amount of Capacity remaining to be sold, any
terminations of sales of Capacity during such quarter, the purchase price
therefor and the date such payments shall become (or became) due. The Borrower
shall have no obligation to provide copies or otherwise disclose the contents of
individual Capacity Sales Agreements or Capacity Swap Agreements to any party
hereto, except the Borrower shall permit the Administrative Agent to review and
retain a copy of Capacity Sales Agreements and Capacity Swap Agreements (but, so
long as no Event of Default or Designated Event has occurred and is continuing,
not to make further copies thereof), so long as such information is kept subject
to the confidentiality obligation contained in Section 10.14 hereof; provided
------------- --------
(i) such disclosure shall always be deemed to have been clearly marked as
confidential and (ii) the exceptions set forth in clauses (d), (e), (f) and (g)
----------- --- --- ---
of Section 10.14 shall not be applicable to the confidentiality obligation set
-------------
forth herein so long as no Event of Default or Designated Event shall have
occurred or be continuing.
(b) The Borrower shall deliver to the Administrative Agent, promptly after
its receipt, such other reports (excluding ordinary correspondence) regarding
the System, the Borrower or the Subsidiaries as the Contractor or the Operator
is required to provide to the Borrower under the System Contracts, and shall
deliver to the Administrative Agent promptly upon receipt or transmission,
copies of all amendments, material waivers, written consents and other
modifications (including all material Contract 5ariations) under any Material
System Contract, and the Borrower shall use reasonable efforts to give to the
Administrative Agent in advance of execution, drafts of amendments to any
Material System Contract.
(c) The Borrower shall deliver to the Administrative Agent, within three
Business Days prior to each Principal Payment Date (but effective as of such
Principal Payment Date), a certificate of a Responsible Officer of the Borrower
setting forth reasonably detailed calculations demonstrating the Borrower's
compliance with Section 6.24.
------------
(d) The Borrower shall assist and cooperate with the Independent Engineer
in providing the Lenders with such reports as the Lenders through the
Administrative Agent shall reasonably request of the Independent Engineer
(including a monthly construction progress report).
(e) Concurrently with the obtaining of any Landing License or a ruling
that no Landing License is necessary (or as soon thereafter as is reasonably
practicable), the Borrower shall furnish to the Administrative Agent an
appropriate and favorable opinion of counsel to the effect that such Landing
License is in full force and effect and the only telecommunications license from
the applicable Governmental Authority necessary for the landing and operation of
the System as described in the applicable application or that no such Landing
License is necessary.
-77-
(f) At least one Business Day prior to each Principal Payment Date, the
Borrower shall deliver to the Administrative Agent a certificate setting forth
the Required Balance with respect to the Debt Reserve Account, the Parent
Interest Reserve Account and the Operating Reserve Account as of such date.
SECTION 5.03. Payment of Obligations. The Borrower shall, and shall cause
----------------------
each of the Subsidiaries to, pay at or before maturity or before they become
delinquent, as the case may be, all its material obligations of whatever nature,
except where the amount or validity thereof is subject to a Contest.
SECTION 5.04. Conduct of Business; System Completion. The Borrower and the
--------------------------------------
Subsidiaries shall engage solely in Permitted Activities. The Borrower shall
diligently enforce all of its rights under the Supply Contract and the Supply
Contract Guaranty and shall cooperate with, and take all reasonable action that
it can to assist, the Contractor to complete the System in accordance with the
terms of the Supply Contract.
SECTION 5.05. Existence. The Borrower shall, and shall cause each of the
---------
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 those as to which the
failure to maintain such rights, privileges and franchises could not reasonably
be expected to have a Material Adverse Effect; provided that the foregoing shall
--------
not prohibit any merger, consolidation, liquidation or dissolution permitted
under Section 6.03.
------------
SECTION 5.06. Compliance with Laws. The Borrower shall, and shall cause
--------------------
each of the Subsidiaries to, comply in all material respects with all
Requirements of Law applicable to it or its property, except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.07. Performance of Agreements. The Borrower shall, and shall
-------------------------
cause each of the Subsidiaries to, observe in all material respects the
covenants and agreements of the Borrower and the Subsidiaries contained in the
Material System Contracts.
SECTION 5.08. Taxes and Claims. (a) The Borrower shall, and shall cause
----------------
each of the Subsidiaries to, pay and discharge all Taxes lawfully imposed on it
or on its income or profits, or on any of its property prior to the date on
which penalties attach thereto unless such Tax is subject to a Contest.
-78-
(b) The Borrower shall use reasonable best efforts to maintain and keep in
full force and effect all clearance rulings, decrees or similar items necessary
to continue the Borrower's, ANBL's, GCL's and each other Bermuda Subsidiary's
(other than TBI) exemption from the impositions of any Tax or similar charge
(other than Taxes and other charges set forth on Schedule 3.13) under the laws
-------------
of Bermuda on the Borrower, such other entities and their respective assets and
revenues.
SECTION 5.09. Notices. The Borrower shall, promptly after a Responsible
-------
Officer of the Borrower has knowledge thereof, give written notice to the
Administrative Agent of (a) the occurrence of a Default or Event of Default, (b)
any payment default under any Contractual Obligation of the Borrower or any
Subsidiary or any other such default that could reasonably be expected to have a
Material Adverse Effect, (c) any litigation or similar proceeding affecting the
Borrower, any of the Subsidiaries or the System concerning any Governmental
Action or which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect, (d) 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,
(e) the execution of any Additional Contract (together with a copy thereof), (f)
any material event constituting force majeure under the Supply Contract or any
----- -------
other material delay in the construction of the System, (g) any loss or damage
to the Collateral in excess of $250,000 (whether or not insured), (h) the
cancellation or revocation of any material Governmental Action or insurance
maintained by the Borrower, (i) any Lien (other than Permitted Encumbrances)
against any collateral security or the System, (j) no less than five Business
Days prior thereto, any Transfers set forth in Section 6.04(e) and on a semi-
---------------
annual basis, all Transfers set forth in clauses (c) and (g) of Section 6.04,
----------- --- ------------
and (k) any other development that has resulted in, or could reasonably be
expected to result in, a Material Adverse Effect.
SECTION 5.10. Insurance. The Borrower shall at all times carry and
---------
maintain or cause to be carried and maintained insurance in accordance with the
provisions set forth on Schedule 5.10. All such insurance shall comply with the
-------------
other provisions set forth on Schedule 5.10.
-------------
SECTION 5.11. Fiscal Year. The fiscal year of the Borrower and the
-----------
Subsidiaries shall be the twelve-month period ending on December 31 of each
year.
SECTION 5.12. Use of Proceeds. The Borrower shall apply the proceeds of
---------------
Credit Extensions
(a) with respect to the Term Loans, to make intercompany advances
and/or equity contributions to certain Subsidiaries (evidenced, in the case
of intercompany advances, by intercompany promissory notes pledged to the
Secured Parties) to finance the construction and installation of the System
and to make intercompany advances and/or equity contributions to GCL
(evidenced, in the case of intercompany advances, by intercompany
promissory notes pledged to the Secured Parties), and to pay fees and
expenses directly related thereto, in each case in accordance with the
Capital Budget;
-79-
(b) with respect to the Term A Loans, (i) for working capital
purposes of the Borrower and the Subsidiaries and, in accordance with the
Capital Budget, for capital expenditures of TBI and GCL, and (ii) after the
Commercial Operation Date, for certain purposes as set forth in clause (c)
----------
of the definition of "Availability Period";
(c) with respect to the Working Capital Loans, to pay fees and
expenses related to the System, for working capital purposes of the
Borrower and the Subsidiaries and, in accordance with the Capital Budget,
for capital expenditures of TBI and GCL.
(d) With respect to all Loans, (i) prior to the Commercial Operation
Date, to pay interest on the Loans, Term C Loan Guaranty Fees and, so long
as no Blockage Event has occurred and is continuing, to make intercompany
advances to Parent (evidenced by intercompany promissory notes pledged to
the Secured Parties) to pay interest on the Parent Senior Notes and any
Parent Additional Notes, and (ii) to pay Backhaul Service Costs in an
aggregate amount not exceed $25,000,000 (provided that the remaining Term
--------
Loan Commitments, together with other funds available to the Borrower
would, in the reasonable judgment of the Administrative Agent, be
sufficient to pay the remaining amounts owing under the Supply Contract and
the other costs necessary to complete the System).
(e) With respect to Letters of Credit, for general corporate purposes
of the Borrower and the Subsidiaries.
SECTION 5.13. Environmental Matters. The Borrower shall, and shall cause
---------------------
each of the Subsidiaries to, comply in all material respects with any and all
applicable Environmental Laws, except where the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.14. Operating Budgets; Operating Plans. (a) Within 30 days of
----------------------------------
the date that the Primary Ring becomes operational, and after prior review by,
and the approval of, the Administrative Agent and the Independent Engineer
(which approval shall not be unreasonably withheld), the Borrower will adopt (i)
an operating budget detailing anticipated costs in connection with operating the
System (an "Operating Budget") for the initial Operating Year and (ii) an
----------------
operating plan updating the Projections (the "Operating Plan") for the period
--------------
from the first day of the initial Operating Year through the Maturity Date which
shall set forth the anticipated costs and revenues, by Operating Year, in
connection with operating the System during such period.
(b) Within 60 days of the commencement of each subsequent Operating Year,
and after prior review by and discussion with the Designated Agents and the
Independent Engineer, the Borrower will adopt an Operating Budget for such
Operating Year; provided that (i) any Operating Budget that provides for total
--------
costs in excess of 105% of the total costs set forth in the Operating Plan for
such Operating Year shall not be adopted without the prior written consent of
the Designated Agents and (ii) any Operating Budget which provides for total
operating costs in
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excess of the operating costs set forth in the Operating Plan for such Operating
Year, and such excess, when added to the Cumulative Overruns for all Operating
Years, would exceed an amount equal to 15% of the Benchmark Costs for all prior
Operating Years to date (including the current Operating Year), shall not be
adopted without the prior written consent of the Majority Lenders. For purposes
hereof, "Benchmark Costs" shall be the total operating costs for each Operating
---------------
Year set forth in the Operating Plan, and "Cumulative Overruns" shall be, at any
-------------------
time of determination, an amount equal to the difference between (a) the sum of
the actual operating costs for each complete Operating Year ended and (b) the
sum of Benchmark Costs for each such complete Operating Year ended; Cumulative
Overruns may be a negative number.
(c) The Borrower shall, simultaneously with the delivery of each Operating
Budget (other than the initial Operating Budget), deliver to the Administrative
Agent (for informational purposes only), an update of the Operating Plan.
(d) The Borrower shall deliver copies of the Operating Budgets for each
such Operating Year promptly to the Administrative Agent.
(e) The Borrower shall, promptly following its decision, if any, not to
exercise the Rio Ring Option, deliver to the Administrative Agent, a revised
Operating Budget, Operating Plan and set of the Projections, in each case
reasonably satisfactory to the Designated Agents.
SECTION 5.15. Governmental Actions. The Borrower shall (a) promptly make,
--------------------
or cause to make, all filings for all Governmental Actions required in
connection with the construction, installation or operation of the System as
soon as reasonably possible and in accordance with the Plan of Work (and, in any
event, in time to comply with the dates for procurement of Governmental Actions
set forth on Schedule 3.08), (b) assist the Contractor where necessary or
-------------
appropriate in all follow-up necessary to obtain on a timely basis all such
Governmental Actions and (c) from and after the date that any Segment or the
System is Ready for Commercial Acceptance or Ready for Provisional Acceptance,
maintain (or cause the Operator under the System Contracts to maintain) in full
force and effect all material Governmental Actions as are at the time necessary
in order to operate and maintain such Segment or the System, as applicable,
except where the failure to file or maintain such Governmental Actions could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.16. Cooperation with Independent Engineer. The Borrower shall,
-------------------------------------
and shall cause each Subsidiary to, keep the Independent Engineer fully informed
on a timely basis with respect to the design of, and other material matters
relating to, the System, and shall meet (and, to the extent within its control,
cause the Contractor to meet) the Independent Engineer at reasonable times and
upon reasonable notice to discuss any and all of the foregoing.
SECTION 5.17. Spare Parts. The Borrower shall, on and after the
-----------
Commercial Operation Date, maintain, or cause the Operator to maintain, spare
parts with respect to the System as are customary for the submarine fiber-optic
cable industry.
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SECTION 5.18. Interest Rate Protection. The Borrower shall enter into
------------------------
Rate Protection Agreements by or within 90 days after the Borrowing of at least
$25,000,000 of Term Loans hereunder, and thereafter within 90 days after
Borrowings of increments of at least $25,000,000 in the aggregate in excess
thereof, with respect to 50% of the outstanding principal amount of the Term
Loans for a period of not less than three years (or such other period or amount
as shall be reasonably satisfactory to the Borrower and the Administrative
Agent), in each case pursuant to documents reasonably satisfactory to the
Borrower and the Administrative Agent, in order to hedge the Borrower's interest
rate exposure on the Loans from and after such date.
SECTION 5.19. Revenue Account. The Borrower shall, and shall cause the
---------------
Subsidiaries to, deposit all of their respective Revenue (other than those being
applied to the immediate prepayment of the Loans) directly into the Revenue
Account or the applicable Subsidiary Account as required by Article VIII.
------------
SECTION 5.20. Maintenance of Process Agent. The Borrower shall, and shall
----------------------------
cause each of the Subsidiaries that does not maintain an office in New York to,
maintain in New York, New York a Person acting as agent to receive on its behalf
service of process.
SECTION 5.21. System Operation and Maintenance. The Borrower shall, and
--------------------------------
shall cause the Subsidiaries to, from and after any Segment or the System is
Ready for Commercial Acceptance or Ready for Provisional Acceptance, cause such
Segment or the System, as the case may be, to be operated and maintained in an
efficient, reasonable and business-like manner in accordance with the terms of
the System Contracts.
SECTION 5.22. Event of Loss. If an Event of Loss shall occur and no Event
-------------
of Default shall have occurred and be continuing and (a) in the Independent
Engineer's reasonable opinion it is feasible to restore, rebuild or replace the
affected portion of the System within one year, (b) in the Designated Agents'
reasonable opinion (upon consultation with the Independent Engineer) there are
or will be sufficient funds available to the Borrower (including from proceeds
of insurance) to restore, rebuild or replace the affected portion of the System
so that the System will be able to operate on a commercially feasible basis (and
in any event on a basis sufficient to pay the Loans and all other Obligations
owing to the Lenders prior to the Maturity Date), and (c) in the Independent
Engineer's reasonable opinion, it is reasonably likely that the Borrower and the
Subsidiaries will have as and when needed all rights of way and permits
necessary to restore, rebuild or replace the affected portion of the System,
then the Borrower, at its sole cost and expense, shall restore, rebuild or
replace the affected portion of the System.
SECTION 5.23. Books and Records; Inspection Rights. The Borrower shall,
------------------------------------
and shall cause each of the 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 Borrower shall,
and shall cause each of the Subsidiaries to, permit any representative of the
Lenders designated by the Administrative Agent, upon reasonable prior notice, to
visit and inspect its properties, to examine and make copies from its books and
records (other than examining and making copies with respect to Capacity Sales
Agreements and
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ Agreements, except to the extent set forth in Section 5.02(a)),
---------------
and to discuss its affairs, finances and condition with its officers and (at the
Borrower's expense during the continuance of a Default) its independent
accountants, all at such reasonable times and as often as reasonably requested.
SECTION 5.24. Export Control. The Borrower shall, and shall cause each of
--------------
the Subsidiaries to, comply in all material respects with all U.S. export laws
and regulations.
SECTION 5.25. Foreign Corrupt Practices Act. The Borrower shall, and
-----------------------------
shall cause each of the Subsidiaries to, comply in all material respects with
the Foreign Corrupt Practices Act of the United States, if applicable.
SECTION 5.26. Further Assurances. The Borrower 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 of this Agreement and the other Loan Documents, including with respect
to the maintenance of perfection of all Collateral that is perfectible and the
proper grant and perfection of Liens on perfectible assets hereafter acquired by
the Borrower or any of the Subsidiaries.
SECTION 5.27. Intellectual Property. (a) The Borrower shall not, and
---------------------
shall not permit any of the Subsidiaries to, do any act, or omit to do any act,
whereby any of the Borrower's or any Subsidiary's intellectual property may
lapse or become abandoned or dedicated to the public or unenforceable, unless
such lapse, abandonment, dedication or unenforceability could not reasonably be
expected to have a Material Adverse Effect.
(b) In no event shall the Borrower or any Subsidiary, or any of their
respective agents, employees, designees or licensees, file an application for
the registration of any intellectual property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency in any other country or any political subdivision thereof, unless it
promptly informs the Administrative Agent.
(c) The Borrower shall take, and shall cause the Subsidiaries to take, all
reasonably necessary steps, including in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office, and any foreign
counterpart of either, 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 intellectual property, 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.
SECTION 5.28. Future Subsidiaries. Without limiting the effect of any
-------------------
restriction contained herein upon any Person becoming, after the Closing Date,
either a direct or indirect Subsidiary of the Borrower, or upon the Borrower
acquiring additional Equity Interests of any
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new or existing Subsidiary, if any Person shall become a Subsidiary after the
Closing Date,
(a) The Borrower shall cause such Person to become a party to (i) the
Subsidiary Guaranty or a guaranty in substantially the form of the
Subsidiary Guaranty, and (ii) the Subsidiary Pledge and Security Agreement
or a pledge or security agreement in substantially the form of the
Subsidiary Pledge and Security Agreement, in either case, with such
modifications as the Administrative Agent may reasonably request or consent
to, in a manner reasonably satisfactory to the Administrative Agent;
(b) the Borrower shall pledge or cause to be pledged to the Secured
Parties all of the outstanding Equity Interests of such Subsidiary, along
with undated share transfer forms (or similar instruments) for such Equity
Interests, executed in blank (or, if any such Equity Interests are
uncertificated, confirmation and evidence satisfactory to the
Administrative Agent that the security interest in such uncertificated
securities has been perfected by the Administrative Agent in accordance
with Article 8 of the UCC or any similar law which may be applicable),
together with all intercompany promissory notes, duly endorsed in blank;
(c) the Administrative Agent shall have received from each such
Subsidiary (other than any newly formed Subsidiary), if applicable,
certified copies of Uniform Commercial Code Requests for Information or
Copies (Form UCC-11), or a similar search report certified by a party
acceptable to the Administrative Agent, dated a date reasonably near (but
prior to) the date of any such Person becoming a direct or indirect
Subsidiary, listing all effective financing statements, tax liens and
judgment liens which name such Person as the debtor and which are filed in
the jurisdictions in which filings are to be made pursuant to this
Agreement and the other Loan Documents, and in such other jurisdictions as
the Administrative Agent may reasonably request, together with copies of
such financing statements (none of which (other than financing statements
(i) filed pursuant to the terms hereof in favor of the Administrative Agent
(for the benefit of the Secured Parties), if such Form UCC-11 or search
report, as the case may be, is current enough to list such financing
statements, (ii) being terminated pursuant to termination statements that
are to be delivered on or prior to the date such Person becomes a
Subsidiary or (iii) in respect of protective filings or Liens permitted
under Section 6.02) shall cover any of the Collateral); and
------------
(d) the Administrative Agent shall have received from each such
Subsidiary executed copies of UCC financing statements (or equivalent
instruments) naming each such Subsidiary as the debtor and the
Administrative Agent as the secured party, suitable for filing under the
UCC (or the foreign equivalent, if any) of all jurisdictions as may be
necessary (or possible) or, in the reasonable opinion of the Administrative
Agent, desirable to perfect the first priority security interest of the
Secured Parties pursuant to the security agreement entered into by such
Subsidiary in such types of collateral as were perfected with respect to
other Subsidiaries as of the Closing Date,
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together, in each case, with such opinions of legal counsel for the Borrower
relating thereto as the Administrative Agent shall reasonably request, which
legal opinions shall be in form and substance reasonably satisfactory to the
Administrative Agent.
SECTION 5.29. Post-Closing Collateral; Mortgages. The Borrower shall,
----------------------------------
within the 90 days after the Closing Date (or such longer period as is necessary
with the consent of the Administrative Agent),
(a) with respect to each Subsidiary organized outside of Bermuda or
the United States of America, (i) cause each such Subsidiary to execute (A)
a Foreign Subsidiary Pledge Supplement, if required under applicable local
law, in form and substance reasonably satisfactory to the Administrative
Agent, and (B) the Subsidiary Guaranty (unless the Borrower, in the
exercise of its reasonable commercial efforts, shall have caused the
Subsidiary Guaranty to have been duly executed and delivered by the Closing
Date), (ii) cause each such Subsidiary to make all filings and obtain all
notarizations reasonably required in connection therewith to give the
Secured Parties a perfected security interest in the same type of property
that was perfected as of the Closing Date under the Subsidiary Pledge and
Security Agreement, (iii) subject all ownership interests in each such
Subsidiary to the Borrower Pledge and Security Agreement and (iv) deliver
to the Administrative Agent customary favorable legal opinions with respect
to the above;
(b) with respect to real property owned by the Borrower and the
Subsidiaries as of the Closing Date, or within 90 days after the
acquisition by the Borrower or any Subsidiary of real property not owned as
of the Closing Date, (i) execute, or cause such Subsidiary to execute, a
Mortgage, or its reasonable equivalent under applicable local law, in favor
of the Secured Parties and in form and substance reasonably satisfactory to
the Administrative Agent providing the Secured Parties with a first Lien
thereon, subject only to customary Liens which in any event do not
materially adversely effect (a) the Borrower's or such Subsidiary's use,
operation or enjoyment of such property for its intended purpose or (b) the
Secured Parties' rights or remedies under the Mortgage and (ii) cause to be
provided to the Administrative Agent, to the extent commercially feasible,
mortgagee's title insurance (or its reasonable equivalent) in amounts and
in form reasonably satisfactory to the Administrative Agent.
SECTION 5.30. TBI. The Borrower shall use all reasonable efforts to
---
promptly obtain all regulatory approvals so that TBI can own 100% of the Equity
Interests in TeleBermuda International LLC and, upon receiving such approval,
will cause TBI to exercise its option to own such Equity Interests and pledge
such Equity Interests to the Secured Parties pursuant to the Subsidiary Pledge
and Security Agreement.
SECTION 5.31. Achievement of Commercial Operation Date. The Borrower
----------------------------------------
shall, and shall cause the Subsidiaries to, use all reasonable commercial
efforts to cause the Commercial Operation Date to occur by the Guaranteed
Completion Date.
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ARTICLE VI
NEGATIVE COVENANTS
------------------
Until 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 Loan Documents have been paid in full, all Letters of Credit have
expired or terminated (or shall have been cash collateralized on terms
reasonably acceptable to the Administrative Agent and the Issuer) and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Administrative Agent, the Syndication Agent, the Arranger, the Issuer and
the Lenders as set forth in this Article.
SECTION 6.01. Indebtedness. The Borrower shall not, and shall not permit
------------
any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness,
except:
(a) Indebtedness incurred under the Loan Documents;
(b) Permitted Subordinated Debt;
(c) Capital Lease Obligations permitted by Section 6.11;
------------
(d) trade or other similar Indebtedness incurred in the ordinary
course of business and payable within 60 days;
(e) Indebtedness under, or constituting net exposure under, interest
Hedging Agreements entered into in accordance with Section 5.18 or other
------------
Hedging Agreements otherwise permitted by the Administrative Agent;
(f) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or another Subsidiary; provided that, (i) with
--------
respect to any Indebtedness of any Subsidiary to the Borrower, such
Indebtedness shall be evidenced by a promissory note pledged to the Secured
Parties by the Borrower on terms reasonably satisfactory to the
Administrative Agent, and (ii) with respect to any Indebtedness of the
Borrower to a Subsidiary, repayment of such Indebtedness shall be
subordinated to the repayment of the Credit Extensions and all other
Obligations under this Agreement and the other Loan Documents in a manner
reasonably satisfactory to the Administrative Agent;
(g) Guarantees by the Borrower of Indebtedness of any Subsidiary
otherwise permitted hereunder, and by any Subsidiary of Indebtedness of the
Borrower otherwise permitted hereunder (other than under clause (i) below)
----------
or any other Subsidiary otherwise permitted hereunder;
(h) reimbursement obligations of the Borrower incurred under the Term
C Loan
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Guaranty Reimbursement Agreement;
(i) Indebtedness incurred under the System Contracts; and
(j) other unsecured Indebtedness of the Borrower and the Subsidiaries
in an aggregate principal amount not to exceed $2,500,000 at any one time;
provided that no Indebtedness otherwise permitted by clauses (b), (c) or (j)
-------- ----------- --- ---
shall be assumed or otherwise incurred if a Default has occurred and is then
continuing or would result therefrom.
SECTION 6.02. Liens. The Borrower shall not, and shall not permit any
-----
Subsidiary to, create, incur, assume or permit to exist any Lien on the
Collateral or on the System or any of its other assets, except Permitted
Encumbrances.
SECTION 6.03. Fundamental Changes. The Borrower shall not, and shall not
-------------------
permit any Subsidiary to, merge into or amalgamate or consolidate with any other
Person, or permit any other Person to merge into or amalgamate or consolidate
with it, or liquidate or dissolve, except that (a) any Subsidiary may merge into
or amalgamate or consolidate with the Borrower in a transaction in which the
Borrower is the surviving Person, (b) any Subsidiary may merge into or
amalgamate or consolidate with another Subsidiary (other than any Subsidiary
which for any reason has not executed and delivered the Subsidiary Guaranty) in
a transaction in which the surviving or continuing entity is a wholly-owned
Subsidiary and (c) any Subsidiary may, with the prior written consent of the
Administrative Agent (such consent not to be unreasonably withheld or delayed),
liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and such
liquidation or dissolution is not disadvantageous in any material respect to the
Lenders.
SECTION 6.04. Sale of Assets. The Borrower shall not, and shall not
--------------
permit any Subsidiary to, sell, lease, convey, assign, transfer or otherwise
dispose of (each, a "Transfer") all or any portion of its assets except (a)
--------
Transfers of Capacity or other capacity in accordance with Section 6.23, (b)
------------
Transfers of assets by any Subsidiary to the Borrower, (c) Transfers of assets
in the ordinary course of business not required for the efficient operation of
the System for fair value with a book value not exceeding for all such Transfers
under this clause (c) $10,000,000 in the aggregate over the term of this
----------
Agreement, (d) Transfers of assets to Subsidiaries which have executed and
delivered the Subsidiary Guaranty and where the Equity Interests of such
Subsidiary is subject to a Lien in favor of the Administrative Agent (for the
benefit of the Secured Parties), but only to the extent necessary to facilitate
the obtaining of Landing Licenses or the minimization of material Taxes or
constituting an investment permitted by Section 6.05, (e) Transfers of obsolete
------------
equipment in connection with any Permitted System Upgrades and (f) Transfers of
obsolete, worn out or defective equipment and other assets for fair value in
cash; provided that the proceeds or the Net Cash Proceeds of a Transfer (i)
--------
under clauses (c), (e) and (f) shall be applied to the prepayment of the Loans
----------- --- ---
and cash collateralization of LC Exposure if required in accordance with Section
-------
2.11 and (ii) under clause (a) shall be deposited into the Revenue Account for
---- ----------
application in accordance with Article VIII.
------------
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SECTION 6.05. Investments, Loans, Advances, Guarantees and Acquisitions.
---------------------------------------------------------
(a) The Borrower shall not, and shall not permit any of the Subsidiaries to,
purchase, hold or acquire (including pursuant to any amalgamation or merger with
any Person that was not a wholly-owned Subsidiary prior to such merger) any
Equity Interests, 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, Guarantee 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 Borrower's or any of the Subsidiaries' income or profits are, or
might be, shared with any Person, except:
(i) Permitted Investments;
(ii) investments by the Borrower in a Subsidiary; provided that (A)
--------
such Subsidiary has executed and delivered the Subsidiary Guaranty and the
Equity Interests of such Subsidiary is subject to a first priority Lien in
favor of the Administrative Agent (for the benefit of the Secured Parties)
and (B) such investment is necessary to capitalize such Subsidiary in
accordance with applicable law, to facilitate the obtaining of Landing
Licenses or the minimization of material Taxes or to enable such Subsidiary
to acquire assets to be used to operate the System or otherwise fulfill
obligations incurred in connection with the System and reflected in the
Capital Budget or the Operating Budget;
(iii) loans or advances made by the Borrower to any Subsidiary and
made by any Subsidiary to the Borrower or any other Subsidiary; provided
--------
that (A) each such Subsidiary has executed and delivered the Subsidiary
Guaranty and the Equity Interests of such Subsidiary is subject to a first
priority Lien in favor of the Administrative Agent (for the benefit of the
Secured Parties) and (B) such loans or advances are necessary to facilitate
the obtaining of Landing Licenses or the minimization of material Taxes or
to enable such Subsidiary to acquire assets to be used to operate the
System or otherwise fulfill obligations incurred in connection with the
System and reflected in the Capital Budget or the Operating Budget;
provided that the requirements contained in the proviso to Section 6.01(f)
-------- ---------------
are satisfied;
(iv) Guarantees constituting Indebtedness permitted by Section 6.01;
------------
(v) the purchase or acquisition of Equity Interests of a Subsidiary
in accordance with Sections 5.28 and 6.19(c) or Section 6.18; and
------------- ------- ------------
(vi) the loan existing on the Closing Date made by the Borrower to
TeleBermuda International LLC in the principal amount of $25,000,000
(provided that such loan is evidenced by a promissory note pledged to the
---------
Secured Parties);
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provided that no investments, loans, advances or Guarantees otherwise permitted
--------
by clauses (ii), (iii), (iv) or (v) shall be assumed or otherwise made if a
------------ ----- ---- ---
Default has occurred and is then continuing or would result therefrom.
SECTION 6.06. Restricted Payments. The Borrower shall not, and shall not
-------------------
permit any of the Subsidiaries to, declare or make any Restricted Payment or any
payment in connection with any tax sharing arrangement except for (a) Restricted
Payments by the Subsidiaries to the Borrower and other Subsidiaries, (b)
distributions by the Borrower or any Subsidiary in respect of its Equity
Interests which are payable solely in additional Equity Interests of the
Borrower or such Subsidiary, but only to the extent such additional Equity
Interests is subject to a first priority Lien in favor of the Administrative
Agent (for the benefit of the Secured Parties), (c) so long as no Blockage Event
has occurred and is continuing, intercompany advances by the Borrower to Parent
pursuant to intercompany promissory notes pledged to the Secured Parties for
payment of interest on the Parent Senior Notes and any Parent Additional Notes
and Parent Expenses in accordance with Sections 8.08(a) and 8.08(d), (d) so long
---------------- -------
as no Blockage Event has occurred and is continuing, distributions by the
Borrower in respect of its Equity Interests from funds available to the Borrower
in accordance with Section 8.08(a), (e) so long as no Blockage Event has
---------------
occurred and is continuing, distributions by the Borrower in respect of its
Equity Interests from proceeds made available to the Borrower from the Special
Payment Account in accordance with Section 8.09 and (f) payments in connection
------------
with tax sharing arrangements among the Borrower and the Subsidiaries.
SECTION 6.07. Amendment of System Contracts, etc. (a) The Borrower shall
----------------------------------
not, and shall not permit the Subsidiaries to, enter into, amend, supplement or
otherwise modify, or grant any material waivers or material consents under, or
agree to any material contract variation or material discretionary or other
material change that requires the consent or agreement of the Borrower under,
any System Contract without the written consent of the Majority Lenders (such
consent not to be unreasonably withheld) other than (i) Contract Variations in
accordance with Section 6.08, (ii) administerial, clarifying, correcting or
------------
other immaterial amendments to any such System Contract which could not
reasonably be expected to have a Material Impact (it being understood that an
increased cost permitted pursuant to Section 5.14 shall not be deemed to
------------
constitute a "Material Impact" under clause (a) thereof solely by reason of such
----------
increased cost), (iii) other amendments, supplements or modifications not
involving the Supply Contract that do not involve increased costs to the
Borrower or any Subsidiary other than as permitted pursuant to Section 5.14 and
------------
which, in any event, could not reasonably be expected to have a Material Impact,
(iv) amendments, supplements or other modifications required to implement the
provisions of Section 6.09 or 6.10 and (v) amendments, supplements or other
------------ ----
modifications or waivers, consents, contract variations or other changes to
Capacity Sales Agreements and Capacity Swap Agreements so long as any such
amendments are on commercially reasonable terms and comply with the proviso to
Section 6.23; provided that no amendments, supplements or other modifications or
------------ --------
waivers, consents, contract variations or other changes to any Intercompany
Agreement shall be made without the prior written consent of the Administrative
Agent.
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(b) The Borrower shall not, and shall not permit the Subsidiaries to,
terminate or permit the termination of any (i) Material System Contract other
than in accordance with its terms, (ii) Capacity Sales Agreement or Capacity
Swap Agreement unless (A) such actions are commercially reasonable and (B) the
provisions of Section 6.23 and Section 6.24 are complied with at such time,
------------ ------------
(iii) the Term C Loan Guaranty Reimbursement Agreement (other during any Term C
Loan Guaranteed Period) or (iv) any other System Contract unless such other
System Contract is, at the reasonable request of the Designated Agents (upon
such consultation with the Independent Engineer as the Designated Agents shall
require), replaced with a new contract reasonably acceptable to the Designated
Agents.
(c) The Borrower and the Subsidiaries shall be permitted to replace
certain System Contracts in accordance with the terms of Article VII.
-----------
SECTION 6.08. Supply Contract. (a) The Borrower shall not, and shall not
---------------
permit the Subsidiaries to, without the prior written consent of the Required
Lenders (or, with respect to any Contract Variation that will not increase the
costs under the Supply Contract by more than $500,000 for any individual
Contract Variation and up to $2,000,000 in the aggregate for all Contract
Variations taken together, the Designated Agents), such consent in each case not
to be unreasonably withheld, enter into any Contract Variation, or grant any
waiver or consent under, the Supply Contract other than (i) Contract Variations,
waivers or consents made on an emergency basis to the extent there are funds
available for the payment thereof in the Capital Budget or the Construction
Contingency Reserve Account so long as such Contract Variation, waiver or
consent could not reasonably be expected to have a Material Adverse Effect, (ii)
Contract Variations, waivers or consents required to implement the provisions of
Section 6.09 and (iii) Contract Variations, waivers or consents required to
------------
implement the provisions of Section 6.10.
------------
(b) The Borrower shall not, and shall not permit the Subsidiaries to, (i)
without the prior written consent of the Required Lenders (such consent not to
be unreasonably withheld), (A) reduce the amount or change the date or basis for
payment of liquidated damages under Article 22 of the Supply Contract, (B)
reduce the duration of any warranty period under the Supply Contract, (ii)
without the prior written consent of the Designated Agents (based upon
consultation with the Independent Engineer and such consent not to be
unreasonably withheld), (A) reduce the scope of any warranty under the Supply
Contract, (B) reduce the scope or availability of intellectual property under
Article 18 of the Supply Contract and (C) materially change the terms of payment
as set forth in Article 5 of the Supply Contract.
(c) The Borrower shall not, and shall not permit the Subsidiaries to, (i)
without the prior written consent of the Designated Agents (based upon
consultation with the Independent Engineer and such consent not to be
unreasonably withheld), agree to (A) new acceptance testing as contemplated
under the definition of "Acceptance Testing" in the Supply Contract, (B) new
performance requirements as contemplated under the definition of "System
Performance Requirements" and any term or appendix or exhibit underlying the
substance of such definition or (C) any equitable adjustment to the Initial
Contract Price under Article 6C of the Supply
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Contract unless such adjustment is in accordance with this Section, and (ii)
without the prior written consent of the Required Lenders, (A) grant or
otherwise consent to any extension of time under the last sentence of Article 6D
of the Supply Contract or (B) agree to any arrangement to extend the Scheduled
RFS Date under Article 6D of the Supply Contract.
SECTION 6.09. Addition to Configuration. The Borrower shall not, and
-------------------------
shall not permit the Subsidiaries to, without the prior written consent of the
Majority Lenders (such consent to not be unreasonably withheld), add any
additional Landing Country or select, or agree to the selection of, any
alternative Landing Country to the contemplated configuration of the System
unless (a) in the case of adding an additional Landing Country, all costs
related to such addition are funded with equity funds made available to the
Borrower or Permitted Subordinated Debt or funds made available to the Borrower
for its sole benefit, in accordance with Sections 8.08(a) or is otherwise borne
----------------
exclusively by parties other than (and without recourse to) the Borrower and the
Subsidiaries, which in each case has been fully funded or has been committed to
on terms reasonably satisfactory to the Designated Agents, (b) such addition
could not reasonably be expected to have a Material Adverse Effect, (c) no
material liabilities of or costs to the Borrower or any of the Subsidiaries
shall be created which are not provided for from sources described in clause (a)
----------
above and (d) in the case of the selection of an alternative Landing Country,
the Independent Engineer has concurred that the conditions in the Supply
Contract underlying such selection have been met.
SECTION 6.10. Permitted System Upgrades. The Borrower shall not, and
-------------------------
shall not permit the Subsidiaries to, request that the Contractor perform any
Permitted System Upgrade unless the costs thereof are (a) funded with proceeds
from the Upgrade Reserve Account in accordance with Section 8.09(d), the
---------------
Borrower's portion of Excess Cash Flow or other funds made available to the
Borrower, for its sole benefit, in accordance with Sections 8.08(a) or (b)
----------------
funded with equity funds made from common stock of the Borrower or preferred
stock with provisions substantially similar to Permitted Subordinated Debt made
available to the Borrower or Permitted Subordinated Debt of the Borrower or is
otherwise borne by parties other than (and without recourse to) the Borrower and
the Subsidiaries, which in each case has been fully funded or has been committed
to on terms reasonably satisfactory to the Designated Agents.
SECTION 6.11. Leases. The Borrower shall not, and shall not permit the
------
Subsidiaries to, enter into any lease as a lessee thereunder except for (a)
leases of personal property in the ordinary course of business, (b) leases of
real property in the ordinary course of business, (c) Capital Lease Obligations
in an amount not to exceed $250,000 in any fiscal year of the Borrower and (d)
leases of Backhaul Capacity otherwise permitted hereunder.
SECTION 6.12. Change of Office. The Borrower shall not, and shall not
----------------
permit the Subsidiaries to, change the location of its principal place of
business unless the Borrower shall have given the Administrative Agent at least
30 days' prior written notice thereof and all action reasonably necessary or
advisable in the Administrative Agent's opinion to protect and perfect the Liens
and security interests in the Collateral shall have been taken.
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SECTION 6.13. Change of Name. The Borrower shall not, and shall not
--------------
permit the Subsidiaries to, change its name unless the Borrower shall have given
the Administrative Agent at least 30 days' prior written notice thereof and all
action reasonably necessary or advisable in the Administrative Agent's opinion
to protect and perfect the Liens and security interests in the Collateral shall
have been taken.
SECTION 6.14. Transactions with Affiliates. The Borrower shall not, and
----------------------------
shall not permit the Subsidiaries to, enter into any agreement with any
Affiliate of the Borrower except (a) as required by the Loan Documents or the
System Contracts, (b) transactions in the ordinary course of business which are
on fair and reasonable terms not less favorable than the Borrower or any
Subsidiary could obtain in an arm's-length transaction with a Person which is
not an Affiliate, (c) any agreement between the Borrower and any Subsidiary that
is directly or indirectly wholly-owned by the Borrower or between Subsidiaries
that are directly or indirectly wholly-owned by the Borrower and (d) any
transaction between the Borrower and Parent expressly permitted by a Loan
Document.
SECTION 6.15. Sale and Leaseback. The Borrower shall not, and shall not
------------------
permit the 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.
SECTION 6.16. Approval of Additional Contracts. The Borrower shall not,
--------------------------------
and shall not permit the Subsidiaries to, without the prior written consent of
the Required Lenders (such consent not to be unreasonably withheld), enter into
any Additional Contract other than (a) Capacity Sales Agreements, Capacity Swap
Agreements or other agreements or arrangements for the disposition of Capacity
entered into in accordance with Section 6.23, (b) pipeline and cable crossing
------------
agreements and other similar agreements entered into in the ordinary course of
business to facilitate the construction and installation of the System by the
Contractor, (c) Interconnect Agreements entered into in the ordinary course of
business, (d) other contracts in the ordinary course of business to the extent
amounts payable thereunder by the Borrower or any Subsidiary, if any, are
provided for in the Capital Budget or the Operating Budget, (e) other contracts
entered into in the ordinary course of business that could not reasonably be
expected to have a Material Adverse Effect and (f) with the prior written
consent of the Administrative Agent, if such Additional Contract relates to the
System and is being entered into as a quid pro quo for the purchase of Capacity
---- --- ---
by the counterparty thereto and the entering into or performance of such
Additional Contract could not reasonably be expected to have a Material Impact.
The Borrower shall be permitted to replace System Contracts as set forth in
Section 6.07 and Article VII. At the time any such Additional Contract is
------------ -----------
entered into (other than Capacity Sales Agreements, Capacity Swap Agreements and
agreements entered into pursuant to clause (b)), the Borrower and the Designated
----------
Agents (upon consultation with the Independent Engineer, if necessary) shall
designate such Additional Contract as either an "Additional Material Contract"
or an "Additional Non-Material Contract".
SECTION 6.17. Capital Expenditures. The Borrower shall not, and shall
--------------------
not permit the Subsidiaries to, make any expenditure in respect of the purchase
of capital assets, except for
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expenditures which could not reasonably be expected to adversely affect the
System and which are (a) covered by the Capital Budget or the then current
Operating Budget, (b) are funded solely from sources described in Section
-------
6.09(a), or (c) approved by the Majority Lenders in writing (after consultation
-------
with the Independent Engineer).
SECTION 6.18. Limitations on Transfer and Issuance of Interests. The
-------------------------------------------------
Borrower shall not, and shall not permit the Subsidiaries to, (a) permit the
transfer of any ownership interest in Subsidiaries, except in accordance with
Section 6.03, or (b) issue any additional ownership interests, unless (subject
------------
in any event to the provisions of Section 7.14) (i) such ownership interests are
------------
issued by the Borrower or are otherwise in accordance with Section 6.06(b) and
---------------
(ii) such ownership interests are being issued by a Subsidiary to the Borrower
or another Subsidiary (whether in addition to or substitution for the then
outstanding Equity Interests of such Subsidiary) and in each case are made
subject to the first priority Lien in favor of the Administrative Agent (for the
benefit of the Secured Parties); provided that, with respect to any such pledge
--------
agreement pledging the Equity Interests of the Borrower, the liability of the
shareholders of the Borrower shall be limited to the "Collateral" pledged
thereunder.
SECTION 6.19. Unrelated Activities; Abandonment; New Subsidiaries. (a)
---------------------------------------------------
The Borrower shall not, and shall not permit the Subsidiaries to, engage in any
activity other than Permitted Activities.
(b) The Borrower shall not abandon the diligent development, construction,
installation or operation of the System.
(c) The Borrower shall not, and shall not permit the Subsidiaries to,
create any new subsidiaries after the Closing Date other than (i) with the prior
written consent of the Administrative Agent or (ii) wholly-owned, special
purpose Subsidiaries created in connection with changes to the System
configuration permitted by this Agreement; provided that, in any event, (x) the
--------
Equity Interests of such Subsidiary shall be subject to the first priority Lien
of the Secured Parties and, (y) such Subsidiary shall have executed and
delivered to the Administrative Agent the Subsidiary Guaranty.
SECTION 6.20. Set-off. Without the prior written consent of the
-------
Administrative Agent (such consent not to be unreasonably withheld), the
Borrower shall not, and shall not permit the Subsidiaries to, exercise any right
of set-off with respect to amounts owing to it by the Contractor under the
Supply Contract.
SECTION 6.21. Changes in Capital Budget. Without the prior written
-------------------------
consent of the Majority Lenders (such consent not to be unreasonably withheld),
the Borrower shall not modify the Capital Budget to increase the aggregate
amounts payable thereunder unless such modification is a necessary conforming
change related to an amendment to a System Contract permitted by Section 6.07 or
------------
Section 6.08 or is concurrent and consistent with any additional sources of
------------
funds which are to be made available to the Borrower and not theretofore
contemplated in the Capital Budget (including amounts available in the
Construction
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Contingency Reserve Account, liquidated damages being applied to Obligations
hereunder and proceeds of insurance applied in accordance with terms of this
Agreement); provided that the foregoing shall not prevent the Borrower from
--------
applying identified cost savings in a budget category (as confirmed by the
Independent Engineer or the Designated Agents, as applicable) to cost overruns
in another budget category (as confirmed by the Independent Engineer or the
Designated Agents, as applicable) without increasing the aggregate amounts
payable under the Capital Budget (provided that the prior written consent of the
Administrative Agent shall be required with respect to the application of any
identified cost savings in excess of $2,000,000).
SECTION 6.22. Payment of Construction Costs. Prior to the Commercial
-----------------------------
Operation Date, the Borrower shall not pay any amount (other than with respect
to amounts received from the sources described in Section 6.09(a) or from
---------------
amounts available in the Construction Contingency Reserve Account or under the
Working Capital Loan Commitment or from Special Payments) in respect of the
construction and installation of the System other than those costs set forth or
provided for in the Capital Budget, as the same may be amended in accordance
with Section 6.21, and costs that the Contractor or the Operator is
------------
contractually obligated to pay under any System Contract if it results in a
dollar for dollar reduction in amounts payable by the Borrower or any of the
Subsidiaries under such System Contract.
SECTION 6.23. Sales of Capacity. The Borrower shall not, and shall not
-----------------
permit the Subsidiaries to, sell or otherwise dispose of Capacity or capacity on
other telecommunication systems acquired in accordance with the terms hereof
except (a) pursuant to Capacity Sale Agreements and Capacity Swap Agreements,
(b) pursuant to other agreements or arrangements which are on commercially
reasonable terms and reasonable satisfactory to the Designated Agents (which
shall include the disposition of System Capacity without cash compensation in
exchange for mutual restoration agreements or for reasonably equivalently valued
capacity on other subsea fiber or terrestrial fiber telecommunication systems,
subject to the proviso contained in this Section) and (c) with respect to
Backhaul Capacity or capacity on other subsea fiber or terrestrial fiber
telecommunication systems acquired in accordance with the terms hereof, pursuant
to agreements or arrangements in exchange for reasonably equivalent value and
which are on commercially reasonable terms and reasonably satisfactory to the
Designated Agents (which may include dispositions for non-cash consideration);
provided that, in any event, (i) all such agreements and arrangements described
--------
in the foregoing clauses (a), (b) and (c) shall provide that amounts payable to
----------- --- ---
the Borrower or any Subsidiary shall be paid to the Revenue Account (unless the
Designated Agents otherwise agree), (ii) no agreement providing for future
payments shall prohibit the granting of a security interest in such agreement by
the Borrower to the Secured Parties and (iii) without derogation of the
provisions of Section 6.24 and except for the non-cash exchanges expressly
------------
contemplated above, such agreements shall provide that payments thereunder shall
be in cash.
SECTION 6.24. Financial Covenants. (a) Minimum Cumulative Capacity
------------------- ---------------------------
Revenue. The Borrower shall not permit the cumulative Capacity Revenue (which
-------
has been deposited in the Revenue Account) as of the last day of any fiscal
quarter occurring during any period set forth below to be less than the amount
set forth opposite such period:
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Minimum Cumulative
Period Capacity Revenue
------ ----------------
06/30/01 $ 33,900,000
09/30/01 $ 74,800,000
12/31/01 $ 151,900,000
01/01/02 - 12/31/02 $ 356,700,000
01/01/03 - 12/31/03 $ 649,800,000
01/01/04 - 12/31/04 $ 960,900,000
01/01/05 - 12/31/05 $1,267,100,000
(b) Minimum Debt Service Coverage Ratio. The Borrower shall not permit
-----------------------------------
the Debt Service Coverage Ratio as of the last day of any fiscal quarter
occurring during any period set forth below to be less than the ratio set forth
opposite such period:
Debt Service
Period Coverage Ratio
------ --------------
09/30/01 1.05:1
12/31/01 1.50:1
01/01/02 - 12/31/02 2.50:1
01/01/03 - 12/31/03 3.00:1
01/01/04 - 12/31/04 3.50:1
01/01/05 - 12/31/05 4.00:1
(c) Minimum Remaining Asset Value to Borrower Debt Ratio. The Borrower
----------------------------------------------------
shall not permit the Remaining Asset Value to Borrower Debt Ratio at any time
after the Commercial Operation Date to be less than 1.25:1.
Notwithstanding anything to the contrary contained in this Agreement, the
failure to comply with clause (b) or (c) of this Section 6.24 at any time shall
---------- --- ------------
not constitute an Event of Default, but shall result in Excess Cash Flow being
applied 100% to the Lenders in accordance with Section 8.08(d) until such time
---------------
as the Borrower shall have delivered a certificate to the Administrative Agent
in accordance with Section 5.02(c) demonstrating the Borrower's compliance with
---------------
this Section 6.24.
------------
SECTION 6.25. Amendments, etc. of Organizational and Other Documents. The
------------------------------------------------------
Borrower shall not, and shall not permit the Subsidiaries to, amend, supplement
or otherwise modify, or permit the amendment, modification or supplementation
of, (a) the memorandum of association or bye-laws (or such other organizational
and governing 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 Loan Document or System Contract or could materially adversely
affect the Lenders or any Collateral or (b) if issued in accordance with and
subject to the terms of this Agreement, any documents evidencing or relating to
Permitted Subordinated
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Debt which could adversely affect the Lenders or result in provisions that are
more onerous on the Borrower.
SECTION 6.26. Management and Advisory Fees, etc. The Borrower shall not,
---------------------------------
and shall not permit any of the Subsidiaries to, pay any management, advisory,
consulting or other similar fees to any Affiliate of the Borrower other than
those set forth in the Capital Budget.
SECTION 6.27. Immunity. Neither the Borrower nor any of the Subsidiaries
--------
shall, in any proceeding in the United States, Bermuda, Venezuela, Brazil or
elsewhere, in connection with any Loan Document, claim for itself, any of its
assets or the System, immunity from suit, execution, attachment or other legal
process.
ARTICLE VII
EVENTS OF DEFAULT
-----------------
Each of the following events or occurrences described in this Article VII
-----------
shall constitute an "Event of Default".
SECTION 7.01. Non-Payment of Obligations. The Borrower shall fail to pay
--------------------------
any principal of any Loan when and as the same shall become due and payable; or
the Borrower shall fail to pay any interest on any Loan or any fee payable under
this Agreement or any other Loan Document when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of three
days; or the Borrower or any Subsidiary shall fail to pay any other amount
payable under this Agreement or any other Loan Document when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three days following the Borrower's receipt of written notice thereof
from the Administrative Agent.
SECTION 7.02. Breach of Warranty. Any representation or warranty made or
------------------
deemed made by the Borrower or any other Obligor in this Agreement, in any other
Loan Document or in any Material System Contract to which it is a party or in
any certificate delivered by the Borrower or any other Obligor pursuant to this
Agreement, any other Loan Document or any Material System Contract shall prove
to have been false or misleading in any material respect as of the time made or
deemed made and, if such misrepresentation is capable of being corrected as of a
subsequent date, such misrepresentation shall not have been corrected as of a
day within thirty calendar days following written notice thereof being given by
the Administrative Agent to the Borrower or such Loan Party; provided that if
--------
such misrepresentation is made by such other Obligor in a Material System
Contract, it shall not constitute an Event of Default hereunder unless such
misrepresentation has had or could reasonably be expected to have a Material
Adverse Effect.
SECTION 7.03. Non-Performance of Certain Covenants and Obligations. (a)
----------------------------------------------------
The Borrower shall fail to observe or perform any covenant or agreement
contained in Article VI of
----------
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this Agreement (other than clauses (b) and (c) of Section 6.24); (b) the
----------- --- ------------
Borrower or any Loan Party shall fail to perform any of its covenants or
agreements contained in Article IV of any Security Document or in the Subsidiary
Guaranty; or (c) the Borrower or any other Loan Party shall fail to observe or
perform any covenant or agreement contained in this Agreement or any other Loan
Document to which it is a party (other than those specified in Sections 7.01 and
-------------
7.02 above, in clauses (a) and (b) of this Section 7.03 and in clause (a) of
---- ----------- --- ------------ ----------
Section 6.24), and such failure shall continue unremedied or unwaived for a
------------
period of thirty days; provided that with respect to this clause (c) if (i) such
-------- ----------
failure cannot be cured within such thirty-day period despite the Borrower's or
such Loan Party's best efforts to do so, (ii) such failure is susceptible of
cure, (iii) the Borrower or such other Loan Party is continuously proceeding
with diligence and in good faith to cure such failure and (iv) the existence of
such failure has not had and could not reasonably be expected to have a Material
Adverse Effect, then, with the consent of the Administrative Agent, such thirty-
day cure period shall be extended to such date, not to exceed a total ninety-day
cure period, as shall be necessary for the Borrower or such other Loan Party to
cure such failure.
SECTION 7.04. Involuntary Bankruptcy Proceeding, etc. An involuntary
--------------------------------------
proceeding shall be commenced or an involuntary petition shall be filed seeking
(a) liquidation, reorganization or other relief in respect of the Borrower or
any other Obligor or its debts, or of a substantial part of its assets, under
any Federal, state or foreign bankruptcy, insolvency, receivership or similar
law now or hereafter in effect or (b) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Borrower or any
other Obligor or for a substantial part of its assets, and, in any such case,
such proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered; provided
--------
that, with respect to the Contractor, such proceeding shall not constitute an
Event of Default hereunder if such proceeding occurs on or after the Commercial
Operation Date, so long as such proceeding could not reasonably be expected to
have a Material Adverse Effect.
SECTION 7.05. Voluntary Bankruptcy Proceeding, etc. The Borrower or any
------------------------------------
other Obligor shall (a) voluntarily commence any proceeding or file any petition
seeking liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (b) consent to the institution of any proceeding or petition described
in Section 7.04, (c) apply for or consent to the appointment of a receiver,
------------
trustee, custodian, sequestrator, conservator or similar official for the
Borrower or any other Obligor or for a substantial part of its assets, (d) file
an answer admitting the material allegations of a petition filed against it in
any such proceeding, (e) make a general assignment for the benefit of creditors
or (f) take any action for the purpose of effecting any of the foregoing;
provided that, with respect to the Contractor, any such event shall not
--------
constitute an Event of Default hereunder if such event occurs on or after the
Commercial Operation Date, so long as such event could not reasonably be
expected to have a Material Adverse Effect.
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SECTION 7.06. Judgments. One or more final judgments (a) for the payment
---------
of money in an aggregate amount (not paid or covered by insurance) in excess of
$5,000,000 shall be rendered against the Borrower or any other Loan Party and
the same shall not have been vacated, discharged, stayed or bonded pending
appeal within 45 days from the entry thereof or (b) shall be entered in the form
of an injunction or similar form of relief requiring suspension or abandonment
of the construction, installation or operation of the System and such injunction
or similar relief shall not have been stayed, discharged or vacated within 60
days.
SECTION 7.07. ERISA. An ERISA Event shall have occurred that, in the
-----
opinion of the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to have a Material Adverse
Effect.
SECTION 7.08. Impairment of Security, etc. (a) Any Loan Document shall
---------------------------
cease to be in full force and effect or the Borrower or any other Loan Party
shall so assert in writing; (b) the Lien as to any material portion of the
Collateral created by any Security Document shall cease to be enforceable or, in
the case of Perfectible Collateral, of the same effect and priority purported to
be created thereby, or (c) the Supply Contract Guaranty shall cease to be in
full force and effect (except as a result of the express provisions thereof) or
the Supply Contract Guarantor shall so assert in writing.
SECTION 7.09. Commercial Operation. The Commercial Operation Date shall
--------------------
not have occurred by the Guaranteed Completion Date.
SECTION 7.10. Impairment of System Contract. Any Material System Contract
-----------------------------
shall cease to be valid and binding and in full force and effect, other than as
contemplated by the terms of Section 6.07; provided that, with respect to any
------------ --------
such Material System Contract (other than the Supply Contract Guaranty), it
shall not constitute an Event of Default under this Section so long as such
event is cured by the Borrower by replacing such Material System Contract with
the consent of the Required Lenders (such consent not to be unreasonably
withheld or delayed) within 60 days of such event.
SECTION 7.11. Default Under System Contract. (a) Any party to any System
-----------------------------
Contract (other than a Capacity Sales Agreement, a Capacity Swap Agreement and
the Supply Contract) shall be in material default thereunder and, other than
with respect to the Supply Contract Guaranty, such default shall continue
unremedied for 30 consecutive days (60 consecutive days where the defaulting
party is undertaking to use reasonable efforts to cure the default) and such
default could reasonably be expected to have a Material Adverse Effect, unless
any such System Contract has been replaced with the consent of the Required
Lenders (such consent not to be unreasonably withheld or delayed) within 60 days
of such default, or (b) prior to System Final Completion, an "Event of Default"
(as defined in the Supply Contract) shall have occurred and be continuing under
the Supply Contract, unless the Supply Contract has been replaced with the prior
written consent of the Required Lenders (such consent not to be unreasonably
withheld or delayed) within 60 days of such event or the Supply Contract
Guarantor is diligently performing its obligations under the Supply Contract
Guaranty and has cured such "Event of Default" within
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such 60-day period, it being understood that a failure of the Contractor to
achieve the Commercial Operation Date by the Scheduled RFS Date shall not
constitute an Event of Default under this Section so long as it achieves the
Commercial Operation Date by the Guaranteed Completion Date.
SECTION 7.12. Liquidated Damages. The Contractor shall fail to pay when
------------------
due (after any permitted grace periods) any amounts owing as liquidated damages
under Article 22 of the Supply Contract (unless the Supply Contract Guarantor is
duly performing under the Supply Contract Guaranty).
SECTION 7.13. Revocation of Landing License, etc. Any Landing License or
----------------------------------
other Governmental Action which shall at the time be necessary for the
performance of any material System Activity in a manner contemplated under the
Loan Documents and the System Contracts shall be revoked or shall otherwise
terminate (or shall be amended or modified in a materially adverse manner) and
such revocation or termination (or such amendment or modification thereof) could
reasonably be expected to have a Material Adverse Effect, unless such Landing
License or Governmental Action is replaceable and is replaced with the prior
written consent of the Required Lenders (such consent not to be unreasonably
withheld or delayed) with an alternative Landing License or Governmental Action
permitting the performance of such System Activity within 60 days of the
occurrence of such event.
SECTION 7.14. Change in Control. A Change in Control shall occur.
-----------------
SECTION 7.15. Default on Other Indebtedness. The Borrower or any other
-----------------------------
Loan Party shall (a) default in any payment of principal of or interest on any
Indebtedness (other than Indebtedness under the Loan Documents) or in the
payment of any obligations under Hedging Agreements, in any case in an aggregate
amount in excess of $5,000,000 beyond the period of grace, if any, provided in
the instrument or agreement under which such Indebtedness was created, or (b)
default in the performance of any other agreement relating to any Indebtedness
(other than Indebtedness under the Loan Documents) or contained in any
instrument or agreement evidencing, securing or relating thereto, in each case
beyond the period of grace, if any, provided therein, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or permit the holders of such Indebtedness to cause, such
Indebtedness to become due prior to its stated maturity.
SECTION 7.16. Delay in Construction or Installation. The construction
-------------------------------------
or installation of the System shall be suspended under Article 15 of the Supply
Contract for more than 60 consecutive days or 90 days in the aggregate or the
System (or any Segment thereof) shall be abandoned by the Borrower.
SECTION 7.17. Term C Loan Guarantor. The Term C Loan Guarantor shall,
---------------------
at any time during any Term C Loan Guaranteed Period, (a) have a long-term
senior unsecured debt rating of less than BBB- from Standard & Poor's Rating
Services or Baa3 from ▇▇▇▇▇'▇ Investors Services, Inc. or (b) fail to observe or
perform any covenant or agreement contained in
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the Term C Loan Guaranty, and such failure shall continue unremedied for a
period of thirty days.
If any Event of Default described in Sections 7.04 or 7.05 shall occur with
------------- ----
respect to the Borrower or any Subsidiary, the Commitments shall automatically
terminate and the principal of the Loans then outstanding, together with accrued
interest thereon and all fees and other Obligations of the Borrower accrued
hereunder, and an amount equal to 100% of all LC Exposure, shall automatically
become immediately due and payable, without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the Borrower.
If any Event of Default (other than any Event of Default described in
Section 7.04 or 7.05) shall occur for any reason, whether voluntary or
------------ ----
involuntary, and be continuing, the Administrative Agent may, and at the request
or with the consent of the Majority Lenders shall, by notice to the Borrower,
take any or all of the following actions, at the same or different times: (a)
terminate the Commitments, and thereupon the Commitments shall terminate
immediately, (b) declare the Loans then outstanding to be due and payable in
whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other Obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower, (c) demand that the Borrower immediately pay to the Administrative
Agent an amount equal to 100% of the LC Exposure whereupon the Borrower shall
immediately make such payment to the Administrative Agent which shall hold such
amount in a cash collateral account to secure the LC Exposure, and (iv) exercise
such other rights or remedies as the Lenders may have under the Loan Documents
or applicable law.
ARTICLE VIII
ACCOUNTS
--------
SECTION 8.01. Creation of Accounts. (a) The Administrative Agent hereby
--------------------
establishes the following thirteen special, segregated and irrevocable cash
collateral accounts in the name of the Borrower and for the benefit of the
Lenders, which accounts shall be maintained by the Administrative Agent at all
times until the termination of this Agreement and the payment in full of all
Obligations:
(1) Construction Account;
(2) Revenue Account;
(3) Special Payment Account;
(4) Debt Reserve Account;
(5) Parent Interest Reserve Account;
(6) Operating Reserve Account;
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(7) Insurance Proceeds Account;
(8) Clean-Up Account;
(9) Sales and Issuances Proceeds Account;
(10) Construction Contingency Reserve Account;
(11) Current Account;
(12) Backhaul Reserve Account; and
(13) System Upgrade Reserve Account.
(b) The Administrative Agent hereby establishes special, segregated and
irrevocable cash collateral accounts, each in the name of the applicable
Subsidiary and for the benefit of the Lenders, which accounts shall be
maintained by the Administrative Agent at all times until the termination of
this Agreement and the payment in full of all Obligations.
(c) The Administrative Agent hereby establishes a special segregated
account in the name of the Borrower entitled "Borrower Net Equity Proceeds
Account" for the deposit of the Net Equity Proceeds and the Parent Senior Note
Proceeds (in each case net of the fees and expenses set forth in the Capital
Budget), which account shall be maintained by the Administrative Agent at all
times until the amounts on deposit therein have been spent or applied in
accordance with the terms hereof.
(d) 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. All moneys, investments and securities at any time on
------------
deposit in the Borrower Equity Proceeds Account or in any Checking Account shall
not constitute Collateral.
SECTION 8.02. Required Deposits into the Accounts.
-----------------------------------
(a) Construction Account. (i) Each Lender shall, subject to Sections
-------------------- --------
8.02(b) and 8.02(i), fund each Loan made by it hereunder directly to the
------- -------
Administrative Agent for deposit in the Construction Account.
(ii) On each date on which the Borrower receives Equity Contributions
from Parent (excluding Equity Contributions which do not constitute Net Cash
Proceeds) prior to the payment of all Capital Costs, the Borrower shall, subject
to the provisions of Section 8.02(j), deposit such Equity Contributions in the
---------------
Construction Account.
(iii) On any date after the Closing Date and prior to the Commercial
Operation Date on which the Borrower receives payment under any Hedging
Agreement, the Borrower shall deposit such payment into the Construction
Account.
(b) Dispute Account. Subject to the satisfaction or waiver by the
---------------
Majority Lenders of the applicable conditions precedent set forth herein, each
Lender shall fund the disputed portion
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of any Loan made by it hereunder directly to the Payment Escrow Agent for
deposit into the Dispute Account in accordance with the terms of the Supply
Contract and of the Payment Escrow Agreement. The disputed portion of any Loan
shall be that amount indicated by the Borrower or the Independent Engineer as
being in dispute in the certificate attached to the monthly Construction
Progress Certificate delivered in connection with such Loan.
(c) Revenue Account. Subject to Section 8.02(j), the Borrower and the
--------------- ---------------
Subsidiaries shall deposit all Revenue received in cash in the Revenue Account;
provided that with respect to Revenue received by any Subsidiary in a country in
--------
which applicable laws therein restrict the transfer of such Revenue to the
Revenue Account, such Revenue shall be held and applied on terms reasonably
satisfactory to the Designated Agents.
(d) Special Payment Account. The Borrower and the Subsidiaries shall
-----------------------
deposit all Special Payments in the Special Payment Account.
(e) Debt Reserve Account. The Administrative Agent shall transfer amounts
--------------------
on deposit in the Revenue Account to the Debt Reserve Account in accordance with
Sections 8.08(a) and 8.08(d).
---------------- -------
(f) Parent Interest Reserve Account. The Administrative Agent shall
-------------------------------
transfer amounts on deposit in the Revenue Account to the Parent Interest
Reserve Account in accordance with Sections 8.08(a) and 8.08(d).
---------------- -------
(g) Operating Reserve Account. The Administrative Agent shall transfer
-------------------------
amounts on deposit in the Revenue Account to the Operating Reserve Account in
accordance with Sections 8.08(a) and 8.08(d).
---------------- -------
(h) Insurance Proceeds Account. The Borrower, the Subsidiaries and the
--------------------------
Administrative Agent shall deposit all Casualty Proceeds in the Insurance
Proceeds Account.
(i) Clean-Up Account. Subject to the satisfaction or waiver by the
----------------
Majority Lenders of the applicable conditions precedent set forth herein, each
Lender shall fund the Loan made by it hereunder on the last day of the
Availability Period in respect of Capital Costs which are not yet due directly
to the Administrative Agent for deposit in the Clean-Up Account.
(j) Sales and Issuances Proceeds Account. The Borrower and the
------------------------------------
Subsidiaries shall deposit all Net Cash Proceeds in the Sales and Issuances
Proceeds Account.
(k) Construction Contingency Reserve Account. The Administrative Agent
----------------------------------------
shall transfer amounts on deposit in the Revenue Account to the Construction
Contingency Reserve Account in accordance with Section 8.08(a).
---------------
(l) Current Account. The Administrative Agent shall transfer amounts on
---------------
deposit in the Revenue Account to the Current Account in accordance with Section
-------
8.08(b).
-------
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(m) Backhaul Reserve Account. The Administrative Agent shall transfer
------------------------
amounts on deposit in the Revenue Account to the Backhaul Reserve Account in
accordance with Sections 8.08(a) and 8.08(d).
---------------- -------
(n) System Upgrade Reserve Account. The Administrative Agent shall
------------------------------
transfer amounts on deposit in the Revenue Account to the System Upgrade Reserve
Account in accordance with Section 8.08(d).
---------------
(o) Subsidiary Accounts. The Administrative Agent shall deposit all
-------------------
capital contributions or loans, as the case may be, from the Borrower to any
Subsidiary directly in the applicable Subsidiary Account from amounts on deposit
in the Construction Account. The Administrative Agent will transfer all
payments by the Borrower to any Subsidiary under any Intercompany Agreement
directly to the applicable Subsidiary Account from amounts on deposit in the
Revenue Account in accordance with Sections 8.07(b), 8.08(a), 8.08(b), 8.12(a)
---------------- ------- ------- -------
and 8.16(a).
-------
(p) Borrower Equity Proceeds Account. On the Closing Date, the Borrower
--------------------------------
shall deposit the Equity Contributions made by Parent to the Borrower on the
Closing Date in the Borrower Equity Proceeds Account; provided that the Borrower
--------
may deposit up to $1,000,000 of such Equity Contributions in one or more
Checking Accounts designated by the Borrower.
SECTION 8.03. Deposits Held as Cash Collateral and Deposits in the
----------------------------------------------------
Borrower Equity Proceeds Account. The Administrative Agent agrees to accept all
--------------------------------
revenue, cash, payments, insurance and casualty proceeds, other amounts and
Permitted Investments to be delivered to or held by the Administrative Agent
pursuant to the terms of this Agreement. The Administrative Agent shall hold
and safeguard the Accounts and the Borrower Equity Proceeds Account (and, in
each case, the revenues, cash, payments, insurance and casualty proceeds,
instruments, securities and other amounts on deposit therein) during the term of
this Agreement 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 Borrower (or
the applicable Subsidiary, in the case of the Subsidiary Accounts) to the
Administrative Agent as collateral securing the Obligations in accordance with
the provisions of this Agreement and the Security Documents.
SECTION 8.04. Source of Payments; Deposits Irrevocable. (a) 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 hold such amounts in the Revenue
Account (and such amounts shall not be applied in accordance with Section 8.08)
------------
until its proper application is identified.
(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.
------------
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SECTION 8.05. Books of Account; Statements. (a) 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 8.26, and
------------
any such recordation shall constitute prima facie evidence of the information
----- -----
recorded.
(b) Not later than the tenth Business Day of each month, commencing with
the first month to occur after the earlier of (i) the date the Primary Ring
becomes operational and (ii) the receipt of Net Cash Proceeds or Casualty
Proceeds, the Administrative Agent shall deliver to the Borrower a statement
setting forth the transactions in each Account during the preceding month and
specifying the Revenue, Net Cash Proceeds, Special Payments, Casualty Proceeds,
cash equivalents and other amounts held in each Account at the close of business
on the last Business Day of the preceding month; provided that the
--------
Administrative Agent shall promptly respond (during normal business hours) to
requests by the Borrower concerning information regarding deposits, investments
and transfers in and among the Accounts.
SECTION 8.06. Location of the Accounts. The Accounts shall be
------------------------
maintained by the Administrative Agent at its office located at ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, until the Administrative Agent gives written
notice to the other parties to this Agreement setting forth a different location
of the Accounts, in the manner specified in Section 10.01; provided that such
------------- --------
location shall be in Houston, Texas.
SECTION 8.07. Construction Account. (a) On each Borrowing Date, the
--------------------
Administrative Agent shall distribute, from amounts on deposit in the
Construction Account, directly to each Person to which an amount in excess of
$200,000 is due and payable (and otherwise to the Checking Accounts designated
by the Borrower for the benefit of the Persons entitled thereto), the amounts
identified as Capital Costs then due and payable in the Borrowing Request
delivered in connection with such Borrowing Date.
(b) If, prior to the Commercial Operation Date and after all amounts on
deposit in the Borrower Equity Proceeds Account have been spent in accordance
with the terms hereof, the amounts due and owing to any Subsidiary under any
Intercompany Agreement exceed the amounts distributed to such Subsidiary
pursuant to clause first of Section 8.08(a), and no amounts remain on deposit in
------------ ---------------
the Operating Reserve Account and the Construction Contingency Reserve Account,
the Administrative Agent shall distribute to such Subsidiary, from amounts on
deposit in the Construction Account, the remaining amounts due and owing to such
Subsidiary under any Intercompany Agreement.
(c) If, prior to the Commercial Operation Date and after all amounts on
deposit in the Borrower Equity Proceeds Account have been spent in accordance
with the terms hereof, OA&M Expenses, SG&A Expenses and Term C Loan Guaranty
Fees of the Borrower due and payable exceed the amounts distributed in respect
thereof pursuant to clause first of Section 8.08(a), and no amounts remain on
------------ ---------------
deposit in the Operating Reserve Account and the Construction Contingency
Reserve Account, the Administrative Agent shall distribute to the
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Person entitled thereto, from amounts on deposit in the Construction Account, an
amount equal to such OA&M Expenses, SG&A Expenses and Term C Loan Guaranty Fees
of the Borrower remaining unpaid; provided that amounts distributed in respect
--------
of OA&M Expenses and SG&A Expenses pursuant to this paragraph (b), Section
------------- -------
8.12(b), Section 8.16(b), Section 8.22(a) and clause first of Section 8.08(a)
------- --------------- ---------------
shall not in the aggregate exceed (x) $7,500,000 in any calendar quarter or (y)
the amounts allocated therefor in the then current Operating Budget.
(d) If, prior to the Commercial Operation Date and after all amounts on
deposit in the Borrower Equity Proceeds Account have been spent in accordance
with the terms hereof, insufficient Revenue has been received for application
thereto pursuant to clause tenth of Section 8.08(a), the Administrative Agent
------------ ---------------
shall, upon receipt by it of a certificate of the Borrower (which shall be
delivered no more frequently than once a month), distribute, from amounts on
deposit in the Construction Account, to one or more Checking Accounts designated
by the Borrower; provided that the aggregate amount distributed to such Checking
--------
Accounts pursuant to this paragraph (d), Section 8.08(a) and Section 8.08(d)
------------- --------------- ---------------
shall not in exceed $1,000,000 in any calendar year.
SECTION 8.08. Revenue Account.
---------------
(a) Transfers Prior to the Commercial Operation Date. The Administrative
------------------------------------------------
Agent shall, upon receipt by it of a certificate of the Borrower prior to the
Commercial Operation Date (which shall be delivered no more frequently than once
a month), and in any event on the Commercial Operation Date, distribute, from
amounts on deposit in the Revenue Account, the following amounts in the
following order of priority:
first, (i) to the Borrower (or such other Person as may be entitled
-----
thereto), all OA&M Expenses and SG&A Expenses of the Borrower then due and
payable, (ii) to each Subsidiary's Subsidiary Account, all OA&M Expenses
and SG&A Expenses of such Subsidiary then due and payable, (iii) to the
Term C Loan Guarantor, all Term C Loan Guaranty Fees then due and payable
and (iv) to Parent, all Parent Expenses then due and payable; provided that
--------
(A) amounts distributed to pay OA&M Expenses and SG&A Expenses of the
Borrower and the Subsidiaries shall not exceed $7,500,000 in the aggregate
in any fiscal quarter, and (B) amounts distributed to Parent to pay Parent
Expenses shall not exceed $300,000 in the aggregate (which amount may be
increased with the consent of the Designated Agents to the extent such
increase is necessary to pay Parent Expenses) in any calendar year;
second, to the Administrative Agent, for the account of the Lenders,
------
the amount of all fees payable pursuant to the terms of the Loan Documents,
which the Administrative Agent certifies to the Borrower to be due and
payable on such date;
third, to the Administrative Agent, for the account of the Lenders,
-----
the amount, if any, equal to the interest on the Loans and under Hedging
Agreements which the Administrative Agent certifies to the Borrower to be
due and payable under the Loan
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Documents on such date;
fourth, so long as no Blockage Event has occurred and is continuing,
------
to Parent, an amount equal to the interest due and payable on the Parent
Senior Notes or on any Parent Additional Notes on the next succeeding
January 15 or July 15 (or other applicable interest payment date), as the
case may be, as certified by the Borrower to the Administrative Agent,
together with any such interest distributable pursuant to this clause
------
fourth which was blocked for any prior period and has not otherwise been
------
paid pursuant to this clause fourth or from amounts on deposit in the
-------------
Parent Interest Reserve Account;
fifth, until such time as $15,000,000 in the aggregate shall have been
-----
deposited therein pursuant to this clause fifth on or prior to the
------------
Commercial Operation Date, to the Construction Contingency Reserve Account,
to be applied in accordance with Section 8.16;
------------
sixth, until such time as $34,000,000 (provided that such amount shall
----- --------
be increased to $48,000,000 from and after the date that is six months
prior to the Initial Principal Payment Date) in the aggregate shall have
been deposited therein pursuant to this clause sixth on or prior to the
------------
Commercial Operation Date, to the Debt Reserve Account, to be applied in
accordance with Section 8.10;
------------
seventh, until such time as $19,500,000 in the aggregate shall have
-------
been deposited therein pursuant to this clause seventh on or prior to the
--------------
Commercial Operation Date, to the Parent Interest Reserve Account, to be
applied in accordance with Section 8.11;
------------
eighth, until such time as $5,000,000 in the aggregate shall have been
------
deposited therein pursuant to this clause eighth on or prior to the
-------------
Commercial Operation Date, to the Operating Reserve Account, to be applied
in accordance with Section 8.12;
------------
ninth, to the Backhaul Reserve Account to be applied in accordance
-----
with Section 8.19, at the Borrower's option, up to an amount equal to 70%
------------
of Backhaul Service Revenue received since the last certificate received by
the Administrative Agent under this Section 8.08(a);
---------------
tenth, at the Borrower's option, to one or more Checking Accounts;
-----
provided that the aggregate amount distributed to such Checking Accounts
--------
pursuant to this clause tenth, Section 8.07(d) and Section 8.08(d) shall
------------ --------------- ---------------
not in exceed $1,000,000 in any calendar year;
eleventh, to the Administrative Agent, for the account of the Lenders,
--------
up to an amount sufficient to pay all Loans in full, together with accrued
interest thereon and all other amounts payable under this Agreement and the
other Loan Documents; and
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twelfth, thereafter, to the Borrower, to be applied to such purposes
-------
(including the making of equity dividends) as the Borrower may direct.
(b) Monthly Payment of OA&M Expenses, SG&A Expenses and Intercompany
----------------------------------------------------------------
Payments After the Commercial Operation Date. (i) On or before the twentieth
--------------------------------------------
day of each month occurring after the Commercial Operation Date (or if such day
is not a Business Day, the immediately preceding Business Day), the Borrower
shall deliver to the Administrative Agent an Expense Certificate requesting
distributions to be made from the Revenue Account to pay OA&M Expenses and SG&A
Expenses. The approval of the Designated Agents shall be required for the
payment of OA&M Expenses and SG&A Expenses which would cause an Operating Budget
Deviation and the approval of the Majority Lenders shall be required if such
payment would cause a Material Operating Budget Deviation. On the twenty-fifth
day of each month (or if such date is not a Business Day, the immediately
succeeding Business Day) (each such date, a "Monthly Expense Transfer Date"),
-----------------------------
the Administrative Agent shall distribute, from amounts on deposit in the
Revenue Account, (A) directly to each Person (other than the Borrower or a
Subsidiary) to which an amount in excess of $200,000 is due and payable, the
amounts identified as OA&M Expenses and SG&A Expenses of the Borrower then due
and owing in Item 1 of the Expense Certificate referred to above, (B) to the
Checking Accounts designated by the Borrower for the benefit of the Persons
entitled thereto, all other OA&M Expenses and SG&A Expenses of the Borrower then
due and owing in Item 1 of such Expense Certificate and (C) to the Current
Account, the amounts identified as OA&M Expenses and SG&A Expenses of the
Borrower expected to be due and owing prior to the next Monthly Expense Transfer
Date in Item 2 of such Expense Certificate; provided that amounts distributed to
--------
pay OA&M Expenses and SG&A Expenses of the Borrower and the Subsidiaries shall
not exceed $10,500,000 in the aggregate in any fiscal quarter occurring after
the Commercial Operation Date. In addition, the Administrative Agent shall
distribute directly to each Subsidiary Account, from amounts on deposit in the
Revenue Account, the amounts due and owing by the Borrower to the applicable
Subsidiary under any Intercompany Agreement as set forth in Item 3 of the
Expense Certificate and the amounts identified as OA&M Expenses and SG&A
Expenses of the applicable Subsidiary identified in Items 1 and 2 of the Expense
Certificate.
(ii) If any portion of the Contract Price is due and owing and remains
unpaid (and such unpaid portion is not required pursuant to the terms of this
Agreement to be paid from another specified source, unless amounts are not
actually available from such other source), the Borrower shall be permitted to
deliver a certificate to the Administrative Agent setting forth such unpaid
amounts and the Administrative Agent shall promptly distribute, from amounts on
deposit in the Revenue Account, the portion of the Contract Price remaining
unpaid.
(c) Additional Monthly Transfers After the Commercial Operation Date. On
----------------------------------------------------------------
the last Business Day of each calendar month occurring after the Commercial
Operation Date, the Administrative Agent shall distribute, from amounts on
deposit in the Revenue Account (after making any distributions required by
Section 8.08(b)), the following amounts in the following order of priority:
---------------
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first, to the Term C Loan Guarantor, the amount of all Term C Loan
-----
Guaranty Fees due and payable on such date;
second, to the Administrative Agent, for the account of the Lenders,
------
the amount of all fees payable pursuant to the terms of the Loan Documents,
which the Administrative Agent certifies to the Borrower to be due and
payable on such date;
third, to the Administrative Agent, for the account of the Lenders,
-----
the amount, if any, equal to the interest on the Loans and under Hedging
Agreements which the Administrative Agent certifies to the Borrower to be
due and payable under the Loan Documents on such date;
fourth, if such date is a Principal Payment Date, to the
------
Administrative Agent, for the account of the Lenders, the amount, if any,
equal to the principal (excluding any mandatory prepayments thereof) which
the Administrative Agent certifies to the Borrower to be due and payable on
such date;
fifth, to TBI and GCL, as applicable, an amount equal to the amount of
-----
payments due and payable for capital expenditures to be made by TBI and GCL
in the next month and included in the Capital Budget, as set forth in a
certificate of the Borrower delivered to the Administrative Agent (provided
--------
that with respect to GCL, capital expenditures in any calendar year shall
not exceed an amount equal to the sum of (i) $5,000,000 plus (ii) 50% of
GCL's Revenue for such calendar year); and
sixth, until such time as $300,000 in the aggregate (which amount may
-----
be increased with the consent of the Designated Agents to the extent such
increase is necessary to pay Parent Expenses) shall have been distributed
pursuant to this clause fifth in any calendar year, to Parent, an amount
------------
equal to all Parent Expenses then due and payable.
(d) Semi-Annual Transfers After the Commercial Operation Date. On each
---------------------------------------------------------
Principal Payment Date, the Administrative Agent shall distribute, from amounts
on deposit in the Revenue Account (after making any distributions required by
Sections 8.08(b) and 8.08(c)), the following amounts in the following order of
---------------- -------
priority:
first, to the Debt Reserve Account, an amount sufficient to cause the
-----
amounts on deposit therein to equal the Debt Reserve Amount (as set forth
in the most recent certificate of the Borrower delivered pursuant to
Section 5.02(f));
---------------
second, to the Parent Interest Reserve Account, an amount sufficient
------
to cause the amounts on deposit therein to equal the Parent Interest
Reserve Amount (as set forth in the most recent certificate of the Borrower
delivered pursuant to Section 5.02(f));
---------------
third, to the Operating Reserve Account, an amount sufficient to cause
-----
the
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amounts on deposit therein to equal the Operating Reserve Amount (as set
forth in the most recent certificate of the Borrower delivered pursuant to
Section 5.02(f));
---------------
fourth, so long as no Blockage Event has occurred and is continuing,
------
to Parent, an amount equal to the interest due and payable on the Parent
Senior Notes or on any Parent Additional Notes on the next succeeding
January 15 or July 15 (or other applicable interest payment date), as the
case may be, as certified by the Borrower to the Administrative Agent,
together with any such interest distributable pursuant to this clause
------
fourth which was blocked for any prior period and has not otherwise been
------
paid pursuant to this clause fourth or from amounts on deposit in the
-------------
Parent Interest Reserve Account;
fifth, to the Backhaul Reserve Account, to be applied in accordance
-----
with Section 8.18, at the Borrower's option, up to an amount equal to 80%
------------
of Backhaul Service Revenue received since the last distribution pursuant
to this clause fifth;
------------
sixth, to the System Upgrade Reserve Account, to be applied in
-----
accordance with Section 8.19, at the Borrower's option, up to an amount
------------
equal to $10,000,000 in the aggregate shall be distributed pursuant to this
clause sixth.
------------
seventh, at the Borrower's option, to one or more Checking Accounts;
-------
provided that the aggregate amount distributed to such Checking Accounts
--------
pursuant to this clause seventh, Section 8.07(d) and Section 8.08(a) shall
-------------- --------------- ---------------
not in exceed $1,000,000 in any calendar year.
eighth, to the Administrative Agent, for the account of the Lenders,
------
an amount equal to 50% (or, if as of such date a Default or a Designated
Event has occurred and is continuing, 100%) of the remainder of the amounts
on deposit in the Revenue Account to be applied to the prepayment of the
Loans in accordance with Section 2.11(b); and
---------------
ninth, to the Borrower (or such other Person entitled thereto), to be
-----
applied (i) first to the payment of outstanding amounts owed to the Term C
Loan Guarantor under the Term C Loan Guaranty Reimbursement Agreement and
(ii) thereafter to Permitted Activities and, subject to the consent of the
Administrative Agent (such consent not to be unreasonably withheld) other
activities, the remainder, if any, of the amounts on deposit in the Revenue
Account;
provided that if an Event of Default shall have occurred and be continuing, all
--------
amounts remaining on deposit in the Revenue Account after the payment of amounts
specified in clauses first through seventh shall be applied by the
------------- -------
Administrative Agent to the Obligations then due in such order as the Designated
Agents shall direct.
SECTION 8.09. Special Payment Account. All Special Payments deposited
-----------------------
in the Special Payment Account constituting Liquidated Damages or proceeds of
delayed opening of business insurance shall be applied by the Administrative
Agent first, to the payment of interest
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due and payable on the Loans, second, to the payment of interest on the Parent
------
Senior Notes and any Parent Additional Notes and, third, to the payment of other
-----
Capital Cost overruns resulting from the delay in the Commercial Operation Date,
in each case as and when the same shall become due and payable. All other
Special Payments shall be transferred to the Revenue Account to be applied in
accordance with Section 8.08; provided that, in the event the Supply Contract is
------------ --------
being replaced in accordance with this Agreement, such other Special Payments
shall, subject to Section 8.25, be applied by the Borrower to the costs of
------------
entering into a replacement supply agreement and to such other related costs as
shall be approved by the Administrative Agent.
SECTION 8.10. Debt Reserve Account. If, subsequent to the Commercial
--------------------
Operation Date, on any date on which the payment of principal or interest on the
Loans or fees due to the Agents or Lenders becomes due and payable, the amounts
on deposit in the Revenue Account are insufficient to make the payment
obligations set forth in clauses second, third and fourth of Section 8.08(c) on
-------------- ----- ------ ---------------
such date, the Administrative Agent shall distribute to the Lenders the amount
(to the extent amounts on deposit are available in the Debt Reserve Account)
equal to the amount of any deficiency in the payment obligations set forth in
clauses second, third and fourth of Section 8.08(c) on such date.
-------------- ----- ------ ---------------
SECTION 8.11. Parent Interest Reserve Account. If, on any Principal
-------------------------------
Payment Date (or any other date on which interest may be due and payable on the
Parent Senior Notes or any Parent Additional Notes), the amounts on deposit in
the Revenue Account are insufficient to make the payment obligations set forth
in clause fourth of Section 8.08(a) or clause fourth of Section 8.08(d) on such
------------- --------------- ------------- ---------------
Principal Payment Date or other date, the Administrative Agent shall, subject to
the provisions of Section 8.25, transfer to Parent the amount (to the extent
------------
amounts on deposit are available in the Parent Interest Reserve Account) equal
to the amount of any deficiency in the payment obligations set forth in clause
------
fourth of Section 8.08(a) or clause fourth of Section 8.08(d) on such Principal
------ --------------- ------------- ---------------
Payment Date or other date.
SECTION 8.12. Operating Reserve Account. (a) If, prior to the Commercial
-------------------------
Operation Date, the amounts due and owing to any Subsidiary under any
Intercompany Agreement exceed the amounts distributed to such Subsidiary
pursuant to clause first of Section 8.08(a), the Administrative Agent shall
------------ ---------------
distribute to such Subsidiary, from amounts on deposit in the Operating Reserve
Account, the remaining amounts due and owing to such Subsidiary under any
Intercompany Agreement.
(b) If, prior to the Commercial Operation Date, OA&M Expenses, SG&A
Expenses and Term C Loan Guaranty Fees of the Borrower due and payable exceed
the amounts distributed in respect thereof pursuant to clause first of Section
------------ -------
8.08(a), the Administrative Agent shall distribute to the Person entitled
-------
thereto, from amounts on deposit in the Operating Reserve Account, an amount
equal to such OA&M Expenses, SG&A Expenses and Term C Loan Guaranty Fees of the
Borrower remaining unpaid; provided that amounts distributed in respect of OA&M
--------
Expenses and SG&A Expenses pursuant to this paragraph (b), Section 8.22(a) and
------------- ---------------
clause first of Section 8.08(a) shall not in the aggregate exceed (x) $7,500,000
------------ ---------------
in any calendar
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quarter or (y) the amounts allocated therefor in the then current Operating
Budget.
(c) If, subsequent to the Commercial Operation Date, on any Monthly
Expense Transfer Date, the amounts on deposit in the Revenue Account are
insufficient to make the payment obligations set forth in the Expense
Certificate (or other certificate) setting forth such OA&M Expenses and SG&A
Expenses, the Administrative Agent shall distribute to the Person(s) entitled
thereto in accordance with Section 8.08(b) the amount (to the extent amounts on
---------------
deposit are available in the Operating Reserve Account) equal to the amounts of
any deficiency in the payment of the OA&M Expenses and SG&A Expenses set forth
in such certificate.
SECTION 8.13. 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 referred to as 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
Borrower as provided in paragraph (c) of this Section 8.13, paid to the
------------- ------------
Administrative Agent as provided in paragraph (d) or (e) of this Section 8.13,
------------- --- ------------
or returned to the Borrower as provided in Section 8.32.
------------
(c) Subject to the provisions of paragraphs (d) and (e) of this Section
-------------- --- -------
8.13, Casualty Proceeds Deposits shall be paid over to or upon the order of the
----
Borrower (or directly to the Persons entitled thereto in the case of amounts in
excess of $200,000) to reimburse it for, or to pay, the cost of repairing,
rebuilding or otherwise replacing the damaged, destroyed, lost or condemned
property in respect of which such moneys were received, upon the receipt by the
Administrative Agent of a certificate of the Borrower (A) 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, destroyed, lost or condemned property and (B)
stating the specific amount requested to be paid over to or upon the order of
the Borrower (or such other Person) or that such amount is requested to
reimburse the Borrower, 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 Borrower 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 (c), the Administrative
-------------
Agent shall transfer such Casualty Proceeds Deposits to the Revenue Account.
(d) If the Borrower shall at any time notify the Administrative Agent that
an Event of Loss has occurred, then, unless the System is being repaired in
accordance with Section 5.22, the Administrative Agent shall promptly apply the
------------
Casualty Proceeds Deposits in the Insurance Proceeds Account to the payment of
the Obligations in accordance with Section 2.11(d). If the System is being
---------------
repaired in accordance with Section 5.22, the provisions of paragraph (c) above
------------ -------------
shall apply.
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(e) If an Event of Default has occurred and is continuing and the Loans
have been accelerated in accordance with Article VII, then the Administrative
-----------
Agent shall promptly apply the Casualty Proceeds Deposits in the Insurance
Proceeds Account to the payment of the Obligations in such order as the
Administrative Agent may elect.
SECTION 8.14. Clean-Up Account. The Administrative Agent shall, upon
----------------
receipt by it of a certificate of the Borrower setting forth the same
information required in a Borrowing Request with respect to the Capital Costs to
be paid (together with all applicable invoices), distribute directly to each
Person to which an amount in excess of $200,000 is due and payable (and
otherwise to the Checking Accounts designated by the Borrower for the benefit of
the Persons entitled thereto), from amounts on deposit in the Clean-Up Account,
the amounts identified as Capital Costs in such certificate as then due and
payable. The Borrower shall use reasonable efforts to submit certificates under
this Section 8.14 no more than once a month.
------------
SECTION 8.15. 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 Equity Interests of the Borrower or Parent, (i) an
amount equal to the portion thereof being held in accordance with the
proviso contained in clause (i) of Section 2.11(c) for application to the
---------- ---------------
payment of Permitted Costs (which shall be specified in a certificate of
the Borrower delivered to the Administrative Agent when such Net Cash
Proceeds are deposited) shall be held and applied to the payment thereof
upon receipt of a certificate of the Borrower specifying the Person(s) to
whom such Permitted Costs are due and owing (provided that any portion
thereof which is being held for the payment of Capital Costs shall be
transferred to the Construction Account or, after the Commercial Operation
Date, the Revenue Account or, after the Availability Period, the Clean-Up
Account) and (ii) the remainder shall be applied, 50% to the prepayment of
the Loans in accordance with clause (i) of Section 2.11(c) and 50% to the
---------- ---------------
Checking Accounts designated by the Borrower to be used for Permitted
Activities;
(b) if any such amounts are Net Cash Proceeds of an incurrence of
Indebtedness by the Borrower or Parent after the Closing Date (other than
Indebtedness permitted by Section 6.01, but subject in any event to the
------------
limitations contained in Section 6.01), such Net Cash Proceeds shall be
------------
applied to the prepayment of the Loans in accordance with clause (ii) of
-----------
Section 2.11(c); and
---------------
(c) if such amounts are Net Cash Proceeds in respect of any sale,
transfer, lease or other disposition of any asset of the Borrower or any
Subsidiary, (i) an amount equal to the portion thereof being held to be
reinvested in the Borrower's or any Subsidiary's business (which shall be
specified in a certificate of the Borrower 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 of a certificate of
the Borrower specifying the Person(s) to whom such expenses are due and
owing, (ii) if any
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such Net Cash Proceeds are not expended in accordance with clause (i) above
----------
within six months of their receipt into the Sales and Issuances Proceeds
Account, such Net Cash Proceeds (net of the portion being transferred to
the Revenue Account pursuant to clause (iii) below), shall be applied to
------------
the prepayment of the Loans in accordance with clause (iii) of Section
------------ -------
2.11(c) and (iii) all such other Net Cash Proceeds which are not being held
-------
pursuant to clause (i) above or are not being applied to the prepayment of
----------
the Loans pursuant to clause (iii) of Section 2.11(c),shall be transferred
------------ ---------------
to the Revenue Account.
SECTION 8.16. Construction Contingency Reserve Account. (a) If, prior to
----------------------------------------
the Commercial Operation Date, the amounts due and owing to any Subsidiary under
any Intercompany Agreement exceed the amounts distributed to such Subsidiary
pursuant to clause first of Section 8.08(a), and no amounts remain on deposit in
------------ ---------------
the Operating Reserve Account, the Administrative Agent shall distribute to such
Subsidiary, from amounts on deposit in the Construction Contingency Reserve
Account, the remaining amounts due and owing to such Subsidiary under any
Intercompany Agreement.
(b) If, prior to the Commercial Operation Date, OA&M Expenses, SG&A
Expenses and Term C Loan Guaranty Fees of the Borrower due and payable exceed
the amounts distributed in respect thereof pursuant to clause first of Section
------------ -------
8.08(a), and no amounts remain on deposit in the Operating Reserve Account, the
-------
Administrative Agent shall distribute to the Person entitled thereto, from
amounts on deposit in the Construction Contingency Reserve Account, an amount
equal to such OA&M Expenses, SG&A Expenses and Term C Loan Guaranty Fees of the
Borrower remaining unpaid; provided that amounts distributed in respect of OA&M
--------
Expenses and SG&A Expenses pursuant to this paragraph (b), Section 8.12(b),
------------- ---------------
Section 8.22(a) and clause first of Section 8.08(a) shall not in the aggregate
--------------- ------------ ---------------
exceed (x) $7,500,000 in any calendar quarter or (y) the amounts allocated
therefor in the then current Operating Budget.
(c) The Administrative Agent shall distribute, from and to the extent of
amounts on deposit in the Construction Contingency Reserve Account and as set
forth in a certificate of the Borrower, (i) directly to each Person to which an
amount in excess of $200,000 is due and payable and (ii) otherwise, to the
Checking Accounts designated by the Borrower for the benefit of the Persons
entitled thereto, the amounts identified in such certificate as Capital Costs
overruns then due and payable in the Borrowing Request delivered in connection
with the most recent Borrowing Date.
SECTION 8.17. Current Account. The Administrative Agent shall distribute,
---------------
from and to the extent of amounts on deposit in the Current Account and as set
forth in a certificate of the Borrower, (i) directly to each Person to which an
amount in excess of $200,000 is due and payable, the amounts previously
identified as OA&M Expenses and SG&A Expenses in Item 2 of the most recently
delivered Expense Certificate which are then due and owing, or (ii) to the
Checking Accounts designated by the Borrower for the benefit of the Persons
entitled thereto, all other such OA&M Expenses and SG&A Expenses previously
identified in Item 2 of the most recently delivered Expense Certificate which
are then due and owing.
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SECTION 8.18. Backhaul Reserve Account. The Administrative Agent shall
------------------------
pay from amounts on deposit in the Backhaul Reserve Account, at the Borrower's
written request, Backhaul Service Costs (whether or not set forth in the then
current Operating Budget). The Borrower's request shall be accompanied by a
certificate setting forth in reasonable detail the appropriate payment
instructions and the Backhaul Capacity in respect of which such payment is to be
made. In addition, at the Borrower's written request, the Administrative Agent
shall release the funds requested by the Borrower from the Backhaul Reserve
Account and apply them as Revenue in accordance with the provisions of Section
-------
8.08.
----
SECTION 8.19. System Upgrade Reserve Account. At the Borrower's written
------------------------------
request, the Administrative Agent shall distribute to the Contractor, from
amounts on deposit in the System Upgrade Reserve Account, the amount certified
by the Borrower and confirmed by the Independent Engineer to be due and owing in
respect of the a Permitted System Upgrade.
SECTION 8.20. Subsidiary Accounts. (a) If, prior to the Commercial
-------------------
Operation Date, OA&M Expenses and SG&A Expenses of a Subsidiary are due and
payable, the Administrative Agent shall distribute to the Person entitled
thereto, from amounts on deposit in such Subsidiary's Subsidiary Account, an
amount equal to such OA&M Expenses and SG&A Expenses of such Subsidiary then due
and payable to such Person.
(b) The Administrative Agent shall, on each Monthly Expense Transfer Date,
distribute, from amounts on deposit in each Subsidiary's Subsidiary Account, (i)
directly to each Person to which an amount in excess of $200,000 is due and
payable, the amount of OA&M Expenses and SG&A Expenses of such Subsidiary then
due and owing and identified in Item 1 of the Expense Certificate delivered
pursuant to Section 8.08(b) in respect of such date and (ii) to the Checking
---------------
Account of such Subsidiary designated by the Borrower for the benefit of the
Persons entitled thereto, all other OA&M Expenses and SG&A Expenses of such
Subsidiary then due and owing and identified in Item 1 of such Expense
Certificate.
(c) The Administrative Agent shall distribute to the applicable
Governmental Authority entitled thereto, from amounts on deposit in each
Subsidiary's Subsidiary Account, the amount of taxes then due and payable by
such Subsidiary (or required to be withheld from payments made by such
Subsidiary) to such Governmental Authority as set forth in a certificate of such
Subsidiary delivered to the Administrative Agent.
(d) The Administrative Agent shall, on each Subsidiary Transfer Date,
distribute to the Revenue Account, from amounts on deposit in each Subsidiary's
Subsidiary Account, the amount of such Subsidiary's Subsidiary Transfer Payment
due and payable on such date, as set forth in a certificate of the Borrower
delivered to the Administrative Agent.
SECTION 8.21. Borrower Equity Proceeds Account. On the last Business Day
--------------------------------
of each calendar month, the Administrative Agent shall distribute, from amounts
on deposit in the Borrower Equity Proceeds Account, directly to each Person to
which an amount in excess of $200,000 is due and payable (and otherwise to the
Checking Accounts designated by the
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Borrower for the benefit of the Persons entitled thereto), the amounts certified
by the Borrower as Capital Costs then due and payable. Notwithstanding anything
herein to the contrary, the Borrower shall be entitled to direct, in its sole
discretion, the application of the proceeds from time to time on deposit in the
Borrower Equity Proceeds Account.
SECTION 8.22. Checking Accounts. The Borrower and the Subsidiaries shall
-----------------
each be permitted to maintain general corporate checking accounts (collectively,
the "Checking Accounts"); provided that amounts on deposit in such Checking
----------------- --------
Accounts shall only be used to pay Capital Costs in accordance with the Capital
Budget, OA&M Expenses and SG&A Expenses in accordance with the then effective
Operating Budget, Term C Loan Guaranty Fees and expenses in connection with
Permitted Activities.
SECTION 8.23. Release of Excess Amounts. If, as of any Principal Payment
-------------------------
Date, (a) an amount is on deposit in the Debt Reserve Account, the Parent
Interest Reserve Account or the Operating Reserve Account in excess of the
Required Balance for such Account as the result of the actual realization of
income or gain on the amounts on deposit in such Account and (b) no Event of
Default or Designated Event has occurred and is continuing, then the
Administrative Agent shall transfer any such excess amounts to the Revenue
Account. After the payment of all Capital Costs, amounts remaining on deposit in
the Construction Account, the Construction Contingency Reserve Account and the
Clean-Up Account shall be applied first, to fund the Debt Reserve Account, the
-----
Parent Interest Reserve Account and the Operating Reserve Account to bring the
amounts on deposit therein up to the Required Balances (in the order of priority
set forth in Section 8.08(d)) and second, to the prepayment of the Loans in
--------------- ------
accordance with Section 2.11(e).
---------------
SECTION 8.24. Acceleration. Any other provision contained in this
------------
Agreement to the contrary notwithstanding, upon the occurrence and during the
continuance of an Event of Default and after the Loans have become or have been
declared to be due and payable in accordance with Article VII, the
-----------
Administrative Agent shall then apply amounts on deposit in the Accounts to the
payment of the Obligations in such order as the Administrative Agent shall
direct.
SECTION 8.25. Investment. Any amounts 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 Borrower (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 Borrower or its Affiliates. Any such investment may be sold
(without regard to maturity date) 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 Borrower of any loss resulting
from any such investment or sale and the Borrower may instruct the
Administrative Agent to, and the Administrative Agent shall, reimburse the
affected Account from Revenue.
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SECTION 8.26. 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 8.27. Other Determinations; Additional Accounts. The Borrower and
-----------------------------------------
the Administrative Agent may establish procedures not materially inconsistent
with this Agreement pursuant to which the Administrative Agent may conclusively
determine, for purposes of this Agreement, the amounts from time to time to be
distributed or paid by the Administrative Agent from amounts on deposit in the
Accounts or pursuant to which the Administrative Agent and the Borrower may
provide for reasonable operating and administrative flexibility. In addition,
the Borrower and the Administrative Agent may establish additional Accounts
(e.g., with respect to insurance proceeds, etc.) of the Borrower and the
Subsidiaries in order to better reflect the separateness of the Borrower's and
any Subsidiary's property or as the Borrower and the Administrative agree are
necessary, subject in each case to Liens in favor of the Administrative Agent
(for the benefit of the Secured Parties) and on terms and conditions regarding
withdrawal and application as are consistent with the terms hereof.
SECTION 8.28. 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 this Agreement, 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 available amounts
on deposit until the final collection thereof.
SECTION 8.29. 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 8.30. Purchaser Escrow Arrangements. Anything contained herein to
-----------------------------
the contrary notwithstanding, in the event a purchaser of Capacity requires that
its down payment, if any, on its purchase of Capacity be placed in escrow, the
Borrower shall be permitted to enter into customary escrow arrangements with
such purchaser; provided that once the Borrower becomes entitled to any such
--------
amounts in accordance with the terms of such escrow arrangements, such amounts
shall be deposited into the Revenue Account.
SECTION 8.31. Termination. Upon termination of this Agreement and the
-----------
payment in full of all Obligations, the Administrative Agent shall distribute
any remaining amounts on deposit in the Accounts, together with any interest
thereon, to the Borrower or as the Borrower
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may direct.
SECTION 8.32. Conflicts With Other Loan Documents. To the extent the
-----------------------------------
provisions of this Article VIII and the provisions of any other Loan Document
------------
conflict as to the application of Revenue or other amounts on deposit in the
Accounts, the provisions of this Article VIII shall take precedence.
------------
ARTICLE IX
THE ADMINISTRATIVE AGENT, OTHER AGENTS
AND AGENT RELATED PERSONS
-------------------------
SECTION 9.01. Authorization and Action. Each Lender hereby appoints and
------------------------
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement as are delegated
to the Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto. As to any matters not
expressly provided for by this Agreement (including enforcement or collection of
the Notes), the Administrative Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, the Required Lenders or the
Lenders, as the case may be, for actions or refraining from acting pursuant to
the terms of this Agreement, and such instructions shall be binding upon all
Lenders and all holders of Notes; provided that the Administrative Agent shall
--------
not be required to take any action that exposes the Administrative Agent to
personal liability (unless indemnified to its reasonable satisfaction) or that
is contrary to this Agreement or applicable law. The Administrative Agent
agrees to give to each Lender prompt notice of each notice given to it by the
Borrower or any of the Subsidiaries pursuant to the terms of this Agreement.
SECTION 9.02. Exculpation of, and Reliance by, Agent Related Persons.
------------------------------------------------------
Neither the Administrative Agent nor any other Agent nor any Agent Related
Person shall be liable to any Lender for any action taken or omitted to be taken
by it or them under or in connection with this Agreement or any other Loan
Document, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Administrative Agent
and each Agent Related Person:
(a) may treat the payee of any Note as the holder thereof or any
Lender as a Lender until the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by such payee or Lender, as
assignor, and an eligible assignee, as assignee, as provided in Section
-------
10.04;
-----
(b) may consult with legal counsel (including counsel for the
Borrower), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice
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of such counsel, accountants or experts;
(c) makes no warranty or representation to any Lender and shall not
be responsible to any Lender for any statements, warranties or
representations (whether written or oral) made in or in connection with
this Agreement or any other Loan Document;
(d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of
this Agreement or any other Loan Document on the part of the Borrower, or
any of the Subsidiaries or to inspect the property (including the books and
records) of the Borrower or any of the Subsidiaries;
(e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of,
or the perfection or priority of any lien or security interest created or
purported to be created under or in connection with, this Agreement or any
other instrument or document furnished pursuant hereto; and
(f) shall incur no liability to any Lender under or in respect of
this Agreement or any other Loan Document by acting upon any notice,
consent, certificate or other instrument or writing (which may be by
telecopier, telegram, or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
SECTION 9.03. Agent Related Persons and Affiliates. With respect to its
------------------------------------
Commitment, the Credit Extensions made by it and any Note issued to it, Toronto
Dominion (Texas) Inc. and Credit Suisse First Boston and their respective
Affiliates shall have the same rights and powers under this Agreement as any
other Lender and may exercise the same as though it were not an Agent; and the
term "Lender" or "Lenders" shall, unless otherwise expressly indicated, include
Toronto Dominion (Texas) Inc., Credit Suisse First Boston and any Affiliate
thereof in its individual capacity. Toronto Dominion (Texas) Inc., Credit
Suisse First Boston and their Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, accept investment banking engagements
from and generally engage in any kind of business with, the Borrower, any of the
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if Toronto Dominion (Texas) Inc., Credit
Suisse First Boston and their Affiliates were not an Agent and without any duty
to account therefor to the Lenders.
SECTION 9.04. Lender Credit Decision. Each Lender acknowledges that it
----------------------
has, independently and without reliance upon any Agent or Agent Related Person
or any other Lender and based on the financial statements referred to in Section
-------
3.01 and such other documents and information as it has deemed appropriate, made
----
its own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon any
Agent or Agent Related Person or any other Lender based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
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SECTION 9.05. Indemnification. The Lenders agree to indemnify each Agent
---------------
Related Person (to the extent not reimbursed by the Borrower or the
Subsidiaries), ratably according to the respective principal amounts of the
Loans owing to them, participation interests in Working Capital Loans and
Letters of Credit and Commitments issued by them, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against such Agent Related Person in any
way relating to or arising out of this Agreement or any other Loan Document or
any action taken or omitted by such Agent Related Person under this Agreement or
any other Loan Document; provided that no Lender shall be liable to any Agent
--------
Related Person for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent Related Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to
reimburse each Agent Related Person promptly upon demand for its ratable share
of any out-of-pocket expenses (including counsel fees) incurred by such Agent
Related Person 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 such Agent
Related Person is not reimbursed for such expenses by the Borrower or any of the
Subsidiaries.
SECTION 9.06. Collateral and Guaranty Matters. (a) The Administrative
-------------------------------
Agent is authorized on behalf of all the Lenders, without the necessity of any
notice to or further consent from the Lenders, from time to time to take any
action with respect to any collateral security or the Security Documents which
may be necessary to perfect and maintain perfected the security interest in and
Liens upon the collateral security granted pursuant to the Security Documents.
(b) The Lenders irrevocably authorize the Administrative Agent, at its
option and in its discretion, to (i) release any security interest or Lien
granted to or held by the Administrative Agent upon any collateral security (A)
upon termination of the Commitments and Letters of Credit, and payment in full
in cash of all principal of and interest on the Loans and all fees, costs,
indemnities, gross-ups and expenses that are payable under this Agreement or
under any other Loan Document and have been invoiced as of such termination date
(in which case the Lenders hereby authorize the Administrative Agent to execute,
and the Administrative Agent agrees to execute, reasonable releases in
connection with this Agreement and the Loan Documents (other than, in any event,
as to items stated to survive the termination of this Agreement or a Loan
Document)); (B) constituting property sold or to be sold or disposed of as part
of or in connection with any disposition permitted hereunder; (C) constituting
property in which the Borrower or any Subsidiary of the Borrower owned no
interest at the time the security interest and/or Lien was granted or at any
time thereafter; (D) consisting of an instrument evidencing Indebtedness or
other debt instrument, if the Indebtedness evidenced thereby has been paid in
full; or (E) if approved, authorized or ratified in writing by the Majority
Lenders or, if required by Section 10.02, the Required Lenders or each Lender,
-------------
as applicable, (ii) release any guarantor from its obligations under any
Guaranty constituting a Loan Document in the event such guarantor is not
required to be a guarantor pursuant to the terms of this Agreement (including,
in any event, the Term C Loan Guarantor at any time other than during any Term C
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Loan Guaranteed Period) and (iii) reduce the outstanding principal amount of the
Term C Loans that are guaranteed by the Term C Loan Guaranty as set forth in
Section 9.08(b). Upon request by the Administrative Agent at any time, the
---------------
Lenders will confirm in writing the Administrative Agent's authority to release
particular types or items of collateral security or a Guaranty pursuant to this
Section.
SECTION 9.07. Successor Administrative Agent. The Administrative Agent
------------------------------
may resign at any time by giving 30 days' written notice thereof to the Lenders
and the Borrower and may be removed at any time with or without cause by the
Majority Lenders. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Administrative Agent, with the prior
written consent of the Borrower (not to be unreasonably withheld or delayed) so
long as no Event of Default has occurred and is continuing. If no successor
Administrative Agent shall have been so appointed by the Majority Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Administrative Agent, then the retiring Administrative
Agent may, on behalf of the Lenders, appoint, with the prior written consent of
the Borrower (not to be unreasonably withheld or delayed) so long as no Event of
Default has occurred and is continuing, a successor Administrative Agent, which
shall be a Lender or a commercial bank organized under the laws of the United
States of America or of any State thereof and having a combined capital and
surplus of at least $250,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, discretion, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring
Administrative Agent's resignation or removal hereunder as Administrative Agent,
the provisions of this Article IX shall inure to its benefit as to any actions
----------
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
SECTION 9.08. Notice of Guaranty Draw. (a) Upon the written request of
-----------------------
the Borrower, the Administrative Agent shall, in accordance with the terms of
the Term C Loan Guaranty, give a Notice of Guaranty Draw to the Term C Loan
Guarantor specifying that a Borrowing of Term C Loans is being requested that is
subject to the Term C Loan Guaranty and specifying the remaining available Term
C Loan Commitment after giving effect to such Borrowing.
(b) Prior to the expiration of the Availability Period for Term C Loans,
upon the written request of the Borrower (such request to be in form and
substance reasonably satisfactory to the Administrative Agent), the
Administrative Agent shall reduce the Contingent Guaranty Amount (as defined in
the Term C Loan Guaranty), but not below the then outstanding principal amount
of Term C Loans that are guaranteed by the Term C Loan Guaranty by giving
written notice to the Term C Loan Guarantor in accordance with the Term C Loan
Guaranty.
(c) Upon the written request of the Borrower (such request to be in form
and substance
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reasonably satisfactory to the Administrative Agent), the Administrative Agent
shall reduce the outstanding principal amount of Term C Loans that are
guaranteed by the Term C Loan Guaranty by an amount equal to the Qualified
Capacity Revenue (whether arising prior to or after the expiration of the
Availability Period for Term C Loans) not used to support Term C Loans by giving
written notice to the Term C Loan Guarantor in accordance with the Term C Loan
Guaranty, together with a written release in respect of the Term C Loan Guaranty
as to the amount of such reduction, and, at the Borrower's election, such notice
shall indicate that the reduced amount shall be added back to the Available
Committed Amount (as defined in and in accordance with the Term C Loan
Guaranty).
ARTICLE X
MISCELLANEOUS
-------------
SECTION 10.01. Notices. Except in the case of notices and other
-------
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by facsimile, as follows:
(a) if to the Borrower, to it at 2 ▇▇▇▇▇▇'▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇'▇ ▇▇▇▇, ▇▇▇▇▇▇▇, attention of: Chief Financial Officer, copy to
General Counsel (fax: ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, to it at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (fax: ▇▇▇-▇▇▇-▇▇▇▇);
(c) if to the Syndication Agent, to it at Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇▇▇▇▇▇ (fax: ▇▇▇-▇▇▇-▇▇▇▇);
(d) if to the Issuer, to it at ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, attention of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (fax: ▇▇▇-▇▇▇-▇▇▇▇); and
(e) if to any other Lender, to it at its address (or facsimile
number) set forth on Schedule 2.01.
-------------
Any party hereto may change its address or facsimile number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given (a) to the Borrower or any of the
Subsidiaries in accordance with Article VII of terms of this Agreement shall be
-----------
deemed to have been given when sent, in the case of facsimile, when delivered,
in the case of hand or overnight courier service, and three days after mailing,
in the case of certified or registered mail, or (b) to any party hereto in
accordance with the terms of this Agreement other than for purposes of the
immediately preceding clause (a), shall be deemed to have been given on the date
----------
of receipt.
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SECTION 10.02. Waivers; Amendments. (a) No failure or delay by the
-------------------
Administrative Agent, the Issuer or any Lender 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, the Issuer 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 of this Agreement or any other Loan Document or
consent to any departure by the Borrower or any Subsidiary 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 or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, any Lender or the Issuer may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement, any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except pursuant to an
agreement or agreements in writing entered into by the Loan Parties party
thereto and the Majority Lenders or by such Loan Parties and the Administrative
Agent with the consent of the Majority Lenders (unless expressly provided
otherwise in this Agreement); provided that no such agreement shall (i) increase
--------
the Commitment of any Lender without the written consent of such Lender, (ii)
reduce the principal amount of any Loan or LC Disbursement or reduce the rate of
interest thereon, or reduce any fees payable hereunder, without the written
consent of each Lender affected thereby, (iii) postpone the scheduled date of
payment of the principal amount of any Loan or LC Disbursement, or any interest
thereon, or any fees payable hereunder, or reduce the amount of, waive or excuse
any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.18(b) or (c) in a manner that would alter the pro rata sharing
--------------- ---
of payments required thereby, without the written consent of each Lender, (v)
release any substantial and material portion of the Collateral (other than
releases in accordance with the terms of this Agreement or any Security
Document), amend Section 2.11(b), change the application of Revenue in
---------------
accordance with Section 8.08 or otherwise amend Article VIII without the consent
------------ ------------
of the Required Lenders, (vi) change any of the provisions of this Section or
the definition of "Required Lenders", "Majority Lenders" or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or make any determination or grant any consent
hereunder (other than to conform to any amendment or other modification made to
effectuate the provisions of Section 2.01(c)) or release all or substantially
---------------
all of the Collateral or release any guarantor (other than the Term C Loan
Guarantor at any time other than during any Term C Loan Guaranteed Period) from
its obligations under a guaranty, without the written consent of each Lender, or
(vii) amend, modify or waive the provisions of Section 2.10(c) or Section
--------------- -------
2.11(h) in such a manner as to adversely affect the rights of the Lenders
-------
participating in any particular tranche of Term Loans without the consent of the
Lenders holding more than 50% of the aggregate amount of Term Loans outstanding
under the tranche or tranches of Term Loans adversely affected by such
amendment, modification or waiver;
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provided further that no such agreement shall amend, modify or otherwise affect
--------
the rights or duties of the Administrative Agent or the Issuer hereunder without
the prior written consent of the Administrative Agent or the Issuer, as the case
may be. The Borrower shall deliver to the Contractor a copy of each amendment to
such Loan Document which has an impact on the Contractor promptly after
execution thereof.
SECTION 10.03. Expenses; Indemnity; Damage Waiver. (a) The Borrower shall
----------------------------------
pay (i) all reasonable out-of-pocket expenses incurred by the Administrative
Agent, the Arranger and their respective Affiliates, including the reasonable
fees, charges and disbursements of one U.S. documentation counsel for the
Administrative Agent, the Syndication Agent, the Arranger and their respective
Affiliates, in connection with the syndication of the credit facilities provided
for herein, the structuring, preparation and negotiation of this Agreement and
the Loan Documents, and any amendments, modifications or waivers of the
provisions hereof and any other Loan Document (whether or not the transactions
contemplated hereby or thereby shall be consummated) and the reasonable fees,
charges and disbursements of one U.S. counsel for the Administrative Agent, the
Syndication Agent, the Arranger and their respective Affiliates in connection
with the ongoing administration and consideration of legal matters relevant to
any of the foregoing, including the ongoing compliance with this Agreement and
the security relating hereto and thereto, (ii) the reasonable fees and expenses
of any local counsel retained by the Administrative Agent, (iii) the reasonable
ongoing fees and expenses of the Consultants in connection with the preparation
of their reports and the ongoing fees and expenses of the Independent Engineer
and the Insurance Consultant, (iv) any expenses the Borrower or any Subsidiary
specifically agrees to pay pursuant to any provision of the Loan Documents and
(v) all reasonable out-of-pocket expenses incurred by the Administrative Agent,
the Syndication Agent, the Arranger, the Issuer or any Lender, but only in
connection with the enforcement or protection of its rights or remedies in
connection with this Agreement and the Loan Documents, including its rights
under this Section, or in connection with the Loans made or Letters of Credit
issued hereunder, including in connection with any workout, restructuring or
negotiations in respect thereof.
(b) The Borrower shall indemnify the Administrative Agent, the Syndication
Agent, the Arranger, the Issuer, 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 (subject, in the case of ordinary expenses, to
the provisions of Section 10.03(a)), including the fees, charges and
----------------
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the transactions contemplated
hereby, (ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuer to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit), (iii) any presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of the Subsidiaries, or any Environmental Liability related
in any way to
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the Borrower or any of the Subsidiaries, or (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
--------
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses resulted from the gross negligence or wilful
misconduct of such Indemnitee or relate to a claim brought by an assignee or
Participant against the Lender making such assignment or participation.
(c) Each Indemnitee claiming any right to indemnity under paragraph (b) of
-------------
this Section by reason of the institution of any action against such Indemnitee
shall notify the Borrower thereof and shall consult with the Borrower from time
to time in connection with the defense of such action. In case any such action
shall be brought against such Indemnitee, the Borrower shall be entitled, at its
expense, to assume the defense thereof or to participate in such action with
counsel of its choice (which counsel shall be reasonably satisfactory to such
Indemnitee); provided that the Borrower may not settle any such action without
--------
the prior written consent of such Indemnitee (such consent not to be
unreasonably withheld or delayed) and the Borrower shall not be entitled to
assume the defense thereof if (i) such Indemnitee reasonably determines, on the
advice of counsel, that representation of both the Borrower and such Indemnitee
by the Borrower'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 Borrower, and such Indemnitee shall have reasonably
concluded, on advice of counsel, that there may be legal defenses available to
it which are significantly different from those available to the Borrower, (iii)
the Borrower 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.
SECTION 10.04. Successors and Assigns; Consent and Agreement. (a) The
---------------------------------------------
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby,
except that the Borrower 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 Borrower 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 Issuer, the Agent Related Persons and Related Parties
of the Lenders, and with respect to clause (vi) of Section 10.02(b), the
----------- ----------------
Contractor) any legal or equitable right, remedy or claim under or by reason of
this Agreement.
(b) Any Lender may assign to one or more assignees (other than to the
Borrower, any of the Subsidiaries 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
Loan Documents; provided that (i) except in the case of an assignment to a
--------
Lender, an Affiliate of any Lender or a Related Fund, no such assignment shall
be permitted without the prior written consent of each of the Borrower (unless
an Event of Default has
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occurred and is continuing), the Administrative Agent and the Issuer (which
consent shall not be unreasonably withheld or delayed), (ii) except in the case
of an assignment to a Lender, an Affiliate of any Lender or a Related Fund, or
an assignment of the entire remaining amount of the assigning Lender's
Commitment, the amount of the 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 Borrower and the Administrative Agent
otherwise consent, (iii) each partial assignment shall be made as an assignment
of a proportionate part of each Class of the assigning Lender's Loans and all
the assigning Lender's rights and obligations under this Agreement, (iv) 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 Borrower) and (v) the assignee shall
not, as of the effective date of such assignment, be entitled to receive any
greater payment under Section 2.15 or 2.17 than the assigning Lender shall be
------------ ----
entitled to receive with respect to the obligations sold. 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 Agreement, such Lender shall cease to be a party hereto). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
-------------
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, 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, and the Commitment of, and
principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The Notes 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 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 Borrower 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 10.04(c). The entries in the Register
----------------
shall be conclusive, and the Borrower, the Administrative Agent, the Issuer 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
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purposes of this Agreement, 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, evidence of such assignee's
-------------
exemption from withholding Taxes 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 of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Syndication Agent, the Arranger or the Issuer, 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 Borrower, the
Administrative Agent, the Syndication Agent, the Arranger, the Issuer and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement. Subject to paragraph (f) of this Section, the Borrower
-------------
agrees that each Participant shall be entitled to the benefits of Sections 2.15,
-------------
2.16 and 2.17 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) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Lender") may grant to a special purpose funding vehicle (an "SPV"),
--------------- ---
identified as such in writing from time to time by the Granting Lender to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Lender would otherwise be obligated
to make to the Borrower pursuant to this Agreement; provided that (i) nothing
--------
herein shall constitute a commitment by any SPV to make any Loan and (ii) if any
SPV elects not to exercise such option or otherwise fails to provide all or any
part of such Loan, the Granting Lender shall be obligated to make such Loan
pursuant to the terms hereof. The making of a Loan by an SPV hereunder shall
utilize the Commitment of the Granting Lender to the same extent, and as if,
such Loan were made by such Granting Lender. Each party hereto hereby agrees
that no SPV shall be liable for any indemnity or similar payment obligation
under this Agreement (all liability for which shall remain with the Granting
Lender). In furtherance of the foregoing, each party hereto hereby agrees
(which agreement shall survive the termination of this Agreement) that, prior to
the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior Indebtedness of an SPV, it will not
institute against, or join any other Person in instituting against, such SPV any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under the laws of the United States or any State thereof. In addition,
notwithstanding anything to the contrary in this Section 10.04(f), any
----------------
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SPV may (i) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by the Borrower and the
Administrative Agent) providing liquidity and/or credit support to or for the
account of such SPV to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPV. As this Section
applies to any particular SPV, this section may not be amended without the
written consent of such SPV.
(g) A Participant shall not be entitled to receive any greater payment
under Section 2.15 or 2.17 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 2.17 unless the
------------
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with the
provisions of Section 2.17(e) as though it were a Lender.
---------------
(h) 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 10.05. Limited Recourse. There shall be full recourse to the
----------------
Borrower and the Subsidiaries and all of their respective assets for the
liabilities of the Borrower and the Subsidiaries under this Agreement and the
other Loan Documents, but in no event shall any holder of any equity interest in
Parent (or any officer or director of such holder or any officer or director of
the Borrower or any Subsidiary, in its capacity as such) be personally liable or
obligated for such liabilities of the Borrower and the Subsidiaries.
SECTION 10.06. Survival. All covenants, agreements, representations and
--------
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, 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
or any Letter of Credit is outstanding and so long as the Commitments have not
expired or terminated. The provisions of Sections 2.15, 2.16, 2.17 and 10.03
------------- ---- ---- -----
and Article IX 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 Letters of Credit and the
Commitments or the termination of this Agreement or any provision hereof.
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SECTION 10.07. 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, the other
Loan Documents and any separate letter agreements with respect to fees payable
to an Agent and/or Agent Related Person 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 for the third, fourth, fifth and sixth paragraphs of the
Commitment Letter which shall expressly survive execution and delivery of this
Agreement and shall continue to be effective in accordance with the terms
thereof. This Agreement shall become effective when it shall have been executed
by the 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 10.04, their respective successors and assigns, and when the conditions
-------------
specified in Section 4.01 have been satisfied or waived. Delivery of an
------------
executed counterpart of a signature page of this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 10.08. Severability. Any provision of this Agreement 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 10.09. 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 set off 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 Borrower against any of and all the obligations of
the Borrower 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 10.10. 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.
(b) THE BORROWER 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
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ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, 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 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, THE ISSUER OR ANY LENDER MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST THE
BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) THE BORROWER 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 TO THIS AGREEMENT IN ANY COURT REFERRED TO IN
PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
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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 TO THIS AGREEMENT IRREVOCABLY CONSENTS TO SERVICE OF
PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.01. NOTHING IN THIS
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AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 10.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
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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 TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY).
SECTION 10.12. Headings. Article and Section headings and the Table of
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Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.13. Replacement of Independent Engineer or Insurance Consultant.
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Any appointment by the Administrative Agent of a replacement engineer to act as
the "Independent Engineer" or of a replacement "Insurance Consultant" under the
Loan Documents and the
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System Contracts shall be subject to the approval of the Borrower, such approval
not to be unreasonably withheld or delayed.
SECTION 10.14. Confidentiality. Each of the Administrative Agent, the
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Syndication Agent, the Arranger, the Issuer and the Lenders agrees to maintain
the confidentiality of the Information (as defined below) in accordance with its
customary practices for such materials, except that Information may be disclosed
(a) to its and its Affiliates' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any governmental or regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or the enforcement of rights
hereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Borrower (not to be
unreasonably withheld or delayed), (h) to the extent such Information (x)
becomes publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent, the Syndication Agent, the
Arranger, the Issuer or any Lender on a nonconfidential basis from a source
other than the Borrower or (i) to any direct or indirect contractual
counterparties in swap agreements or such contractual counterparties'
professional advisors; provided that such contractual counterparty or
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professional advisor to such contractual counterparty agrees in writing to keep
such information confidential to the same extent required of the Lenders
hereunder. For the purposes of this Section, "Information" means all
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information received from or on behalf of the Borrower relating to Parent, the
Borrower, the Subsidiaries, its business or the System, other than any such
information that is available to the Administrative Agent, the Issuer or any
Lender on a nonconfidential basis prior to disclosure by the Borrower; provided
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that, in the case of information received from the Borrower before or after the
date hereof, such information is clearly identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
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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.
GLOBENET COMMUNICATIONS
HOLDINGS LTD.
By: /S/ ▇▇▇▇ ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
TORONTO DOMINION (TEXAS) INC.,
as the Administrative Agent
By:/S/ ▇▇▇▇▇ ▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON,
as the Syndication Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
Signature Page 1