CREDIT AGREEMENT
Dated as of June 23, 1998
among
WORLDPORT INTERNATIONAL, INC.
as Borrower,
WORLDPORT COMMUNICATIONS, INC.
as Guarantor,
and
THE FINANCIAL INSTITUTIONS PARTY HERETO,
as Lenders
and
BANKERS TRUST COMPANY,
as Administrative Agent and Collateral Agent
TABLE OF CONTENTS
Page
STATEMENT1
ARTICLE I - DEFINITIONS1
Section 1.1. Definitions 1
Section 1.2. Computation of Time Periods 15
Section 1.3. Interpretation Generally 15
Section 1.4. Precedence 15
ARTICLE II - THE TERM LOAN15
Section 2.1. The Term Loan 15
Section 2.2. Borrowing Notice 16
Section 2.3. The Notes 16
Section 2.4. Fees 16
Section 2.5. Repayment of Term Loan 16
Section 2.6. Termination or Reduction of the Commitments 17
Section 2.7. Interest 17
Section 2.8. Mandatory Prepayments 18
Section 2.9. Payments and Computations 20
Section 2.10. Use of Proceeds 21
Section 2.11. Taxes 21
Section 2.12. Increased Cost 22
Section 2.13. Special Provisions 23
Section 2.14. Right of Set Off; Sharing of Payments, Etc. 24
Section 2.15. Securities Demand 25
ARTICLE III - CONDITIONS 25
Section 3.2. Conditions Precedent to the Bank Loans 25
Section 3.3. Conditions Precedent: General Principles 32
ARTICLE IV - REPRESENTATIONS AND WARRANTIES 32
Section 4.1. Representations and Warranties 32
ARTICLE V - AFFIRMATIVE COVENANTS 40
Section 5.1. General 40
Section 5.2. Authorizations and Consents 40
Section 5.3. Senior Ranking 40
Section 5.4. Insurances 40
Section 5.5. Taxes 41
Section 5.6. Licenses and Consents 41
Section 5.7. Regulatory Notices and Communications 41
Section 5.8. Laws and Directives 42
Section 5.9. Compliance with Material Contracts 42
Section 5.10. Environmental Obligations 42
Section 5.11. Intellectual Property 43
Section 5.12. Information and Reporting Covenants 44
Section 5.13. Employee Benefits 46
Section 5.14. Further Assurances 46
ARTICLE VI - NEGATIVE COVENANTS 47
Section 6.1. General 47
Section 6.2. Mergers, Consolidations, Sales of Assets and
Acquisitions 47
Section 6.3. Arm's Length Transactions 47
Section 6.4. Restrictions on Dividends, Etc. 48
Section 6.5. Liens 48
Section 6.6. Sale/Leaseback 49
Section 6.7. Indebtedness 49
Section 6.8. Guarantees 50
Section 6.9. Loans 50
Section 6.10. Leasing Arrangements 51
Section 6.11. Hedging Transactions 51
Section 6.12. Subsidiaries 51
Section 6.13. Acquisitions 51
Section 6.14. Investments 51
Section 6.15. Issuance of Shares 52
Section 6.16 Restriction on Payment of Dividends 52
Section 6.17 Payments to its Members 52
Section 6.18. Joint Ventures 53
Section 6.19. Business of Company and Subsidiaries 53
Section 6.20. Limitations of Debt Prepayments 53
Section 6.21. Amendment of Certain Documents, Etc. 53
ARTICLE VII - EVENTS OF DEFAULT 54
Section 7.1. Events of Default 54
Section 7.2. Suspension of Commitment 56
Section 7.3. Termination of Commitments; Acceleration 57
Section 7.4. Compulsory Sale 57
Section 7.6. Remedies Not Exclusive 57
Section 7.7. Rights Under Finance Documents 58
ARTICLE VIII - THE ADMINISTRATIVE AGENT AND THE DOCUMENTATION AGENT 58
Section 8.1. Appointment 58
Section 8.2. Nature of Duties of Administrative Agent 58
Section 8.3. Lack of Reliance on Administrative Agent 59
Section 8.4. Certain Rights of the Administrative Agent 59
Section 8.5. Reliance by Administrative Agent 59
Section 8.6. Indemnification of Administrative Agent 60
Section 8.7. The Administrative Agent in Its Individual Capacity 60
Section 8.8. Holders of Notes 60
Section 8.9. Successor Administrative Agent 60
Section 8.10. Collateral Matters 61
Section 8.11. Actions with Respect to Defaults 62
Section 8.12. Delivery of Information 63
ARTICLE IX - MISCELLANEOUS 63
Section 9.1. Payment of Expenses 63
Section 9.2. Assignments and Transfers 63
Section 9.3. Notices 65
Section 9.4. Amendments and Waivers 66
Section 9.5. No Waiver; Remedies 66
Section 9.6. Binding Effect 67
Section 9.7. Indemnity and Contribution 67
Section 9.8. Governing Law 68
Section 9.9. Execution in Counterparts 68
Section 9.10. Consent to Jurisdiction, Administrative Agent for
Service 68
Section 9.11. No Third Party Beneficiaries 69
Section 9.12. Marshalling; Recapture 69
Section 9.13. Severability 70
Section 9.14. Survival 70
Section 9.15. Limitation of Liability 70
Section 9.16. Independence of Covenants 70
Section 9.17. Confidentiality 70
Section 9.18. Waiver of Jury Trial 71
Section 9.19. Currency Indemnity 71
Section 9.20. Entire Agreement; Benefit 71
Section 9.21. Waiver of Immunity 72
Section 9.22. Certificates Conclusive 72
Section 9.23. Freedom of Choice 72
CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of June 23, 1998, among WORLDPORT INTERNATIONAL,
INC., a Delaware corporation, as borrower, (the "Company"), WORLDPORT
COMMUNICATIONS, INC., a Delaware corporation, as guarantor (the "Parent"), the
FINANCIAL INSTITUTIONS party hereto from time to time (the "Lenders"), and
BANKERS TRUST COMPANY, as Administrative Agent and Collateral Agent for the
Lenders (the "Administrative Agent").
PRELIMINARY STATEMENT
WHEREAS, the Company is seeking financing in connection with the acquisition of
Enertel (as defined below), including repayment of indebtedness of Enertel, the
payment of fees and expenses related thereto, and working capital for its
operations (to the extent permitted hereby) and the operations of Enertel;
WHEREAS, subject to and upon the terms and conditions herein set forth, the
Lenders are willing to make available to the Company an aggregate principal
amount not to exceed $120 million in the form of a senior secured Term Loan as
provided for herein, for the purposes described above;
WHEREAS, as a condition to making the Term Loan available to the Company, the
Parent has agreed to provide a guaranty of all the obligations of the Company in
respect thereof;
WHEREAS, the Company acknowledges that it has agreed to issue and sell Take-Out
Securities (as defined herein), the proceeds of which will be used to reduce or
repay the amount outstanding under the Term Loan described herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
"ABN Amro Debt" has the meaning set forth in Section 3.1(y).
"Acquisition Documents" means the Enertel Acquisition Agreement and all of the
other agreements and documents executed and delivered in connection therewith
(including, without limitation, all amendments to the Backbone Agreement
executed in connection therewith).
"Acquired Entity" means Enertel after giving effect to the consummation of the
Acquisition.
"Acquired Entity Indebtedness" means with respect to Indebtedness of Enertel to
be repaid simultaneously with the consummation of the Enertel Acquisition
consisting of the ABN Amro Debt in an aggregate principal amount of $__________,
plus accrued and unpaid interest thereon and the Existing Shareholder Debt in an
aggregate principal amount of $__________, plus accrued and unpaid interest
thereon.
"Administrative Agent" means Bankers Trust Company, acting as agent pursuant to
Article 8 or any successor or replacement Administrative Agent, which, in
accordance with Section 8.9, acts in such capacity.
"Affiliate" of any Person means (a) any other Person which, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person, or (b) any other Person who is a director or officer of such Person
or of any Person described in clause (a) above. For purposes of this
definition, "control" of a Person means the possession, direct or indirect, of
the power (i) to vote securities having 10% or more (on a fully-diluted basis)
of the outstanding shares of any class of capital stock of such Person (or in
the case of a Person that is not a corporation, 10% or more on a fully diluted
basis of any class of equity interest), or (ii) to direct or cause the direction
of the management and policies of such Person whether through the ownership of
voting securities, by contract or otherwise.
"Agreement" means this Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.
"Applicable Margin" means 6.0%, increasing by 0.5% at the end of each period of
three consecutive months ending after the Closing Date so long as the Term Loan
is outstanding; provided however, that the interest rate charged on the Term
Loan prior to an Event of Default shall not exceed (x) in the case of interest
which is paid in cash, 16.0% per annum at any time and (y) in the case of
interest which is capitalized pursuant to the terms of this Agreement, 18% per
annum at any time.
"Asset Sale" means any direct or indirect sale, issuance, conveyance, transfer,
lease (other than operating leases entered into in the ordinary course of
business), assignment or other transfer for value by the Parent, the Company or
any of their Subsidiaries (including any sale and leaseback transaction) to any
Person other than the Company or a wholly owned Subsidiary of the Company of (a)
any capital stock or other equity or convertible securities of the Parent, the
Company or any of their Subsidiaries other than common stock issued pursuant to
exercise of the Warrants, (w) common stock of the Parent issued pursuant to the
exercise of not more than 145,000 stock options granted by the Parent to
directors of the Parent, (x) directors' qualifying shares, (y) shares issued for
20% of the stock of the Dutch Holding Company to the Minority Shareholders (or
any other Person or Persons in lieu of the Minority Shareholders which purchases
such 20% equity investment in the Dutch Holding Company) and (z) the sale of
equity of the Parent to Global Crossing pursuant to the agreement or commitment
referred to in Section 3.1(ii)); or (b) any other property or assets of the
Parent, the Company or any of their Subsidiaries; provided, however, that Asset
Sales consisting of transactions referred to in clause (b) of this definition
shall not include such a transaction or a series of related transactions for
which the Parent, the Company or their Subsidiaries receive aggregate
consideration of less than $500,000 in any fiscal year in the aggregate.
"Assignment and Assumption Agreement" means an assignment and assumption
agreement substantially in form and substance satisfactory to the Administrative
Agent and Lenders.
"Auditors" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and/or such other firm of accountants as may be
appointed auditors of the Group in accordance with Section 5.14(c).
"Backbone Agreement" means that certain Backbone Agreement between the Enertel
Shareholders and Enertel.
"Business" means the business of the Parent and the Company and their
Subsidiaries which principally comprises at the date hereof the development,
operation and commercial exploitation of telecommunications systems and services
and other activities incidental or related thereto.
"Business Day" means any day other than a Saturday, Sunday or any other day on
which commercial banks are required by law or authorized to close in New York
City and, when used in connection with a LIBO Rate Loan, the term shall also
exclude any day on which banks are not open for dealings in dollar deposits in
the London interbank market.
"Capital Expenditure" means any expenditure which is required to be treated as a
capital expenditure in accordance with GAAP.
"Capital Lease" of a Person means any lease of (or other arrangement conveying
the right to use) any property (whether real, personal or mixed) by such Person
or lessee, which lease should, in accordance with GAAP, be required to be
accounted for as a finance lease on the balance sheet of such Person.
"Cash Equivalents" means any of the following:
(A) readily marketable direct obligations of the government of the United
States or any agency or instrumentality thereof or obligations unconditionally
guaranteed by the full faith and credit of any such government with a stated
maximum maturity not in excess of six months from the date of acquisition
thereof;
(B) insured certificates of deposit or time deposits with any bank or other
financial institution that is organized under the laws of the United States and
which has a combined capital and surplus of $500,000,000 (or its equivalent)
with a stated maximum maturity not in excess of 30 days from the date of
acquisition thereof; or
(C) commercial paper in an aggregate amount of no more than $1,000,000 (or its
equivalent) per issuer outstanding at any time issued by a corporation that is
organized under the laws of any state of the United States and which is rated P-
1 (or the then equivalent rating) or better by ▇▇▇▇▇'▇ or A-1 (or the then
equivalent rating) or better by S&P and with a stated maximum maturity not in
excess of six months.
"Cash Proceeds" means, with respect to any Asset Sale, cash payments (including
any cash received by way of deferred payment pursuant to, or monetization of, a
note receivable or otherwise (other than the portion of such deferred payment
constituting interest, which shall be deemed not to constitute Cash Proceeds)
but only as and when so received) received from such Asset Sale.
"Change of Control" means the occurrence of one or more of the following events:
(i) 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
Parent, the Company and their Subsidiaries taken as a whole to any Person or
group of related Persons (other than to the Company) for purposes of Section
13(d) of the Exchange Act (a "Control Group"), together with any Affiliates
thereof; (ii) the approval by the holders of capital stock of the Company of any
plan or proposal for the liquidation or dissolution of the Company; (iii) any
Person or Control Group other than Persons who at the date hereof are Affiliates
of the Parent shall become the owner, directly or indirectly, beneficially or of
record, of shares representing more than 50% of the total voting power of the
then outstanding Voting Stock of the Parent or the Company on a fully diluted
basis; (iv) individuals who at the beginning of any period of two consecutive
calendar years constituted the Board of Directors (together with any directors
who are members of the Board of Directors on the date hereof and any new
directors whose election by the Board of Directors or whose nomination for
election by the Parent's or Company's stockholders was approved by a vote of at
least a majority of the members of the Board of Directors then still in office
who either were members of the Board of Directors at the beginning of such
period or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the members of such board of
directors then in office; or (v) the merger or consolidation of the Parent or
Company with or into another corporation or the merger of another corporation
with or into the Parent or Company in one or a series of related transactions
with the effect that immediately after such transaction any such "Person" or
"group" of Persons or entities referred to above shall have become the
beneficial owner of securities of the surviving corporation of such merger or
consolidation representing a majority of the total voting power of the then
outstanding Voting Stock of the surviving corporation.
"Closing Date" means the date on which all of the conditions set forth in
Article III, as the case may be, have been satisfied or waived and on which the
Term Loan is made.
"Collateral" means the real and personal Property of any Person from time to
time subject to the Security Documents, as security for the Obligations
hereunder and under the Finance Documents.
"Collateral Agent" means Bankers Trust Company in its capacity as collateral
agent under the Security Documents and/or such other person as may from time to
time hold the whole or any part of the security created thereby.
"Commitment" means, with respect to any Lender, such Lender's undertaking to
make Loans hereunder subject to the terms and conditions hereof, in an aggregate
outstanding principal amount as of the Effective Date not to exceed the amount
set forth next to the name of such Lender on Schedule 1.1(a) and, thereafter,
subject to reduction pursuant to this Agreement. Upon the assignment of any
Lender's obligations under the terms of this Agreement the amount of such
Lender's undertaking shall be adjusted accordingly. The aggregate principal
amount of all Commitments shall not exceed US$120,000,000.
"Commitment Expiry Date" means (i) 5:00 p.m. New York City time on July 31, 1998
or (ii) such other date as may be agreed upon by the Company and the Lenders in
writing.
"Commitment Percentage" means, with respect to any Lender, the percentage which
such Lender's Commitment then constitutes of the aggregate Commitments or, at
any time after the Commitments shall have expired or terminated, the percentage
which the aggregate principal amount of such Lender's Loans then outstanding
constitutes of the aggregate principal amount of the Loans then outstanding.
"Default" means any event or condition that, with notice or lapse of time or
both, would become an Event of Default.
"Dollars" and the signs "$" and "US$" each means the lawful currency of the
United States of America.
"Domestic Subsidiaries" means Subsidiaries of the Company organized under the
laws of the United States or any political subdivision thereof.
"Dutch Holding Company" means Worldport Communications Europe, B.V., a
Netherlands corporation.
"Dutch Pledge Agreement" means the Pledge Agreement, by the Dutch Holding
Company and Worldport International to the Collateral Agent in form and
substance satisfactory to the Administrative Agent, the Collateral Agent and the
Lenders.
"Effective Date" has the meaning set forth in Section 9.2.
"Enertel" means Enertel N.V., a Netherlands corporation.
"Enertel Acquisition" means the acquisition by the Company of all of the
outstanding equity interests in Enertel pursuant to the Enertel Acquisition
Agreement.
"Enertel Acquisition Agreement" means the Share Purchase Agreement, dated as of
June 15, 1998, among all of the Enertel Shareholders, the Dutch Holding Company
and Enertel.
"Enertel Acquisition Date" means the date on which the Enertel Acquisition is
consummated.
"Enertel Guaranty" means the Guaranty Agreement by Enertel to the Collateral
Agent in form and substance satisfactory to the Administrative Agent, the
Collateral Agent and the Lenders.
"Enertel Shareholders" means all of the shareholders of, or holders of other
equity interests in, Enertel.
"Environment" means all gases, air, vapors, liquids, water, land, surface and
sub-surface soils, rock, flora, fauna, wetlands and all other natural resources
or part thereof including artificial or manmade buildings, structures or
enclosures.
"Environmental Approval" means any permit, license, authorization, consent or
other approval required under Environmental Laws.
"Environmental Laws" means all national or local statutes, orders, regulations
or other law or subordinate legislation or common law or regulatory codes of
practice concerning the protection of the Environment or health and safety which
are in force now or in the future and are binding upon members of the Group in
the jurisdictions in which members of the Group are operating (including by the
export of products or waste thereto), including, without limitation, in the
United States, the Netherlands and the Dominican Republic.
"Event of Default" has the meaning specified in Section 7.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from time
to time.
"ERISA" means the Employment Retirement Income Security Act of 1974, or any
successor statute, as the same may be amended from time to time.
"ERISA Affiliate" means any trade or business that (a) is a member of a group
which the Company is a member and (b) is treated as a single employer under
Section 414 of the Internal Revenue Code.
"ERISA Event" shall mean (a) any reportable event , as defined in Section 4043
of ERISA or the regulations issued thereunder, with respect to a Plan; (b) the
adoption of any amendment to a Plan that would require the provision of security
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA; (c) the
existence with respect to any Plan of an accumulated funding deficiency (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the incurrence of any liability under Title IV of ERISA
with respect to the termination of any Plan or the withdrawal or partial
withdrawal of the Parent, the Company or any of its ERISA Affiliates from any
Plan or Multiemployer Plan; (f) the receipt by the Parent, the Company or any
ERISA Affiliate from the PBGC or a Plan administrator of any notice relating to
the intention to terminate any Plan or Plans or to appoint a trustee to
administer any Plan; (g) the receipt by the Company or any ERISA Affiliate of
any notice 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; (h) the occurrence of a
prohibited transaction with respect to which the Parent, the Company or any of
their Subsidiaries is a disqualified person (within the meaning of Section
4975 of the Code) or with respect to which the Parent, the Company or any such
Subsidiary could otherwise be liable; and (i) any other event or condition with
respect to a Plan or Multiemployer Plan that could reasonably be expected to
result in liability of the Parent, the Company (other than PBGC premiums due but
not delinquent) in excess of $1,000,000.
"Existing Shareholder Debt" has the meaning set forth in Section 3.1(y).
"FCC" means the Federal Communications Commission or any successor thereof.
"Fee Letter" means the fee letter, dated as of June 19, 1998, between the
Company and Bankers Trust Company.
"Finance Documents" means, collectively, this Agreement, the Notes, each of the
Security Documents, the Guaranty Agreement, the Enertel Guaranty, Parent
Guaranty, the Fee Letter, the Warrant Agreement, each Assignment and Assumption
Agreement and any intercreditor agreement entered into in connection with this
Agreement.
"Finance Party" means the Administrative Agent, the Collateral Agent and the
Lenders.
"Financial Statements" means the consolidated balance sheet and consolidated
statement of operations and statement of cash flows and statements of changes in
shareholder's equity of the Company, for the period specified, prepared in
accordance with GAAP and consistent with prior practices.
"Fully Satisfied" means, with respect to the Obligations as of any date, that,
on or before such date, (a) the principal of and interest accrued to such date
on such Obligations have been paid in full in cash, (b) all fees, expenses and
other amounts then due and payable which constituted Obligations have been paid
in full in cash and (c) the Commitments have expired or irrevocably been
terminated.
"GAAP" means generally accepted accounting principles, standards and practices
in the United States from time to time.
"Global Crossing" shall mean Global Crossing, Ltd. and its successors.
"Governmental Authority" means any nation or government, any state, provincial,
local, municipal or other political subdivision thereof and any entity or
instrumentality (of any nature whatsoever) exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
in each case, domestic or foreign, including, without limitation, of the
European Union and the European Commission.
"Group" means the Parent and its Subsidiaries from time to time and "member of
the Group" means any of them.
"Guarantee" means, as applied to any obligation, (a) a guarantee (other than by
endorsement of negotiable instruments for collection in the ordinary course of
business), direct or indirect, in any manner, of any part or all of such
obligation and (b) an agreement, direct or indirect, contingent or otherwise,
the practical effect of which is to assure in any way the payment or performance
(or payment of damages in the event of nonperformance) of any part or all of
such obligation, including, without limiting the foregoing, the payment of
amounts drawn down by letters of credit.
"Guaranty Agreement" means the Guaranty Agreement, by each of the Guarantors in
favor of the Administrative Agent, in form and substance satisfactory to the
Administrative Agent, the Collateral Agent and the Lenders.
"Guarantors" means the Parent, Enertel and each of the Parent's Domestic
Subsidiaries and other Subsidiaries to the extent permissible under applicable
law.
"Hazardous Materials" shall mean all explosive or radioactive substances or
wastes, hazardous or toxic substances or wastes, pollutants, solid, liquid or
gaseous wastes, including petroleum or petroleum distillates, asbestos or
asbestos containing materials, polychlorinated biphenyls ( PCBs ) or PCB-
containing materials or equipment, radon gas, infectious or medical wastes and
all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" of any Person means, without duplication, all indebtedness and
other Obligations of such Person, contingent or otherwise:
(A) for borrowed money (whether or not the recourse of the lender is to the
whole of the assets of such Person or only to a portion thereof and including
any indebtedness issued in exchange for indebtedness for borrowed money);
(B) for or representing deferred or unpaid purchase price of property or
services (other than current trade payables incurred in the ordinary course of
business and payable in accordance with customary practices);
(C) evidenced by notes, bonds, debentures or other similar instruments;
(D) created or arising under any conditional sale or other title retention
agreement with respect to property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event of
default are limited to repossession or sale of such property);
(E) as lessee under leases which have been or, in accordance with GAAP should
be, recorded as Capital Leases;
(F) under acceptance, letter of credit or similar facilities;
(G) to purchase, redeem, retire, defease or otherwise acquire for value prior
to the date on which the Obligations are Fully Satisfied any capital stock or
any warrants, rights or options to acquire such capital stock, of such Person;
(H) arising by way of Guarantee, directly or indirectly of any Indebtedness of
others referred to in clauses (a) through (g) above in any manner by such
Person, or in effect arising by way of Guarantee directly or indirectly by such
Person, through an agreement:
(I) to pay or purchase such Indebtedness or to advance or supply funds for the
payment or purchase of such Indebtedness;
(II) to purchase, sell or lease (as lessee or lessor) Property, or to purchase
or sell services, primarily for the purpose of enabling the debtor to make
payment of such Indebtedness or to assure the holder of such Indebtedness
against loss;
(III) to supply funds to or invest in the debtor (including any agreement to
pay for Property or services irrespective of whether such Property is received
or such services are rendered), primarily for the purpose of enabling the debtor
to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss; or
(IV) otherwise to assure a creditor against loss;
(I) under executory obligations of such Person in respect of interest rate
agreements and foreign exchange and other financial hedge contracts; and
(J) arising by way of any Security Interest granted by such Person, directly or
indirectly with respect to any Indebtedness referred to in clauses (a) through
(g), where such Security Interest is on Property (including, without limitation,
accounts and contract rights) owned by such Person, and even though such Person
has not assumed or become liable for the payment of such Indebtedness.
Any reference to Indebtedness shall also be deemed to include any renewals,
extensions, deferrals, restructurings, refundings, amendments and modifications
of such Indebtedness.
"Indemnification Fee" means an amount equal to the Indemnification Rate times
the amount of principal being prepaid times the remaining number of days in the
Interest Period divided by 360.
"Indemnification Rate" means the difference between the LIBO Rate plus the
Applicable Margin and the yield as of the date of the prepayment for U.S.
treasury obligations having a maturity date of on or about the termination of
the relevant Interest Period as determined by the Administrative Agent in good
faith.
"Indemnified Party" has the meaning specified in Section 9.7.
"Information Memorandum" means the information memorandum prepared by Bankers
Trust Company at the request of the Parent and which has been approved by the
Parent and distributed to Lenders in connection with this Agreement.
"Intellectual Property" means the Intellectual Property Rights now or in the
future owned by members of the Group throughout the world or the interests of
any member of the Group in any of the foregoing now or in the future, together
with the benefit of all present and future agreements entered into or the
benefit of which is enjoyed by any member of the Group relating to the use or
exploitation of any of the aforementioned rights.
"Intellectual Property Rights" means all patents and patent applications, all
rights in inventions, all trade and service marks and trade and service ▇▇▇▇
applications (and all goodwill associated with such applications), all brand and
trade names, all get up and topography rights, all copyrights and rights in the
nature of copyright, all rights in software and databases, all design rights,
all registered designs and applications for registered designs, all trade
secrets, know-how, all confidential information, and all other intellectual
property rights of a similar or corresponding character which may subsist in any
part of the world.
"Intercompany Notes" means the following promissory notes: (i) the two
promissory notes, each dated the Closing Date, by the Dutch Holding Company to
the Company in the aggregate principal amount of $22,249,267and $75,033,233
respectively; (ii) the promissory note, dated the Closing Date, by Enertel to
the Dutch Holding Company in the aggregate principal amount of $22,249,267.
"Internal Revenue Code" or "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"Lenders" means the Persons listed on Schedule 1.1(a) and the Persons which from
time to time became a party hereto in accordance with Section 9.2.
"LIBO Rate" means, for a selected Interest Period, the rate that is equal to the
higher of:
(a)
X
__
1 - Y
where
"X" is the interest rate (rounded upwards, if necessary, to the next 1/16th of
1%) for deposits in U.S. Dollars approximately equal in principal amount of the
Term Loan for which such rate is being calculated, and for a period equal in
length to three months of which rate appears or, if more than one such rate
appears, the average of the rates which appear on the Reuters Screen LIBO Page
as of 11:00 a.m., New York City time, on the day that is two Business Days prior
to such date); and
"Y" is the percentage amount (expressed as a decimal) of reserves that
applicable U.S. laws would require the Administrative Agent to maintain with
respect to liabilities incurred on the London Interbank Market including,
without limitation, reserves required under Regulation D of the Board of
Governors of the Federal Reserve System for Euro-currency liabilities (as
defined in such regulation and deemed, for purposes of this Agreement, to
include the Administrative Agent's liabilities incurred on the London Interbank
Market) without benefit of or credit for pro-ration, exception or offsets
otherwise available from time to time under such regulation;
and (b) the Treasury Rate.
"Loan" has the meaning set forth in Section 2.1.
"Loan Party" means the Parent, the Company and any of their Subsidiaries
(including, without limitation, the Dutch Holding Company and Enertel) which is
a party to any Finance Document.
"Loss" has the meaning specified in Section 9.7.
"Majority Lenders" means, at any time, Lenders holding Loans and unused
Commitments representing greater than 50% of the sum of the aggregate principal
amount of the Loans at such time and the aggregate unused Commitments at such
time.
"Margin Regulations" has the meaning specified in Section 4.l(u).
"Material Adverse Effect" means at any time any effect (a) which is or is
reasonably likely, in the reasonable opinion of the Majority Lenders, to be
materially adverse to: (I) the business, assets, financial condition or
prospects of the Parent, the Company and their Subsidiaries, taken as a whole,
or (II) the ability of the Parent, the Company or any other Loan Party to
perform in a timely manner all or any of its obligations under any of the
Finance Documents; or (b) which results in any of the Finance Documents not
being legal, valid and binding on and enforceable against any Loan Party which
is a party thereto, and/or in the case of any Security Document, not providing
to the Collateral Agent the security over assets (other than immaterial assets)
expressed to be secured under that Security Document which complies with Section
4.1(aa) at such time.
"Material Contracts" means those agreements set forth in Schedule 1.1 hereto
(and including, without limitation, the Backbone Agreement and the Enertel Fixed
Infrastructure License), as amended pursuant to the Acquisition Documents.
"Maturity Date" means the date which is one year from the Closing Date .
"Minority Shareholders" means the Enertel Shareholders who have agreed to
purchase 20% of the shares of the Dutch Holding Company in accordance with the
Minority Shareholder Agreement.
"Minority Shareholder Agreement" means the Share Purchase Agreement dated June
19, 1998, by the Enertel Shareholders party thereto, and the Company, in the
form attached hereto as Exhibit 1.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. or its successors.
"Multiemployer Plan" means a multiemployer plan as defined in Section 4001(a)(3)
of ERISA.
"Net Cash Proceeds" means, with respect to any sale, lease, license, transfer or
other disposition of assets (including, without limitation, the sale of any debt
or equity securities) by any Person, the cash proceeds (including, without
limitation, all cash proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received) by such Person or any Subsidiary thereof, minus the sum of (a)
commercially reasonable and customary brokerage commissions, finder's fees and
similar commissions and fees, and other commercially reasonable and customary
fees and expenses (including commercially reasonable and customary fees and
expenses of counsel, accountants and investment bankers), related to such sale
or other disposition and (b) the amount of all taxes payable as a direct result
of such sale, lease, license, transfer or other disposition of assets.
"New York Court" has the meaning specified in Section 9.10(a).
"Note" means any Note issued pursuant to Section 2.3.
"Notice of Loan" means a notice of the Term Loan delivered pursuant to Section
2.2(a), in form and substance satisfactory to the Administrative Agent and the
Lenders.
"Obligation" means, with respect to any Loan Party, any obligation of such Loan
Party of any kind arising under the Finance Documents, including, without
limitation, any liability of Loan Party on any claim, whether or not the right
of any creditor to payment in respect of such claim is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
legal, equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 7.1(g). Without limiting the generality of the foregoing, the
Obligations of the Company include the obligation to pay principal, interest
(including, without limitation, capitalized interest), charges, expenses, fees,
attorneys' fees and disbursements, reimbursements, indemnities and other amounts
payable by the Company under any Finance Document.
"Officers' Certificate" means, as applied to any corporation, a certificate
executed on behalf of such corporation by two Responsible Officers; provided,
however, that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of the Loans hereunder shall include (i) a
statement that the officer or officers making or giving such Officers'
Certificate have read such condition and any definitions or other provisions
contained in this Agreement relating thereto, (ii) a statement that, in the
opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"Operating Budget" means, in relation to each financial year of the Group, a
projected balance sheet, projected profit and loss account and projected
cashflow statement for the Group for such financial year.
"Operating Licenses" means any regulatory license now or hereafter obtained by
the Parent, the Company or any of their Subsidiaries which is material in
enabling it to carry on its Business.
"Other Taxes" has the meaning specified in Section 2.11(b).
"Parent Guaranty" means the Guaranty Agreement by the Parent in favor of the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent, the Collateral Agent and Lenders.
"Permitted Financing" means:
(i) equipment lease financing; and/or
(ii) with the prior written consent of the Majority Lenders, loan financing to
the Parent, the Company or any of their Subsidiaries for the purpose of enabling
such Person to finance the acquisition of equipment (x) under the terms of which
recourse for all indebtedness arising as a result of such financing is limited
to the equipment purchased using such finance and (y) which is secured only by a
security interest on the equipment purchased by such financing;
provided in each case that:
(a)no Security Interest shall be granted by the Company or any Subsidiary over
the Operating Licenses; and
(b)the aggregate maximum principal amount of all financings of the type
described in paragraph (i) and (ii) above shall not exceed such amount as will
when aggregated with the amount of the total commitments exceed $35,000,000 at
any one time outstanding;
and for this purpose the principal amount of any financing of the type described
at paragraph (i) above shall be the aggregate of the capital element of all
future rentals under any such finance lease determined in accordance with GAAP.
"Permitted Indebtedness" means any Indebtedness expressly permitted to be
incurred, created, assumed or contracted pursuant to Section 6.7.
"Permitted Liens" has the meaning set forth in Section 6.5.
"Person" means an individual, corporation, partnership, business trust, joint
venture, association, joint stock company, trust, unincorporated organization or
other entity, or a government or any agency or political subdivision thereof.
"Plan" shall mean 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 307 of ERISA and in respect of which the Company or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an employer as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement, by the Parent, the Company and
their Subsidiaries party thereto to the Collateral Agent, in form and substance
satisfactory to the Administrative Agent, the Collateral Agent and the Lenders.
"Pledge of Receivable Agreements" shall mean, collectively, the Pledge of
Receivables and Loan Agreement, dated June 23, 1998, by the Borrower to the
Collateral Agent and Pledge of Receivables and Loan Agreement, dated June 23,
1998, by the Dutch Holding Company to the Collateral Agent.
"Preferred Stock" means the Parent's Series A Preferred Stock and Series B
Convertible Preferred Stock.
"Projections" means the projections of the Parent delivered to the
Administrative Agent prior to the Effective Date.
"Property" means any assets or property of any kind or nature whatsoever, real,
personal or mixed (including fixtures) whether tangible or intangible.
"Quarterly Payment Date" means October 1, January 1, April 1 and July 1 of each
year.
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing,
depositing, dispersing, emanating or migrating of any Hazardous Material in,
into, onto or through the Environment.
"Remedial Action" shall mean (a) remedial action as such term is defined in
CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by any
Governmental Authority or voluntarily undertaken (i) to clean up, remove, treat,
▇▇▇▇▇ or in any other way address any Hazardous Material in the Environment,
(ii) to prevent the Release or threat of Release, or minimize the further
Release of any Hazardous Material so it does not migrate or endanger or threaten
to endanger public health, welfare or the Environment, or (iii) to perform
studies and investigations in connection with, or as a precondition to, (i) or
(ii) above.
"Register" has the meaning specified in Section 9.2(d).
"Request" has the meaning specified in Section 2.15.
"Requirement of Law" means, as to any Person, the certificate of incorporation,
by-laws or other organizational or governing documents of such Person, and each
law, treaty, rule, regulation (including, without limitation, the Margin
Regulations), interpretation or 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 Loan Party, the Chief Executive
Officer, President, Treasurer or any equivalent officer of such Loan Party, as
the context requires.
"S&P" means Standard & Poor's Ratings Services, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or its successors.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" means the Security Agreement, granted by the Company and
the Domestic Subsidiaries to the Collateral Agent, in form and substance
satisfactory to the Administrative Agent, the Collateral Agent and the Lenders.
"Security Documents" means the Security Agreement, the Pledge Agreement, the
Dutch Pledge Agreement, the Pledge of Receivables Agreements and any other
document in favor of the Collateral Agent constituting security for or providing
recourse in respect of amounts outstanding under the Finance Documents.
"Security Interest" means any mortgage, claim, charge, pledge, lien,
hypothecation, right of set-off, trust, assignment by way of security,
reservation of title, any other type of preferential arrangement or any other
security interest whatsoever, howsoever created or arising or any other
agreement or arrangement (including, without limitation, a sale and repurchase
arrangement) having the practical effect of conferring security and any
agreement to enter into, create or establish any of the foregoing and including
the filing of any financing statement.
"Subsidiary" of any Person means (a) any corporation a majority of the total
voting power of the Voting Stock of which is at the time owned by such Person,
directly or indirectly through one or more such Subsidiaries, or (b) any
partnership, association, joint venture or other entity in which such Person,
directly or indirectly through Subsidiaries, is either a general partner or has
a 50% or more equity interest at the time.
"Take-Out Bank" has the meaning set forth in Section 3.1(q).
"Take-Out Securities" has the meaning specified in Section 2.15.
"Take-Out Securities Notice" has the meaning specified in Section 2.15.
"Taxes" has the meaning specified in Section 2.11(a).
"Term Loan" has the meaning specified in Section 2.1(a).
"Term Note" has the meaning specified in Section 2.3(a).
"Transaction Documents" means the Finance Documents and the Acquisition
Documents.
"Treasury Rate" means for any period a rate per annum (computed on a 365-day
year basis and actual days elapsed) equal to the rate determined by the
Administrative Agent to be the yield expressed as a rate in the secondary market
on U.S. treasury securities of substantially the same principal amount of the
Term Loans for which an interest rate is being determined and which have a term
to maturity of ten years (such determination to be based upon quotes obtained by
the Administrative Agent from established dealers in such market).
"Underwriters" means the underwriters of the Take-Out Securities.
"United States" and "U.S." each mean United States of America.
"Voting Stock" means capital stock issued by, or equivalent interests in, any
Person, the holders of which are ordinarily, in the absence of any contingency,
entitled to vote for the election of directors (or persons performing similar
functions) of such Person, even though the right so to vote has been suspended
by the happening of such a contingency.
"Warrants" means the warrants issued by the Parent to the Lenders, which
warrants are exercisable at a price of $.01 per share and which provide an
aggregate of 11% of the common stock of Parent, calculated on a fully-diluted
basis after giving effect to the exercise thereof.
"Warrant Agreement" means the Warrant Agreement, dated as of the Closing Date,
between the Administrative Agent, for the benefit of the Lenders, and the
Parent, together with the Warrants issued pursuant thereto, in each case in form
and substance satisfactory to the Administrative Agent and the Lenders.
"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.
"Wholly-Owned Subsidiary" means any Subsidiary all of whose outstanding Voting
Stock (other than directors' qualifying shares, if any) is owned, directly or
indirectly, by the Parent.
"Worldport International" means Worldport International, Inc., a Delaware
corporation.
"WP Acquisition" means WP Acquisition, Inc., a Texas corporation.
Section I.2. Computation of Time Periods
In this Agreement, in the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding."
Section I.3. Interpretation Generally
(A) The words "hereof", "herein" and "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.
(B) The words section, subsection, schedule and exhibit are to the applicable
portion of this Agreement unless otherwise specified.
(C) The meaning of defined terms shall be equally applicable to the singular
and plural forms of the defined terms.
(D) The headings of the several articles and sections and subsections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
(E) A document, notice, note, ▇▇▇▇ of exchange or other instrument shall be
deemed to have been validly signed and executed if it has been signed by either
an original signature or a facsimile signature or stamp.
(F) All references to amounts of money shall, unless otherwise indicated, be
references to United States dollars.
(G) Any of the "Administrative Agent", the "Collateral Agent", the "Lenders"
or a "Lender" shall so be construed as to include its successors and permitted
assigns.
Section I.4. Precedence.
In the event that any provision of any other Finance Document contradicts or is
otherwise incapable of being construed in conjunction with the provisions of
this Agreement, the provisions of this Agreement shall take precedence over
those contained in the other Finance Document.
ARTICLE II
THE TERM LOAN
Section 2.1. The Term Loan.
(a) Subject to and upon the terms and conditions of this Agreement, each Lender
severally and not jointly agrees to make a term loan to the Company on the
Closing Date (each, a "Loan" and collectively, the "Term Loan") in a sum not to
exceed such Lender's Commitment, provided that the aggregate principal amount of
the Term Loans shall not exceed $120,000,000 (plus interest capitalized with
respect to the Term Loan after the Closing Date or such lower amount as
contemplated by this Agreement).
(b) The Commitments shall expire on the Commitment Expiry Date if not utilized
on or prior to such date. All unutilized Commitments shall expire
simultaneously with the making of the Term Loans on the Closing Date.
Section 2.5 Borrowing Notice.
The Company shall notify the Administrative Agent by telephone by 11:00 am (New
York time) at least one Business Day before the proposed borrowing date
(confirmed by a Notice of Loan duly executed by a Responsible Officer of the
Company, and telecopied or otherwise delivered to the Administrative Agent
within twenty-four hours of the telephonic notice) for the Term Loans,
specifying the date and amount of the proposed Term Loan, and certifying each of
the matters set forth therein. The Notice of Loan shall also confirm that such
use is in accordance with Section 2.10. The Administrative Agent shall in turn
notify each other Lender by 11:00 am (New York time) on the second Business Day
preceding the proposed borrowing date. On the specified borrowing date each
Lender shall make available to the Administrative Agent by no later than 12:00
noon (New York time), at its offices located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇, in funds immediately available to the Administrative Agent, such
Lender's ratable share of the requested Term Loan. Upon receipt of such funds
by the Administrative Agent and upon fulfillment of the applicable conditions
set forth in Article 3, the Administrative Agent will immediately make such
funds available to Company.
Section 2.6. The Notes
The obligation of the Company to repay the Term Loan shall be evidenced by one
or more promissory notes of the Company (each, a "Term Note"), dated the
applicable Closing Date, payable to the order of each Lender in a principal
amount equal to such Lender's Commitment and otherwise in form and substance
satisfactory to the Lenders. Each Lender is hereby authorized to record on its
books and records, the date and amount of each Term Loan made by such Lender,
the date and amount of each payment or prepayment of principal thereof and the
interest rate with respect thereto. Any such recordation shall constitute prima
facie evidence of the accuracy of the information so recorded; provided,
however, that the failure to make any such recordation or any incorrect
recordation shall not affect the Obligations of the Company hereunder or under
the Term Notes. Each Term Note shall be stated to mature on the Maturity Date.
Section 2.7. Fees
The Company shall pay to each Lender and to the Administrative Agent all fees
and expenses agreed to by the Company in the Fee Letter.
Section 2.8. Repayment of term Loan
(A) Voluntary. The Company may repay, in whole or in part, the outstanding
principal amount of the Term Loan, at any time and from time to time on the
following terms and conditions:
(i) the Company shall give the Administrative Agent prior to 12:00 Noon (New
York time) at least one Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay the Term Loan, the
amount of such prepayment to be prepaid which notice the Administrative Agent
shall promptly transmit to each of the Lenders;
(ii) each prepayment of the Term Loan shall be applied pro rata among the
Lenders that made such Term Loan;
(iii) all notice of voluntary prepayments, once given to the Administrative
Agent, shall be irrevocable; and
(iv) once prepaid, the Term Loan may not be reborrowed.
(B) Mandatory Repayments of Term Loan. The Term Loan shall mature on the
Maturity Date and shall be repaid in full by the Company on such date, without
premium or penalty or further action on the part of any Lender, the
Administrative Agent or the Collateral Agent. Once repaid the Term Loan may not
be reborrowed.
Section 2.9. Termination or Reduction of the Commitments.
(A) Voluntary. The Company shall have the right at any time and from time to
time, upon three (3) Business Days' prior written notice to the Administrative
Agent, to terminate the unused portions of the Commitments in whole or ratably
reduce them in part, without penalty or premium. Any partial reduction shall be
in the minimum aggregate amount of $5,000,000.
(B) Cancellation of Commitments. Any termination or reduction of the Lender's
respective Commitments hereunder shall be permanent and the Commitments cannot
thereafter be restored or increased.
Section 2.7. Interest.
(A) Term Loans. The Company shall pay interest on the unpaid principal amount
of the Term Loan from the date on which the Term Loan is made until such
principal amount has been repaid in full, payable in arrears on each Quarterly
Payment Date, upon each prepayment (on the amount prepaid), at the time of each
principal repayment (on the amount so repaid), at maturity and after maturity on
demand, in all cases at a per annum rate equal to the LIBO Rate plus the
Applicable Margin, which per annum rate shall change simultaneously with each
change in the LIBO Rate or as otherwise required by this Section 2.7.
(b) Default Interest. Upon the occurrence and during the continuance of an
Event of Default, the Company shall pay, on demand of any Lender, interest on
the unpaid principal amount of the outstanding Loans at a rate per annum equal
to the non-default rate of interest required to be paid on the unpaid principal
amount of the Loans during such period plus 2% per annum.
(c) Capitalized Interest. Notwithstanding anything herein to the contrary, so
long as no Default or Event of Default shall have occurred and be continuing,
the Company shall have the right to satisfy its obligation to pay interest with
respect to any Note by adding such interest to the principal amount outstanding
under such Note, on the applicable interest payment date. The Company shall
give the Administrative Agent three Business Days' irrevocable notice that it
will exercise such right with respect to interest payable on the next interest
payment date.
Section 2.10. Mandatory Prepayments
(a)(i) Prepayments from Asset Sales. Upon receipt by the Parent, the Company
or any of their Subsidiaries of Cash Proceeds of any Asset Sale occurring after
the Closing Date, the Company shall prepay the Term Loan with the Net Cash
Proceeds received from such Asset Sale, in the case of Asset Sales pursuant to
clause (a) of the definition thereof, concurrently with the consummation of such
Asset Sale, and with respect to all other Asset Sales, on a date not later than
the Business Day next succeeding the earlier of (1) the 30th day after
consummation of such Asset Sale unless prior to such date, the Parent, the
Company or any such Subsidiary has entered into a firm order or commitment for
the purchase of an asset or assets which shall be used in the Business and (2)
the 90th day after the consummation of such Asset Sale if and to the extent that
such Net Cash Proceeds are not applied by the Parent, the Company or any of
their Subsidiaries to the replacement of such asset or assets with an asset or
assets useful in the Business. In each case, such new asset shall be subject to
the Security Interest of the Security Documents to the same extent as the asset
subject to such Asset Sale or otherwise owned by a Loan Party or other member of
the Group whose stock is pledged by a member of the Group pursuant to a Pledge
Agreement. Concurrently, with the consummation of an Asset Sale, the Company
shall deliver to the Agent an Officer's Certificate demonstrating the derivation
of Net Cash Proceeds from the gross sales price of such Asset Sale.
(ii) Prepayments from Issuances of Take-Out Securities and Other Indebtedness.
Concurrently with the receipt by the Parent, the Company or any of their
Subsidiaries of proceeds from the issuance of Take-Out Securities and, except
for issuances of Indebtedness permitted pursuant to Sections 6.7(c) and (d) and
for Permitted Financings, any other Indebtedness, the Company shall prepay the
Loan in a principal amount equal to the lesser of the proceeds thereof (net of
expenses payable by the Parent, the Company or any such Subsidiary to any Person
other than an Affiliate of the Company in connection with the issuances thereof)
or the aggregate principal amount of the Notes then outstanding.
(iii) Prepayments from Loss Proceeds. The Company shall repay the Term Loan in
an amount equal to the amount received in respect of any insurance payment or
condemnation award in respect of the loss, damage, destruction or taking of any
assets of the Parent, the Company or any of their Subsidiaries, other than
receipts which:
(1) are less than $250,000 in the aggregate;
(2) are reinvested (or with respect to which there are contractual commitments
to reinvest) in equipment or assets of the Business within 90 days of the
receipt thereof; and
(3) are received and held at a time when no Default or Event of Default shall
have occurred.
(b) Notice. The Company shall notify the Agent of any prepayment to be made
pursuant to this Section 2.8 at least two Business Days prior to such prepayment
date unless shorter notice is satisfactory to the Majority Lenders).
(c) Company's Mandatory Prepayment Obligation; Application of Prepayments. All
prepayments shall include payment of accrued interest on the principal amount so
prepaid and shall be applied to payment of interest before application to
principal.
(d) Mandatory Offer to Purchase Notes.
(i) Upon the occurrence of a Change of Control (the date of such occurrence,
the "Change of Control Date"), each Lender shall have the right to require the
repurchase of any or all of the Notes pursuant to an offer to purchase (the
"Change of Control Offer") at a purchase price equal to 100% of the aggregate
principal amount thereof, plus accrued interest thereon to the date of
repurchase.
(ii) The notice to the Administrative Agent shall contain all instructions and
materials necessary to enable each Lender to tender its Notes.
(iii) Within 30 days following any Change of Control the Company shall mail a
notice to the Agent stating:
(1) that the Change of Control Offer is being made pursuant to this Section
2.8(iv) and that all Notes tendered will be accepted for repayment;
(2) the purchase price and the purchase date, which shall be no earlier than 30
days nor later than 40 days from the date such notice is mailed (the "Offer
Payment Date");
(3) that any Note not tendered will continue to accrue interest;
(4) that any Note accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Offer Payment Date unless the Company
shall default in the payment of the repurchase price of the Notes;
(5) that if a lender elects to have a Note purchased pursuant to the Change of
Control Offer it will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Commune prior to 5:00 p.m. New York time on the Offer Payment Date;
(6) That a Lender will be entitled to withdraw its election if the Company
receives, not later than 5:00 p.m. New York time on the Business Day preceding
the Offer Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the principal amount of Notes such Lender delivered for purchase,
and a statement that such Lender is withdrawing its election to have such Note
purchased; and
(7) that if the Notes are tendered only in part a new Note of the same type
will be issued in principal amount equal to the unpurchased portion of the Notes
surrendered.
(iv) On or before the Offer Payment Date, the Company shall (i) accept for
payment Notes or portions thereof which are tendered in accordance with the
above, and (ii) deposit at the Payment Office U.S. Legal Tender sufficient to
pay the purchase price of all Notes to be purchased. The Administrative Agent
shall promptly mail to the Lenders whose Notes are so accepted payment in an
amount equal to the purchase price unless such payment is prohibited pursuant to
Section 8 hereof or otherwise.
Section 2.11. Payments and Computations.
(A) Payments. The Company shall make each payment hereunder and under each
Note not later than 11:00 a.m. (New York time) on the day when due, in United
States dollars, to the Administrative Agent in immediately available funds.
Such payments shall be made by wire transfer to the account of the
Administrative Agent at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ of America, ABA #▇▇▇▇▇▇▇▇▇ for the account of Bankers Trust Company
(Account #▇▇▇▇▇▇▇▇), Attention: Commercial Loan Division, or such other account
as the Administrative Agent may designate to the Company by notice.
(B) Computations. All computations of interest and fees shall be made by the
Administrative Agent on the basis of a year of 360 days, in each case for the
actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Administrative Agent of an interest rate or fee hereunder
and under each Note shall be conclusive and binding for all purposes, absent
manifest error.
(C) Business Day. Whenever any payment hereunder or under a Note shall be
stated to be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall, in each
case, be included in the computation of payment of interest or any fee, as the
case may be; provided, however, that if such extension would cause the payment
of interest on or principal of the Loans to be made in the next following
calendar month, such payment shall be made on the immediately preceding Business
Day.
(D) No Defense. To the fullest extent permitted by law, the Company shall make
all payments hereunder and under the Note regardless of any defense,
counterclaim or right of set-off (which the Company, in each case, hereby
waives), including, without limitation, any defense or counterclaim based on any
law, rule or policy which is now or hereafter promulgated by any Governmental
Authority and which may adversely affect the Company's obligation to make, or
the right of a holder of a Note to receive, such payments.
(E) Allocation. Any money paid to, received by, or collected by the
Administrative Agent or any Lender pursuant to this Agreement or any other
Finance Document, (including on the sale or other realization upon any
Collateral), shall be applied in the following order, at the date or dates fixed
by the Administrative Agent:
First: to the indefeasible payment of any unpaid fees and reimbursement of
unpaid expenses of the Administrative Agent or the Collateral Agent;
Second: to the indefeasible payment of all costs, expenses, other fees,
commissions and taxes incurred by any Lender;
Third: to the indefeasible payment of all accrued interest to the date of such
payment or collection;
Fourth: to the indefeasible payment of the amounts of Obligations then due and
unpaid under this Agreement, the Notes or any other Finance Document for
principal, in respect of which or for the benefit of which such money has been
paid or collected, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal; and
Fifth: the balance, if any, to the Person lawfully entitled thereto.
Section 2.11. Use of Proceeds.
The Company agrees to use the proceeds of the Term Loan as follows:
(A) an amount equal to $17,217,500 to be contributed to the Dutch Holding
Company, and an amount equal to $97,282,500 to be loaned to the Dutch Holding
Company, the proceeds of which, in each case, shall be used by the Dutch Holding
Company for payment of the purchase price for the Enertel Acquisition (including
the repayment of Acquired Entity Indebtedness) and for working capital of the
Company (to the extent permitted hereby) and Enertel following consummation of
the Enertel Acquisition;
(b) an amount not in excess of $250,000 to repay in full all outstanding
obligations owed by the Parent, the Company or any of their Subsidiaries in
respect of the acquisition by the Parent of MathComp, B.V.; and
(c) to pay all fees and expenses incurred in connection with this Agreement and
the Enertel Acquisition.
Section 2.13. Taxes.
(A) Taxes. Any and all payments by the Company hereunder or under the Notes
shall be made, in accordance with Section 2.9, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, additions to tax, interest, penalties and all other
liabilities with respect thereto, excluding taxes imposed or levied on or
measured by the overall net income of the Administrative Agent or the Lenders
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Company shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Note to the Administrative Agent or the Lenders or any of
their respective Affiliates who may become a holder of the Note: (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.11) the Administrative Agent or the Lenders or any of their
respective Affiliates who may become a holder of the Note receives an amount
equal to the sum it would have received had no such deductions been made; (ii)
the Company shall make such deductions; and (iii) the Company shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law.
(B) Other Taxes. In addition, the Company agrees to pay any present or future
stamp, mortgage recording or documentary taxes or any other excise, franchise or
property taxes, charges or similar levies which arise from any payment made
hereunder or under a Note or other Finance Document or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or the
other Finance Documents (hereinafter referred to as "Other Taxes") and hold the
Administrative Agent and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such Other Taxes.
(C) Indemnity. The Company will indemnify the Administrative Agent and any
Lender for the full amount of Taxes or Other Taxes arising in connection with
payments made under this Agreement (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.11) paid by the Administrative Agent or any Lender or any of their respective
Affiliates who may become the holder of a Note and any liability (including
penalties, additions to tax interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within seven
(7) days from the date the Administrative Agent or any Lender or any of their
respective Affiliates who may become a holder of a Note makes written demand
therefor.
(D) Furnish Evidence to Administrative Agent. The Company will make reasonable
efforts to obtain certified copies of tax receipts evidencing the payment of any
Taxes so deducted or withheld from each taxing authority imposing such Taxes.
The Company will furnish to the Lenders, within 60 days after the date the
payment of any Taxes so deducted or withheld is due pursuant to applicable law,
either certified copies of tax receipts evidencing such payment by the Company
or, if such receipts are not obtainable, other evidence of such payments by the
Company reasonably satisfactory to the Lenders.
(e) Tax Affairs. Nothing in this Section 2.11 shall oblige any Lender to
disclose to the Company or any other person any information regarding its tax
affairs or tax computations or interfere with the right of any Lender to arrange
its tax affairs in whatever manner it thinks fit and, in particular, no Lender
shall be under any obligation to claim relief from its corporate profits or
similar tax liability in credits or deductions available to it and, if it does
claim, the extent, order and manner in which it does so shall be at its absolute
discretion.
(f) Survival. Without prejudice to the survival of any other agreement of the
Company hereunder, the agreements and obligations of the Company contained in
this Section 2.11 shall survive the payment in full of all amounts due hereunder
and under the Notes.
Section 2.14. Increased Cost.
(A) Increased Cost. If any Lender determines that the adoption of any
applicable law, rule, regulation, directive or guideline (including those
regarding capital adequacy), or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable authority charged with the interpretation or administration
thereof, or the effectiveness after the date hereof of any of the foregoing
which have been previously adopted but are not yet fully effective (including,
but not limited to, each phase in the effectiveness of the "Risk-Based Capital
Guidelines" which have been previously adopted by the United States Office of
the Comptroller of the Currency and certain other United States banking
regulatory agencies), or compliance by any Lender with any direction,
requirement or request regarding capital adequacy (whether or nor having the
force of law) of any Governmental Authority, central bank or comparable agency:
(I) affects or would affect the amount of capital required or expected to be
maintained by such Lender or any corporation controlling such Lender and such
Lender determines that the amount of such capital is increased as a consequence
of such Lender's obligations under this Agreement (taking into consideration
such Lender's policies (in effect on the date hereof) with respect to capital
adequacy and such Lender's targeted return on capital);
(ii) has or would have the effect of reducing the rate of return on the capital
or assets of such Lender or such Lender's holding company as a consequence of
its Commitments or Obligations hereunder; or
(iii) subjects or would subject any Lender to any tax, duty or other charge, or
changes or would change the basis of taxation of the Loans (other than income
taxes payable by the Lenders),
then, from time to time upon receiving notice as described in Section 2.12(b)
from such Lender, the Company shall promptly pay to such Lender, any additional
amounts as will compensate such Lender and/or any corporation controlling such
Lender for such change or effect.
(B) Notice, Evidence. Each Lender will promptly notify the Company of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section 2.12. A
certificate of any Lender claiming compensation under this Section and setting
forth in reasonable detail the basis for and the calculation of the additional
amount or amounts to be paid to it hereunder shall be conclusive in the absence
of manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
Section 2.15. Special Provisions.
(a) Reimbursement for Losses. Upon demand by the Administrative Agent or any
Lender, Company shall reimburse by payment of an Indemnification Fee to the
Administrative Agent or such Lender for any loss, cost or expense which they may
reasonably incur or have incurred as a result of such payment, acceleration or
conversion including, without limitation, any loss (and also including loss of
anticipated profits), cost or expense that may be incurred or has been incurred
by reason of the liquidation or reemployment of borrowings or other funds
acquired by Lenders to fund or maintain the Loan (including, but not limited to,
any interest or fees payable by such Lenders to lenders of funds obtained by
them in order to make or maintain such Loans) which such Lender incurs or may
incur as a result of any prepayment or acceleration of maturity of any Loan.
With each demand for reimbursement under this Section 2.13, such Lender shall
submit a certificate to Administrative Agent and Company setting forth the basis
for the demand.
(b)I Funding Through Other Offices. Each Lender may fulfill its Commitment for
Loans by causing a foreign branch or affiliate of such Lender to make Loans.
Nevertheless, the Company shall owe its obligations on Loans to such Lender
rather than to any foreign branches or affiliates of such Lender. Each Lender
shall repay its foreign branches or affiliates.
(c)I Discretion of Lenders as to Manner of Funding. Notwithstanding any other
provision of this Agreement, each Lender may fund or maintain its funding of all
or any part of the Loans in any manner it chooses.
(d)I Minimum Amounts. All borrowings, conversions, continuations, payments and
prepayments hereunder shall be made or selected so that, after giving effect
thereto, the aggregate principal amount of any Loan shall not be less than
$1,000,000 or an integral multiple of $500,000 in excess thereof.
Section 2.16. Right of Set Off; Sharing of Payments, Etc.(A)I Right of Set-Off.
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
and during the continuance of any Event of Default, the Company authorizes each
Lender at any time or from time to time, without presentment, demand, protest or
other notice of any kind to the Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special, time or demand, provisional or final) in any
currency and any other indebtedness at any time held or owing by such Lender
(including, without limitation, by branches and agencies of such Lender wherever
located) to or for the credit or the account of the Company against and on
account of the Obligations of the Company to such Lender under this Agreement or
under any of the other Finance Documents, including, without limitation, all
interests in or participations in the Obligations purchased by such Lender
pursuant to Section 9.2, and all other claims of any nature or description
arising out of or in connection with this Agreement or any other Finance
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although the Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured. A Finance Party may exercise such rights
notwithstanding that the amounts concerned may be expressed in different
currencies and each Finance Party is authorized to effect any necessary
conversions at a market rate of exchange selected by it.
(B)I Sharing. If any Lender shall obtain from the Company payment of any
principal of or interest on any Loan owing to it or payment of any other amount
under this Agreement, a Finance Document or any Note held by it through the
exercise of any right of set-off, banker's lien or counterclaim or similar right
or otherwise (other than from the Administrative Agent as provided herein) and,
as a result of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans or such other amounts
then due to such Lender by the Company than the percentage received by any other
Lenders, it shall promptly purchase from such other Lenders participations in
(or, if and to the extent specified by such Lender, direct interests in) the
Loans or such other amounts, respectively, owing to such other Lenders (or any
interest due thereon, as the case may be) in such amounts, and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such excess payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such excess
payment) pro rata in accordance with the unpaid principal of and/or interest on
the Loans or such other amounts, respectively, owing to each of the Lenders. To
such end all the Lenders shall make appropriate adjustments among themselves (by
the resale of participations sold or otherwise) if such payment is rescinded or
must otherwise be restored.
(C)I No Requirement. Nothing in this Agreement shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Company. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders entitled under this Section to share
in the benefits of any recovery on such secured claim.
Section 2.17. Securities Demand.(A) Upon request (a "Request") from any Take-
Out Bank made at any time after the earlier of (x) the date on which the Enertel
Acquisition has been consummated and (y) the Commitment Expiry Date, the Parent
and the Company shall take all reasonable actions necessary or desirable, to the
extent within its power, so that the Take-Out Bank can, as soon as practicable
after such Request, privately place or publicly distribute the Take-Out
Securities (the "Initial Request Date"). Upon notice by the Take-Out Bank (a
"Take-Out Securities Notice"), at any time and from time to time following the
Initial Request Date, the Parent will issue and sell Take-Out Securities upon
such terms and conditions as specified in the Take-Out Securities Notice.
"Take-Out Securities" shall mean debt securities issued pursuant to a private
placement on the following terms: (i) fixed interest rates or yields which shall
be determined by the Take-Out Banks based on a spread above the LIBO Rate, as
determined in light of then prevailing market conditions, provided that the
effective yield thereon shall not exceed a rate equal to (A) 16% if such Take-
Out Securities are issued prior to the date which is nine-months after the
Closing Date and (B) 18% if such Take-Out Securities are issued thereafter,
plus, in either case, Warrants exercisable for ten years from the issuance
thereof at a price of $.01 per share for up to 15% (less the amount of the
Warrants issued pursuant to the Warrant Agreement) of the common stock of the
Parent, calculated on a fully diluted basis taking into effect the exercise
thereof; (ii) the Take-Out Securities will contain such other terms, conditions
and covenants (including the terms and conditions of the issuance and sale of
the Take-Out Securities) as are customary for similar high-yield financings and
as are satisfactory in all respects to the Take-Out Banks; (iii) such debt
securities shall have a final maturity not earlier than the eighth anniversary
after consummation of the Enertel Acquisition; (iv) such debt securities shall
constitute general unsecured obligations of the Parent; and (v) all other
arrangements with respect to such securities shall be reasonably satisfactory in
all respects to the Take-Out Banks in light of the then prevailing market
conditions. In the event that, at any time prior to the issuance of the Take-
Out Securities, the Term Loan or the Parent's other unsecured senior secured
long-term debt obligations (which obligations do not have the benefit of any
credit support by any Person other than the Parent, the Company or any of their
Subsidiaries), have not received a rating of higher than CCC+ by S&P and Caa by
▇▇▇▇▇'▇, then the interest rate set forth in subclause (i) above for the Take-
Out Securities shall be increased by 1.50%.
If the Parent or the Company receives offers to purchase Take-Out Securities on
the terms set forth in this Section 2.15, the Parent and the Company agree that
such terms shall be acceptable, acknowledge that the Parent and the Company are
required to issue such Take-Out Securities and agree to use the proceeds
therefrom for the repayment of the Term Loan.
ARTICLE III
CONDITIONS
Section 3.1. Conditions Precedent to the Term Loans.The obligation of each
Lender to fund the Term Loan on the Closing Date is subject to the satisfaction
or waiver, on or before the Closing Date, of the following conditions precedent:
(a) Finance Documents. The Administrative Agent shall have received each of
the Finance Documents, each duly executed by the Parent, the Company and such
Subsidiary, as applicable and the Lenders.
(b) Notes. The Administrative Agent shall have received an appropriately
completed and duly executed Note payable to the order of each Lender.
(c) Compliance. The Lenders shall be reasonably satisfied that the Company has
complied with, and will continue to comply with, all Requirements of Law in
connection with their respective execution, delivery and performance of the
Finance Documents and the transactions contemplated thereby and the consummation
of the Enertel Acquisition.
(d) No Litigation or Other Proceeding. As of the Closing Date, (x) no action,
suit, litigation, proceeding investigation, inquiry or dispute by or before any
court, Governmental Authority or any arbitrator shall be pending against or
affecting (i) the Parent, the Company or any of their Subsidiaries or the
Enertel Acquisition or threatened against or affecting the Parent, the Company
or any of their Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or (ii) the Finance Documents or any of the transactions
contemplated thereby and (y) there shall not have been any Requirement of Law or
injunction applicable to the Enertel Acquisition or the Finance Documents or any
of the transactions contemplated thereby which have been enacted, promulgated,
entered or enforced by any Governmental Authority, nor shall there be pending
any action or proceeding before any such Governmental Authority which is
reasonably likely to, in each case, prohibit, restrict, delay or otherwise
materially affect the Enertel Acquisition.
(e) Termination of Existing Liens. The Administrative Agent shall have
received all UCC-3 termination statements and all other agreements and
instruments reasonably requested by the Administrative Agent to terminate all
Liens on assets of the Parent, the Company and their Subsidiaries other than
Permitted Liens.
(f) Equity Documents. The Administrative Agent shall have received certified
copies of all shareholder agreements, registration rights agreements and all
other agreements and documents relating to the stock and capital structure of
the Parent, the Company and their Subsidiaries to which the Parent, the Company
and their Subsidiaries are a party as specified by the Administrative Agent.
(g) Approvals. The Administrative Agent shall have received evidence that all
consents and filings necessary for any of the transactions contemplated by the
Finance Documents and their validity and/or enforceability have been obtained or
made and are in full force and effect (including, without limitation, all third
party consents which the Collateral Agent requires to the creating of any
Security Interest contained in the Security Agreement granted by any Loan Party.
(h) Corporate Documents. (x) The Administrative Agent shall have received (i)
a copy of the certificate or articles of incorporation or articles of
association, as applicable, including all amendments thereto (or the equivalent
thereof), of each Loan Party, certified as of a recent date by the Secretary of
State of the state of its organization, and a certificate as to the good
standing of each Loan Party as of a recent date, from such Secretary of State;
(ii) a certificate of the Secretary or Assistant Secretary of each Loan Party
dated the Closing Date and certifying (A) that attached thereto is a true and
complete copy of the by-laws of such Loan Party as in effect on the Closing Date
and at all times since a date prior to the date of the resolutions described in
clause (B) below, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Loan Party
authorizing the execution, delivery and performance of the Finance Documents to
which such Person is a party and, in the case of the Company, the borrowings
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the certificate or articles
of incorporation of such Loan Party have not been amended since the date of the
last amendment thereto shown on the certificate of good standing furnished
pursuant to clause (i) above, and (D) as to the incumbency and specimen
signature of each officer executing any Finance Document or any other document
delivered in connection herewith on behalf of such Loan Party; (iii) a
certificate of another officer as to the incumbency and specimen signature of
the Secretary or Assistant Secretary executing the certificate pursuant to (ii)
above; and (iv) such other documents as the Lenders or the Administrative Agent
may reasonably request.
(y) The Articles of Enertel shall have been amended to permit the pledge of its
shares of stock, which amendment shall have received all requisite Governmental
Approvals and which amendment shall be in full force and effect.
(i) Officer's Certificate. The Administrative Agent shall have received a
certificate, dated the Closing Date and signed by a Financial Officer of the
Company, confirming compliance with the conditions precedent set forth in
paragraphs (aa) and (bb) of Section 3.1 as of the Closing Date.
(j) Fees and Expenses. The Administrative Agent shall have received all Fees
and other amounts due and payable on or prior to such Closing Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Company hereunder or under any other
Finance Document.
(k) Pledge Agreements. The Pledge Agreement and the Dutch Pledge Agreement
shall have been duly executed by the parties thereto and delivered to the
Collateral Agent and shall be in full force and effect, and all of the
Intercompany Notes and the outstanding capital stock of the Domestic
Subsidiaries, the Dutch Holding Company and Enertel shall have been duly and
validly pledged thereunder to the Collateral Agent for the ratable benefit of
the Lenders and certificates representing such shares, accompanied by
instruments of transfer and stock and note powers endorsed in blank, shall be in
the actual possession of the Collateral Agent.
(l) Security Agreement. The Security Agreement shall have been duly executed
by the Loan Parties party thereto and shall have been delivered to the
Collateral Agent and shall be in full force and effect on such date and each
document (including each Uniform Commercial Code financing statement) required
by law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Collateral Agent for
the benefit of the Lenders a valid, legal and perfected first-priority security
interest in and lien on the Collateral (subject to any Lien expressly permitted
by Section 6.2) described in such agreement shall have been delivered to the
Collateral Agent.
(m) Lien Searches. The Collateral Agent shall have received the results of a
search of the Uniform Commercial Code filings (or equivalent filings) made with
respect to the Loan Parties in the states (or other jurisdictions) in which the
chief executive office of each such Person is located, any offices of such
Persons in which records have been kept relating to accounts receivable and the
other jurisdictions in which Uniform Commercial Code filings (or equivalent
filings) are to be made pursuant to the preceding paragraph, together with
copies of the financing statements (or similar documents) disclosed by such
search, and accompanied by evidence satisfactory to the Collateral Agent that
the Liens indicated in any such financing statement (or similar document) would
be permitted under Section 6.2 or have been released.
(n) Perfection Certificate. The Collateral Agent shall have received a
Perfection Certificate with respect to the Loan Parties dated the Closing Date
and duly executed by a Responsible Officer of the Parent and the Company.
(o) Warrant Agreement. The Warrant Agreement shall have been duly executed by
the parties thereto and delivered to the Administrative Agent, and the Warrants
(as defined therein) shall have been duly executed by the Parent and delivered
into escrow in accordance with the terms thereof.
(p) Guarantee Agreements. The Guarantee Agreement, the Parent Guaranty and the
Enertel Guaranty shall have been duly executed by the parties thereto and
delivered to the Administrative Agent.
(q) Engagement. The Company shall have engaged one or more investment banks
(collectively, the "Take-Out Banks") reasonably satisfactory to the
Administrative Agent to publicly sell or privately place the Take-Out Securities
and shall have commenced the preparation of an offering memorandum in
consultation with such investment banks, relating to the issuance thereof. Such
engagement shall have been definitively documents in terms and conditions
satisfactory to the Administrative Agent; such documentation shall be in full
force and effect and the parties thereto shall be in compliance with all
material agreements thereunder.
(r) Payment of Overdue Amounts. All outstanding amounts due under previous
acquisition agreements (including, without limitation, amounts owed to Bahman
Zolfagharpour ("Bahman") by Parent under the Sale and Transfer of Shares dated
February 13, 1998, between Bahman and Parent) or in connection with any other
acquisition by any member of the Group shall, concurrently with the making of
the Term Loan, have been paid or such member of the Group shall otherwise
obtained appropriate waivers, in form and substance satisfactory to the
Administrative Agent, with respect to such payments. No default under or in
connection with any prior acquisitions shall be continuing.
(s) Legal Opinions. The Administrative Agent shall have received:
(II) a favorable opinion of ▇▇▇▇▇▇▇▇▇, Will & ▇▇▇▇▇, special New York and U.S.
counsel to the Parent and the Company, in a form which shall be mutually agreed
upon;
(III) a favorable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, special Netherlands counsel to
the Parent and the Company, in a form which shall be mutually agreed upon; and
(iii) opinions of local Georgia and Nebraska counsel covering matters relating
to perfection of the liens under the relevant Security Documents and other
matters reasonably requested by the Administrative Agent, in a form which shall
be mutually agreed upon.
(t) CT Corporation. The Administrative Agent shall have received evidence
reasonably satisfactory to it that CT Corporation System has accepted the
appointment of agency for the Company pursuant to this Agreement and the other
Finance Documents for a term ending one year after the Maturity Date.
(u) Operating Licenses. The Administrative Agent shall have received a
certified copy of all Operating Licenses.
(v) Insurance Arrangements. The Administrative Agent shall have received
evidence from the Parent's and Company's insurance brokers of all other
insurance coverage for the Company and their Subsidiaries which is in full force
and effect on such Closing Date.
(w) Subsidiary Shares The Administrative Agent shall have received all shares
of stock and all certificates of title in each Loan Party's shareholding in the
collateral pledged under the Pledge Agreement and Dutch Pledge Agreement and
stock transfer forms in respect of the same executed in blank on behalf of such
Loan Party, as the case may be (except for the number and class of shares and
the name of the transferor) and left undated.
(x) No Adverse Change or Development, Etc. (i) Nothing shall have occurred
since December 31, 1997 and since the Effective Date, the Lenders shall have
become aware of no facts or conditions not otherwise known to the Lenders on the
Effective Date, which could reasonably be expected to have a Material Adverse
Effect; (ii) trading in securities generally on the New York or American Stock
Exchange shall not have been suspended and minimum or maximum prices shall not
have been established on any such exchange; (iii) a banking moratorium shall not
have been declared by New York or United States authorities; (iv) there shall
not have been (A) an outbreak or escalation of hostilities between the United
States and any foreign power or (B) an outbreak or escalation of any other
insurrection or armed conflict involving the United States or any other national
or international calamity or emergency, or (C) any material change in the
financial markets of the United States which, in each case, in the reasonable
judgment of the Lenders would materially and adversely affect the ability of the
Lenders to syndicate the Term Loan or makes it impracticable or inadvisable to
proceed with the consummation of the Enertel Acquisition or the Term Loan or any
of the other transactions contemplated hereby.
(y) Indebtedness. The Parent, the Company and their Subsidiaries shall have no
outstanding Indebtedness other than the Indebtedness listed on Schedule 3.1(y),
which Schedule shall have been delivered prior to the Closing Date and shall be
in form and substance satisfactory to the Lenders in all respects. All
Indebtedness owing by Enertel pursuant to that certain Loan Agreement, dated May
11, 1998 by Enertel to ABN Amro Bank N.V. (the "ABN Amro Debt") shall,
concurrently with the making of the Terms Loan, be repaid in full and such Loan
Agreement shall be terminated. All outstanding indebtedness by Enertel to the
Enertel Shareholders (the "Existing Shareholder Debt") shall, concurrently with
the making of the Term Loan, be repaid or canceled (or such other arrangements
shall have been made for dealing with such indebtedness which are satisfactory
to the Administrative Agent).
(z) Representations and Warranties. The representations and warranties of the
Loan Parties contained in any Finance Document shall be true and correct on such
date both before and after giving effect to the making of such Term Loan on the
Closing Date.
(aa) No Default or Event of Default. No Default or Event of Default shall have
occurred and be continuing either before or after giving effect to the making of
such Term Loan on the Closing Date.
(bb) Due Diligence Report. The Lenders shall have received a final copy of a
due diligence report, in form and substance satisfactory to the Lenders, from
▇▇▇▇▇ & ▇▇▇▇▇▇▇ covering Enertel, and the Administrative Agent, the Collateral
Agent and the Lenders shall be expressly entitled to rely thereon.
(cc) Notice of Loan. The Administrative Agent shall have received an executed
Notice of Loan in respect of the Term Loan, which Notice of Loan shall contain
the certifications of a Responsible Officer of the Company specified in Exhibit
B, each of which shall be deemed made as of the date of such Notice of Loan and
as of the date on which the Term Loan is to be made.
(dd) Consummation of Acquisition. As of the Closing Date, the Enertel
Acquisition shall have been consummated in accordance with the terms and
conditions of the Acquisition Documents and all applicable laws. All applicable
waiting periods with respect thereto have or, prior to the time when required,
will have, expired without, in all such cases, any action being taken by any
competent authority which restrains, prevents, or imposes material adverse
conditions upon the consummation of the Enertel Acquisition. As of such Closing
Date, there does not exist any judgment, order, or injunction prohibiting the
consummation of the Enertel Acquisition, or the making of the Term Loan or the
performance by any Loan Party of its respective obligations under the
Transaction Documents. Except for changes which are reasonably acceptable to
the Administrative Agent and the Majority Lenders, the Acquisition Agreement
(and all exhibits and schedules thereto) shall be in the form delivered to the
Administrative Agent and the Lenders prior to the Effective Date. The
Acquisition Documents (and the transactions contemplated thereby) shall have
been duly approved by the boards of directors and, if required by applicable
law, the stockholders of the parties thereto, and all Acquisition Documents
shall have been duly executed and delivered by the parties thereto and shall be
in full force and effect. Each of the conditions precedent to the obligation of
the parties to consummate the Enertel Acquisition as set forth in the respective
Acquisition Agreement shall have been satisfied to the satisfaction of the
Administrative Agent and the Majority Lenders, or waived with the consent of the
Administrative Agent and the Majority Lenders and the Enertel Acquisition shall
have been consummated in accordance with the Acquisition Documents (without
giving effect to any amendment or modification of the respective Acquisition
Agreement or waiver with respect thereto unless consented to by the
Administrative Agent and the Majority Lenders) and all applicable laws, rules
and regulations.
(ee) Solvency. On the Closing Date, the Company shall have delivered to the
Administrative Agent a solvency certificate in form and substance satisfactory
to the Administrative Agent, addressed to the Administrative Agent and each of
the Banks and dated the Closing Date, from the chief executive officer or chief
financial officer of the Company.
(ff) Approvals. All necessary governmental (domestic and foreign), regulatory
and third party approvals and/or consents in connection with the Transactions
and the other transactions contemplated by this Agreement and the other
Transaction Documents and otherwise referred to herein or therein shall have
been obtained and remain in effect, and all applicable waiting periods shall
have expired without any action being taken by any competent authority which
restrains or prevents such transactions or imposes, in the reasonable judgment
of the Majority Lenders or the Administrative Agent, materially adverse
conditions upon the consummation of such transactions. Any applicable law
regulating the Acquisitions shall have been complied with or shall have been
reasonably determined by the Administrative Agent and the Majority Lenders to be
invalid or inapplicable to the Enertel Acquisition.
(gg) Corporate, Capital, Ownership Structure.
(i)All of the outstanding shares of capital stock of the Dutch Holding Company
shall have been contributed to the Company by the Parent as a capital
contribution and evidence thereof shall have been given to the Administrative
Agent in form and substance satisfactory to the Administrative Agent.
(ii)On the Closing Date (after giving effect to the Enertel Acquisition to be
funded on such date) the corporate, capital and ownership structure (including,
without limitation, the terms of any capital stock, options, warrants or other
securities issued or to be issued by the Parent or the Company on the Closing
Date and all agreements and organizational documents related thereto) and
management of the Parent, the Company and their Subsidiaries shall be reasonably
satisfactory to the Administrative Agent and the Majority Lenders.
(hh) Minority Shareholder Agreement. The Lenders shall have received an
executed copy of the Minority Shareholder Agreement. Such agreement or other
contractual arrangement shall not contain any term or provision pursuant to
which the rights and remedies of the Administrative Agent, the Collateral Agent
and/or the Lenders could be adversely affected in any manner and such agreement
or contractual arrangement shall otherwise be in form and substance satisfactory
to the Lenders.
(ii) Equity Investment. Global Crossing's Board of Directors shall have
approved a capital contribution to the Parent in an aggregate amount of not less
than $20 million, of which an amount not less than $10 million shall be in the
form of cash and the remainder shall be in the form of assets acceptable to the
Lenders. The Administrative Agent shall have received a letter of intent, or
other writings evidencing such approval and intent to make such capital
contribution, in each case in form and substance satisfactory to the
Administrative Agent.
(jj)III Financial Information. The Administrative Agent shall have received:
(IV) the management accounts of the Parent and the Group for the period
commencing December 31, 1997 and ending March 31, 1998 including a profit and
loss account, balance sheet and cashflow statement; and
(V) the Projections.
(kk)V No Litigation or Other Proceeding. No action, suit, litigation,
proceeding investigation, inquiry or dispute by or before any court,
Governmental Authority or any arbitrator shall be pending against or affecting
the Parent, the Company or any of their Subsidiaries or threatened against or
affecting the Parent, the Company or any of their Subsidiaries which could
reasonably be expected to have a Material Adverse Effect.
(ll) Delivery of Schedules. All Schedules referenced to in this Agreement
which have not been delivered or attached hereto on the Effective Date shall
have been delivered to the Administrative Agent and the Lenders, and shall, in
each case, be in form and substance satisfactory to the Administrative Agent
and Lenders in all respects.
Section 3.2. Conditions Precedent: General Principles.(A) Effect of Receipt
of Proceeds. The acceptance of the proceeds of the Term Loan shall constitute a
representation and warranty by the Company to each of the Lenders that all of
the applicable conditions required to be satisfied under this Article 3 in
connection with the making of such Loan have been satisfied.
(B) Copies for all Lenders. All of the agreements, instruments, reports,
opinions and other documents and papers referred to in this Article 3, unless
otherwise expressly specified, shall be delivered to the Administrative Agent
for the account of each of the Lenders and, except for the Notes, in sufficient
counterparts for each of the Lenders, without cost to the Administrative Agent
or any Lender and shall be reasonably satisfactory in form and substance to each
Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties.The Parent and the Company hereby
represent and warrant to the Administrative Agent and the Lenders that each of
the statements set forth below are as of Closing Date are true, correct and
complete:
(A) Due Incorporation, Etc. The Parent, the Company and each of its
Subsidiaries is duly incorporated and validly existing under the laws of its
jurisdiction of incorporation and has all requisite corporate power and
authority to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted. The Parent, the
Company and each of its Subsidiaries is duly qualified or licensed to do
business as a foreign corporation in good standing in all jurisdictions in which
it owns or leases property or proposes to own or lease property or in which the
conduct of its business requires it to so qualify or be licensed, except, in
each case, for such jurisdictions where the failure to so qualify or be licensed
would not have a Material Adverse Effect.
(B) Authority. All actions, conditions and things required to be taken,
fulfilled and done by each Loan Party in order: (VI) to enable it to enter into,
exercise its rights and perform and comply with its obligations under the
Finance Documents; and (VII) to ensure that those obligations are valid, legally
binding and enforceable; and (VIII) to create the security constituted by the
Security Documents to which it is party and to ensure that such security has the
ranking specified therein as of the Closing Date shall, in each case, have been
taken, fulfilled and completed.
(C) Consents. On the Closing Date, all consents and filings required for each
Loan Party's entry into, exercise of its rights under and performance of its
obligations under each of the Finance Documents to which it is party shall have
been obtained by the Company and each other Loan Party.
(D) Non-Conflict. The execution, delivery and performance by each Loan Party
under each of the Finance Documents to which it is party does not and will not:
(IX) contravene any law, directive, judgment or order to which any Loan Party is
subject; (X) contravene its memorandum or articles of association or other
constitutional documents; (XI) breach any agreement or the terms of any contract
or document to which any Loan Party or any of their Subsidiaries is a party or
which is binding upon it or any of its Subsidiaries or any of its or their
assets; or (XII) oblige any Loan Party or any of their Subsidiaries to create
any security or result in the creation of any security over its or their assets
other than under the Security Documents.
(E) Obligations Binding and Validity of Finance Documents. Each Finance
Document and other Transaction Document, when duly executed and delivered, will
constitute the legal, valid and binding obligation of each Loan Party which is a
party thereto, enforceable against each such Loan Party in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect affecting
the enforcement of creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in equity or
at law).
(F) Winding-up. No administrator, receiver, administrative receiver,
liquidator or similar officer has been appointed with respect to it or any of
its Subsidiaries or its or any of their assets nor is any petition or proceeding
for any such appointment pending nor has any resolution for any such appointment
been passed.
(G) No Defaults. No Default or Event of Default has occurred and is
continuing.
(H) Litigation. No litigation, arbitration, administrative, regulatory or
similar proceeding is current or, to its knowledge, pending or threatened which
has or is reasonably likely to have by itself or together with any other such
proceedings a Material Adverse Effect.
(i) Consents and Filings for Business Operations.
(XIII) All consents and filings have been obtained or effected which are
necessary for the carrying on of the Business and all such consents and filings
are in full force and effect except to the extent that absence of any such
consent or filing does not and is not reasonably likely to have a Material
Adverse Effect;
(XIV) each Operating License is valid and subsisting, and so far as the Company
is aware there has been no act or omission which could give rise to the
enforcement, revocation, amendment, suspension, withdrawal or avoidance of any
Operating License or any of the terms or conditions thereof;
(XV) the Company has no material licenses, other than the Operating Licenses,
which are necessary for the carrying on of the Business.
(j) Government or Regulatory Authority Inquiry. Neither the Parent, the
Company nor any of their Subsidiaries has received any notice or communication
which has not been disclosed to the Administrative Agent on or prior to the date
hereof from, and is not aware of, any inquiry, investigation or proceeding on
the part of any Governmental Authority, which inquiry, investigation or
proceedings is reasonably likely, if adversely determined, to have a Material
Adverse Effect.
(I) Material Contracts. Neither the Parent, the Company nor any of their
Subsidiaries is in breach of any provision of or in default under any Material
Contract where such breach or default has or is reasonably likely to have a
Material Adverse Effect and no party has terminated or is entitled to terminate
(on the basis of any breach of or default under any Material Contract) any
Material Contract, the termination of which would be reasonably likely to have a
Material Adverse Effect.
(J) Accounts.
(XVI) The Parent's most recent audited financial statements (together with the
notes thereto) (aa) fairly present its financial position or in the case of
consolidated financial statements the financial position of it and its
Subsidiaries as at the date to which they were prepared and for the financial
year then ended; and (bb) were prepared in accordance with GAAP;
(XVII) Its monthly and quarterly accounts delivered under Section 3.1(b) or, as
the case may be, most recently delivered pursuant to Section 5.15(d) (aa) fairly
represent the financial position of it or, in the case of consolidated accounts,
it and its Subsidiaries as at the date to which they were prepared and for the
month or quarter then ended; (bb) disclose all material liabilities (contingent
or otherwise) required to be reflected therein in accordance with GAAP of it or,
in the case of consolidated financial statements, it and its Subsidiaries as at
that date; (cc) were prepared in accordance with GAAP.
(K) Due Diligence Report. As of the Effective Date:
(i) So far as it is aware, after due and careful review and inquiry, the Due
Diligence Report is not misleading in any materials respect and there is no
expression of the opinion and no performance analysis contained therein or
conclusion reached therein in relation to any material matter which is not fair
and reasonable in all material respects.
(ii) To the best of its knowledge and belief, all material factual information
furnished to ▇▇▇▇▇ & ▇▇▇▇▇▇▇, the Parent and the Company or any of their
Subsidiaries and contained or referred to in the Due Diligence Report was due in
all materials respects at the time supplied and all opinions and performance
analysis supplied to such firm and contained or referred to in the Due Diligence
Report were arrived at after careful consideration, were fair and were based on
reasonable grounds.
(iii) Nothing has occurred or come to light since the date of the Due Diligence
Report which renders any material facts contained in the Due Diligence Report
inaccurate or misleading as of its date or which makes any of the opinions or
performance analysis contained in the Due Diligence Report other than fair and
reasonable.
(L) Group Structure. The information set out in Schedule 4.1(o) accurately
records the structure of the Group and includes details of any minority
shareholdings in any member of the Group held by any person who is not a member
of the Group and details of all companies, joint ventures and partnerships in
which any member of the Group has an interest or participation.
(M) Intellectual Property.
(XVIII) The Intellectual Property which is material to the Parent, the Company
and their Subsidiaries is beneficially owned by or licensed to a member of the
Group free from any Security Interests, restrictions on use and (in the case of
know how, trades secrets or confidential information) any disclosure obligation
and will not be adversely affected by the transactions contemplated by the
Finance Documents;
(XIX) The Intellectual Property which is material to the Parent, the Company
and their Subsidiaries is, to the best of the Parent's knowledge and belief,
exercisable and enforceable and all steps have been taken to protect and
maintain such Intellectual Property, including paying renewal fees, where
appropriate;
(XX) so far as the Parent and the Company are aware, none of the Intellectual
Property Rights comprised in the Intellectual Property which exists at the date
of this Agreement is or is likely to infringe any Intellectual Property Rights
of any third party which will have a material adverse effect on the conduct of
the Business, nor is the Parent or the Company aware of any unresolved
assertions or actions asserting that the Parent or the Company has infringed any
Intellectual Property Rights of any third party;
(XXI) so far as the Parent and the Company are aware no third party is
infringing or misusing or threatening to infringe or misuse any of the
Intellectual Property which exists at the date of this Agreement;
(XXII) where the Intellectual Property which exists at the date of this
Agreement is the subject of any right, permission to use or license granted to
or by any member of the Group, such right, permission or license has not been
breached in any material respect or terminated by any party and no such breach
or termination has been threatened.
(N) Environmental Warranties.
(XXIII) The Parent, the Company and each other member of the Group is, and has
at all times been, in compliance with all Environmental Laws and all
Environmental Approvals necessary in connection with the ownership and operation
of the Business and their respective Properties are in full force and effect
except to the extent that in any such case non-compliance does not have and is
not reasonably likely to have a Material Adverse Effect.
(XXIV) There are no circumstances which may reasonably be expected to prevent
or interfere with it and each of its Subsidiaries being in full compliance with
any Environmental Law including obtaining or being in full compliance with any
Environmental Approvals in the future and no material investment is necessary to
obtain or renew any Environmental Approval except to the extent that in any such
case non-compliance does not have and is not reasonably likely to have a
Material Adverse Effect.
(XXV) There are no past or present acts, omissions, events, state of facts or
circumstances which have resulted in (or could result in) any third party
(including a regulatory authority) taking any action or making any claim against
it or any of its Subsidiaries under any Environmental Laws including Remedial
Action (in particular in relation to contaminated land) or the revocation,
suspension, variation or non-renewal of any Environmental Approval and neither
it nor any of its Subsidiaries has received written notice of any complaints,
demands, civil claims, enforcement proceedings or of any action required by any
regulatory authority nor of any investigations pending or threatened in relation
to the failure of it or any of its Subsidiaries to obtain any Environmental
Approval or comply with Environmental Law in any such case which has or is
reasonably likely to have a Material Adverse Effect.
(O) Good Title to Properties. Each of the Parent, the Company and their
Subsidiaries will have good and marketable title to, or valid leasehold or
license interests in, their respective Properties, free and clear of all
Security Interests other than Permitted Liens. The Properties of the Company
and each of its Subsidiaries are in good repair (reasonable wear and tear
excepted), adequately insured and suitable for their respective uses.
(P) Indebtedness. As of the Closing Date and immediately after giving effect
to the Loans and the application of the proceeds thereof in accordance with
Section 2.10, neither the Parent, the Company nor any of their Subsidiaries will
have any Indebtedness, other than Indebtedness expressly permitted under Section
6.9.
(Q) Use of Proceeds. All proceeds of the Loans will be used by the Company
solely for the purposes set forth in Section 2.10.
(R) Government Regulation.
(XXVI) Margin Stock. Neither the Parent, the Company nor any of their
Subsidiaries is engaged or proposes to engage in the business of extending
credit for the purpose of purchasing or carrying margin stock within the meaning
of Regulations T, U and X issued by the Board of Governors of the Federal
Reserve System from time to time and all official rulings and interpretations
thereunder or thereof (the "Margin Regulations"); and no part of the proceeds of
the Term Loan will be used directly or indirectly to purchase or convey margin
stock within the meaning of the Margin Regulations or used for any other purpose
which entails a violation of, or which is inconsistent with, the provisions of
the Margin Regulations.
(XXVII) Investment Company Act. Neither the Parent, the Company nor any of
their Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each of such terms is defined or used in the Investment
Company Act of 1940, as amended).
(XXVIII) Other Regulations. Neither the Parent, the Company nor any of their
Subsidiaries (A) is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," within the meaning of the Public Utility Holding Company
Act of 1935, as amended, (B) is subject to regulation under the Federal Power
Act or the Interstate Commerce Act or (C) is subject to any other statute or
regulation which regulates the incurrence of indebtedness for borrowed money,
other than Federal and state securities laws.
(S) Taxes.
(I) Each of the Parent, the Company and their Subsidiaries has filed all tax
returns (domestic and foreign) required to be filed by it and has paid all
taxes, assessments, fees and other charges (including interest and penalties)
due with respect to the years covered by such returns, except for any such
failures to file or to pay such amounts which, in the aggregate, would not have
a Material Adverse Effect and which are being contested in good faith and by
proper proceedings if the relevant company has maintained adequate reserves with
respect thereto in accordance with GAAP.
(II) No claims are being or are reasonably likely to be asserted against the
Parent, the Company or any of their Subsidiaries with respect to taxes which are
reasonably likely to be determined adversely to the Parent, the Company or to
such subsidiary and which, if so adversely determined, would have or be
reasonably likely to have a Material Adverse Effect.
(T) Disclosure. All written information which has been made available to the
Administrative Agent or the Lenders by the Parent, the Company or any of their
Subsidiaries or any of their representatives in connection with the Finance
Documents or the transactions contemplated hereby or thereby, to the best of the
Company's knowledge, was, or has been subsequently supplemented (including by
the Schedules attached hereto) so as to be, complete and correct in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such
statements were made. The Projections have been prepared in good faith based
upon reasonable assumptions stated therein (it being understood that the
Projections are subject to significant uncertainties and contingencies, many of
which are beyond the control of the Company and that no assurance can be given
that such Projections will be realized), which assumptions were reasonable in
light of conditions existing at the time of delivery of such Projections. No
fact is known to the Parent, the Company or any of their Subsidiaries or any
officer of the Parent, the Company or any of their Subsidiaries, which could or
might have a Material Adverse Effect.
(U) Pledged Shares. Each Loan Party has good title to the shares of each of
its respective Subsidiaries, and, such shares shall be free and clear of all
Security Interests, other than as created by the Security Documents.
(y) Ranking of Indebtedness. The obligations of the Parent and Company for the
payment of principal, interest and other amounts under this Agreement and the
Finance Documents rank senior to all other Indebtedness of the Parent, the
Company and their Subsidiaries other than Permitted Financings.
(z) Employee Benefit Plans. Each of the Parent, the Company and their ERISA
Affiliates is in compliance in all material respects with the applicable
provisions of ERISA and the Code and the regulations and published
interpretations thereunder. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in material liability of the Company or
any of its ERISA Affiliates. Based upon the latest valuation of each Plan
(which in each case occurred within twelve months prior to the date of this
representation) and on the actuarial methods and assumptions employed for that
valuation, the aggregate benefit liabilities under all such Plans (based on
those assumptions used to fund such Plan) did not, as of the last annual
valuation date applicable thereto, exceed the aggregate value of the assets of
such Plan, disregarding, for this purpose, the benefit liabilities and assets of
any Plan with assets in excess of liabilities.
(aa) Security Documents.
(i)Each of the Pledge Agreement and the Dutch Pledge Agreement is effective to
create in favor of the Collateral Agent, for the ratable benefit of the Lenders,
a legal, valid and enforceable security interest in the Collateral (as defined
in the Pledge Agreement and the Dutch Pledge Agreement, as the case may be) and,
when the Collateral is delivered to the Collateral Agent or, with respect to
such Collateral consisting of uncertificated securities, the appropriate notices
on the records of the relevant entity is noted, the Pledge Agreement and the
Dutch Pledge Agreement, as the case may be, shall constitute a fully perfected
first priority Lien on, and security interest in, all right, title and interest
of the pledgor thereunder in such Collateral, in each case prior and superior in
right to any other Person.
(ii)The Security Agreement is effective to create in favor of the Collateral
Agent, for the ratable benefit of the Lenders, a legal, valid and enforceable
security interest in the Collateral (as defined in the Security Agreement) and,
when financing statements in appropriate form are filed in the offices specified
on Schedule 6 to the Perfection Certificate, the Security Agreement shall
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the grantors thereunder in such Collateral, in each case prior
and superior in right to any other Person, other than with respect to Liens
expressly permitted by Section 6.02.
(iii)When the Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office, the Security Agreement
shall constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the grantors thereunder in the Intellectual Property (as
defined in the Security Agreement), in each case prior and superior in right to
any other Person (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the grantors after the date hereof).
(bb) Labor Matters. As of the date hereof and each Closing Date, there are no
strikes, lockouts or slowdowns against the Parent, the Company or any of their
Subsidiaries pending or, to the knowledge of the Company, threatened. The hours
worked by and payments made to employees of the Parent, the Company and their
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable federal, state, local or foreign law dealing with such matters.
All payments due from the Company or any Subsidiary, or for which any claim may
be made against the Parent, the Company or any of their Subsidiaries, on account
of wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of the Parent, the Company or such
Subsidiary. The consummation of the Transactions will not give rise to any
right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which the Parent, the Company or any of
their Subsidiaries is bound.
(cc) Solvency. As of the Closing Date and giving effect to the consummation of
the Enertel Acquisition and immediately following the making of the Term Loan
made on the applicable Closing Date and after giving effect to the application
of the proceeds of such Term Loan, (i) the fair value of the assets of each Loan
Party, at a fair valuation, will exceed its debts and liabilities, subordinated,
contingent or otherwise and (ii) the present fair saleable value of the property
of each Loan Party will be greater than the amount that will be required to pay
the probable liability of its debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured.
(dd) Outstanding Shares, Options and Warrants. Schedule 4.1 (dd) hereto sets
forth, as of the Effective Date, a list of all outstanding shares of capital
stock, options and warrants of the Parent, the Company and their Subsidiaries as
of the date hereof. There are no other outstanding instruments convertible or
exchangeable into shares of the Parent's or Company's common stock and neither
the Parent nor the Company nor any of their Subsidiaries have any commitments to
issue to any Person any such instruments or any shares of common stock other
than pursuant to the Warrant Agreement.
(ee) Senior Indenture; etc. Each of the Parent, the Company and the
Guarantors, if any, shall, on the date it executes and delivers the Take-Out
Securities and the indenture governing the Take-Out Securities (or the
guarantees related thereto, as the case may be), have the full corporate power,
authority and capacity to do so and to perform all of its obligations to be
performed thereunder; all corporate and other acts, conditions and things
required to be done and performed or to have occurred prior to such execution
and delivery to constitute them as valid and legally binding obligations of the
Parent, the Company and the Guarantors enforceable against the Parent, the
Company and the Guarantors, as the case may be in accordance with their
respective terms except the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), due compliance with all applicable Laws; on the
date of the Take-Out Securities (and the guarantees) and the indenture governing
the Take-Out Securities, each shall constitute legal, valid, binding and
unconditional obligations of the Parent, the Company and the Guarantors, as the
case may be, enforceable against the Parent, the Company and the Guarantors, as
the case may be, in accordance with their respective terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
(ff) Broker's or Finder's Fees. Other than or set forth in Schedule 4.1(ff),
no broker's or finder's fees or commissions will be payable by the Parent, the
Company or any of their Subsidiaries with respect to the Acquisition or any
transaction contemplated hereby and no similar fees or commissions will be
payable by the Parent, the Company or any of their Subsidiaries for any other
services rendered to the Parent, the Company or any of their Subsidiaries in
connection with the transactions contemplated hereby and thereby. The Parent
and the Company represent, warrant, covenant and agree that they, jointly and
severally, will indemnify the Lenders, the Administrative Agent and the
Collateral Agent against, and hold each of them completely harmless from and
against, any and all claims, demands or liabilities for broker's or finder's
fees or similar fees or commissions asserted to have been incurred in connection
with any of the transactions contemplated hereby.
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1. General.Each of Parent and Company covenants and agrees that, from
and after the Effective Date and for so long as this Agreement is in effect or
any amount is owing under any of the Finance Documents, the Parent and Company
shall and shall cause each of their Subsidiaries, where applicable, to comply
with each of the covenants in this Article 5.
Section 5.2. Authorizations and Consents.The Parent and Company will obtain and
promptly renew from time to time and maintain in full force and effect all
consents and filings, and comply with the terms of all such consents, and
promptly make and renew from time to time all such filings, as may be required
under any applicable law or directive to enable it to enter into, exercise its
rights and perform and comply with its obligations under the Finance Documents
and to ensure that its obligations under the Finance Documents to which it is
party are valid, legally binding and enforceable against the Parent and Company
and each of the Security Documents to which it is party constitute valid
security ranking in accordance with its terms.
Section 5.3. Senior Ranking.The Parent and Company will ensure and will ensure
that each of their Subsidiaries will ensure that each of their respective
payment obligations under each of the Finance Documents rank and will at all
times rank senior to all other Indebtedness of the Parent, the Company and such
Subsidiary other that with respect to Permitted Financing to the extent of the
assets of the Parent, the Company and their Subsidiaries financed thereby.
Section 5.4. Insurances.(A) The Parent and Company will and will ensure that
each of their Subsidiaries will effect and maintain insurances at its own
expense in respect of all its assets and business of an insurable nature with
financially sound and reputable insurers. Such insurances must:
(i) be in such amounts as would in the circumstances be prudent and which is
customary with companies of established repute in the same general area engaged
in the same or similar business (including, without limitation, an entitlement
to receive the full replacement or reinstatement value from time to time of any
assets destroyed or otherwise becoming a total loss);
(ii) be in the joint names of the insured company and the Collateral Agent (or,
to the extent insurance in joint names is not possible as a matter of law or as
a result of an insurer refusing insurance in joint names, with the interest of
the Collateral Agent as mortgagee noted on the policies); and
(iii) provide, if the Collateral Agent is a joint insured, that the insurance
shall not be rendered void, voidable or unenforceable by reason of any non-
disclosure by the Collateral Agent, that the insurer will give not less than 30
days written notice to the Collateral Agent of any intention to avoid such
insurance and that the Collateral Agent shall not in any circumstances be liable
for the relevant premium.
(B) The Parent and Company will and will ensure that each of their Subsidiaries
will:
(I) supply to the Administrative Agent on request copies of each policy for
insurance required to be maintained in accordance with Section 5.4(a) together
with the current premium receipts relating thereto;
(II) promptly notify the Administrative Agent in writing of any material change
to its insurance cover from time to time;
(III) promptly notify the Administrative Agent in writing of any claim under
any of its insurance policies which is for, or is reasonably likely to result in
a claim under such policy for, an amount in excess of $1,000,000.
Section 5.5. Taxes.The Parent and Company will and will ensure that each of
their Subsidiaries will pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon or in
respect of its property or assets, as well as all claims for labor, materials
and supplies or otherwise that, if unpaid, might give rise to a Lien upon such
properties or any part thereof; provided, however, that such payment and
discharge shall not be required with respect to any such obligation, tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings and it shall have
set aside on its books, in accordance with GAAP, adequate reserves with respect
thereto and such contest operates to suspend enforcement of a Lien and there is
no material risk of forfeiture of such property or assets.
Section 5.6. Licenses and Consents.The Parent and Company will and will ensure
that their Subsidiaries will ensure that it has the right and is duly qualified
to conduct the Business and do all things necessary to obtain, preserve and keep
in full force and effect:
(a) each Operating License which it obtains from time to time;
(b) Material Contracts; and
(c) all other material consents which are necessary for the conduct of the
Business.
The Parent and Company will not and will ensure that their Subsidiaries will not
do or omit to do or suffer to be done, any act whereby any person is entitled or
empowered to revoke, amend, suspend, withdraw, or terminate any Operating
License and will not amend or vary or agree to amend or vary any of the material
terms of any such Operating License.
Section 5.7. Regulatory Notices and Communications.The Parent and Company will
promptly notify the Administrative Agent upon receipt by the Parent and Company
of any material notice or communication from any Governmental Authority or the
amendment, suspension, withdrawal or avoidance of the License or any other
Operating License or any of the material terms and conditions thereof.
Section 5.8. Laws and Directives.The Parent and Company will and will ensure
that their Subsidiaries comply in all material respects with all laws and
directives of any agency of any domestic or foreign, federal, state or local
jurisdiction binding upon it or enforceable against it in respect of the conduct
of its business and the ownership of its assets.
Section 5.9. Compliance with Material Contracts.The Parent and Company will and
will ensure that their Subsidiaries will comply with its obligations under each
of the Material Contracts, except where such noncompliance could not reasonably
be expected to result in a Material Adverse Effect, take all action necessary to
ensure the continued validity and enforceability of its rights thereunder and
not terminate any of the Material Contracts prior to their contractual
termination dates without first obtaining the written consent of the
Administrative Agent, such consent not to be unreasonably withheld or delayed.
Section 5.8. Environmental Obligations.The Parent and Company will and will
ensure that each of their Subsidiaries will:
(A) comply in all respects with the terms and conditions of all Environmental
Approvals and all Environmental Laws applicable to it to the extent failure to
do so would have or would be reasonably likely to have a Material Adverse Effect
and for this purpose will implement procedures to monitor compliance and contain
liability under any Environmental Laws;
(B) promptly upon receipt of the same notify the Administrative Agent of any
claim, notice or other communication served on it in respect of, or if it
becomes aware of:
(I) any suspension, revocation or variation of any Environmental Approval
applicable to it (save where such suspension or revocation arises by reason of
and is immediately followed by the issue of an Environmental Approval in
substantially the same terms) which suspension, revocation or variation has or
is reasonably likely to have a Material Adverse Effect; or
(II) any breach of any Environmental Laws which has or is reasonably likely to
have a Material Adverse Effect; or
(III) any material investment by any member of the Group required to maintain,
acquire or renew any Environmental Approval; or
(IV) the issue of any enforcement or prohibition or similar notice by a
regulatory authority or receipt by any member of the Group of any complaint,
demand, civil claim or enforcement proceeding which has or is reasonably likely
to have a Material Adverse Effect;
(C) use all reasonable endeavors (by employing the best available techniques
not involving excessive cost) to prevent any acts, omissions, events, state of
facts or circumstances occurring or being exacerbated which could result in any
third party taking any action or making any claim against any member of the
Group under any Environmental Laws which action or claim if brought is
reasonably likely to have a Material Adverse Effect.
Section 5.11. Intellectual Property.The Parent and Company will and will ensure
that each of their Subsidiaries will:
(A) observe and comply with all material obligations and laws to which it in
its capacity as registered proprietor, applicant for, beneficial owner, user,
licensor or licensee of the Intellectual Property or any part thereof is
subject, except where such noncompliance could not reasonably be expected to
result in a Material Adverse Effect;
(B) do all acts as are necessary and commercially reasonable to maintain,
protect and safeguard the Intellectual Property required for the Business and
not discontinue the use of any of such Intellectual Property if the
discontinuance would materially and adversely affect the value of such
Intellectual Property or the rights of the Parent, the Company and their
Subsidiaries to use it;
(C) duly register in such register(s) or with such authorities as may be
available for the purpose and in such name(s) as may be required by the law of
the place of registration such of the Intellectual Property as is owned by a
member of the Group and all assignments, licenses and mortgages thereof as may
be capable of registration in such place(s);
(D) pay all fees necessary to maintain, protect and safeguard the Intellectual
Property as is owned by a member of the Group and the registrations required to
be made under this Section 5.13 before the latest time provided for payment
thereof and not permit any such registration to be abandoned, canceled or lapsed
or to be liable to any claim of abandonment for non-use or otherwise;
(E) without prejudice to this Section 5.13 take all such reasonable steps,
including the commencement of legal proceedings, as may be necessary to prevent
third parties infringing, safeguard and maintain the validity, reputation,
integrity, registration or subsistence of the Intellectual Property as is owned
by a member of the Group other than such Intellectual Property which is not
material to the Company or any member of the Group;
(F) not assign, sever, dispose of or otherwise part with control of the
Intellectual Property, create or permit to subsist any Security Interest therein
(other than a Security Interest under a Security Document) or grant to any
person any license to use the same or right therein in any manner which would
materially and adversely affect the value of such Intellectual Property; and
(g) as and when reasonably requested by the Administrative Agent, as soon as
reasonably practicable provide the Agent with (a) a written summary of what it
believes to be its material Intellectual Property and (b) details of all
registered and applied for Intellectual Property as is owned by a member of the
Group.
Section 5.12. Information and Reporting Covenants.(A) Events of Default. The
Parent and the Company will notify the Administrative Agent of the occurrence of
any Default or Event of Default within three Business Days after becoming aware
of it and will from time to time on request deliver to the Administrative Agent
a certificate confirming that no Default or Event of Default has occurred or
setting out details of any Default or Event of Default and the action taken or
proposed to be taken to remedy it.
(B) Books of Account. The Parent and the Company will keep, and ensure that
each of its Subsidiaries will keep, proper books of account relating to its
business and will permit the Administrative Agent and the Lenders or any
authorized representative of the Administrative Agent and the Lenders upon
reasonable notice to visit it and each of its Subsidiaries and inspect the same
at the place where such books and the property of the Parent, the Company and
their Subsidiaries are maintained or located.
(c) Financial Statements, Reports, Etc.. The Parent and the Company will
deliver to the Administrative Agent for distribution to the Lenders sufficient
copies for each of the Lenders of the following:
(i) within 90 days after the end of each fiscal year, its consolidated and
consolidating balance sheet and related statements of operations, stockholders
equity and cash flows showing the financial condition of the Parent, the Company
and their consolidated Subsidiaries as of the close of such fiscal year and the
results of its operations and the operations of such Subsidiaries during such
year, all audited by Auditors or other independent public accountants of
recognized national standing acceptable to the Majority Lenders and accompanied
by an opinion of such accountants (which shall not be qualified in any material
respect) to the effect that such consolidated and consolidating financial
statements fairly present the financial condition and results of operations of
the Company and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(ii) within 45 days after the end of each of the first three fiscal quarters of
each fiscal year, its consolidated and consolidating balance sheet and related
statements of operations, stockholders equity and cash flows showing the
financial condition of the Parent, the Company and their consolidated
Subsidiaries as of the close of such fiscal quarter and the results of its
operations and the operations of such Subsidiaries during such fiscal quarter
and the then elapsed portion of the fiscal year, all certified by one of its
Financial Officers as fairly presenting the financial condition and results of
operations of the Parent, the Company and their consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments;
(iii) within 25 days after the end of each of the first two months of each
fiscal quarter of each fiscal year, its consolidated balance sheet and related
statements of operations, stockholders equity and cash flows showing the
financial condition of the Parent, the Company and their consolidated
Subsidiaries as of the close of such month and the results of its operations and
the operations of such Subsidiaries during such month and the then elapsed
portion of the fiscal year, all certified by one of its Financial Officers as
fairly presenting the financial condition and results of operations of the
Company and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit adjustments;
(iv) concurrently with any delivery of financial statements under sub-paragraph
(a) or (b) above, a certificate of the accounting firm or Financial Officer of
the Company opining on or certifying such statements (which certificate, when
furnished by an accounting firm, may be limited to accounting matters and
disclaim responsibility for legal interpretations) certifying that no Event of
Default or Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective action
taken or proposed to be taken with respect thereto;
(v) within 25 days after the end of each fiscal month, a certificate of a
Financial Officer of the Parent, the Company showing the differences between the
operating performance during the preceding fiscal month and the projections for
such month set forth in the Operating Budget;
(vi) promptly after the same become publicly available, copies of all periodic
and other reports, proxy statements and other materials filed by the Parent, the
Company or any of their Subsidiaries with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed to its shareholders (exclusive of proprietary information unless (i)
the Person that is the source of the information or report is a public company
and (ii) such Person would then be required to file such proprietary information
with the Securities and Exchange Commission), as the case may be;
(vii) promptly after entering into the same, copies of all shareholder
agreements, material employment agreements and other material agreements of the
Parent, the Company and their Subsidiaries; and
(viii) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Parent, the Company
or any of their Subsidiaries, or compliance with the terms of any Loan Document,
as the Administrative Agent or any Lender may reasonably request.
(d) Fiscal Year. No alteration may be made to the financial year end of the
Parent or Company without the prior written consent of the Administrative Agent
and the Company shall ensure that the financial year end of each of its
Subsidiaries shall be the same as its own.
(e) Other Information. The Parent and the Company will promptly deliver to the
Administrative Agent for distribution to the Lenders:
(I) details of any litigation, arbitration, administrative or regulatory
proceedings which, if resolved against it or its Subsidiaries, could (whether
itself or together with any related claims) result in the Group suffering a loss
in excess of $1,000,000 or would have or would be reasonably likely to have a
Material Adverse Effect;
(II) at the same time as sent to its shareholders or its creditors any other
document or information sent to any class of its shareholders or creditors; and
(III) such other information relating to its financial condition or operations,
or those of its Subsidiaries, as the Administrative Agent (or any other Lender
through the Administrative Agent) may from time to time reasonably request;
(IV) such information as the Collateral Agent may require regarding its assets
for the purposes of or in connection with the Security Documents;
(V) details of any Intellectual Property Rights which are required to conduct
the Business and which are not owned by or licensed to it and the absence of
which has or is reasonably likely to have a Material Adverse Effect; and
(VI) copies of all financial statements and reports which the Company may make
to or file with the Securities and Exchange Commission or any successor or
analogous Governmental Authority.
Section 5.13. Employee Benefits.The Parent and the Company will:
(a)Comply in all material respects with the applicable provisions of ERISA and
the Code; and
(b)furnish to the Administrative Agent (i) as soon as possible after, and in any
event within 10 days after any Responsible Officer of the Company or any ERISA
Affiliate knows or has reason to know that, any ERISA Event has occurred that,
alone or together with any other ERISA Event could reasonably be expected to
result in liability of the Company in an aggregate amount exceeding $250,000, a
statement of a Financial Officer of the Company setting forth details as to such
ERISA Event and the action, if any, that the Company proposes to take with
respect thereto.
Section 5.14. Further Assurances.The Parent and the Company will, and will
cause each of their Subsidiaries to, execute any and all further documents,
financing statements, agreements and instruments, and take all further action
(including filing Uniform Commercial Code and other financing statements) that
may be required under applicable law, or that the Majority Lenders, the
Administrative Agent or the Collateral Agent may reasonably request, in order to
effectuate the transactions contemplated by the Finance Documents and in order
to grant, preserve, protect and perfect the validity and first priority of the
security interests created or intended to be created by the Security Documents.
The Parent and the Company will cause (a) any subsequently acquired or organized
Domestic Subsidiary to execute a Supplement to the Guarantee Agreement,
substantially in the form of Annex I thereto, and each applicable Security
Document (or supplement thereto) in favor of the Collateral Agent and (b) the
owner of the capital stock of such Subsidiary to pledge such stock pursuant to a
Supplement to the Pledge Agreement, substantially in the form of Annex I
thereto. In addition, from time to time, the Company will, at its cost and
expense, promptly secure its obligations under this Agreement and the other
Finance Documents by pledging or creating, or causing to be pledged or created,
perfected security interests with respect to such of its assets and properties
as the Administrative Agent or the Majority Lenders shall designate (it being
understood that it is the intent of the parties that such obligations be secured
by, among other things, substantially all the assets of the Company (including
properties acquired subsequent to the Effective Date)). Such Security Interests
will be created under the Security Documents and other security agreements and
other instruments and documents in form and substance satisfactory to the
Collateral Agent, and the Company shall deliver or cause to be delivered to the
Lenders all such instruments and documents (including legal opinions, title
insurance policies and lien searches) as the Collateral Agent shall reasonably
request to evidence compliance with this Section. The Parent and the Company
agree to provide such evidence as the Collateral Agent shall reasonably request
as to the perfection and priority status of each such Security Interests.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.1. General.Each of the Parent and the Company covenants and agrees
that, from and after the Effective Date and for so long as this Agreement or any
Commitment is in effect or any amount is owing under any of the Finance
Documents, the Company shall, and shall cause each of its Subsidiaries, where
applicable, to comply with each of the covenants in this Article 6.
Section 6.2. Mergers, Consolidations, Sales of Assets and Acquisition.Without
the prior written consent of the Administrative Agent, the Parent and the
Company will not, and will ensure that none of their Subsidiaries will merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or any substantial part
of its assets (whether now owned or hereafter acquired) or any capital stock of
any Subsidiary, or purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person (each, an "Acquisition"), except that (a) the Company and any Subsidiary
(other than WP) may purchase and sell inventory in the ordinary course of
business, and (b) if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be continuing (i)
any Wholly Owned Subsidiary (other than WP) may merge into the Company in a
transaction in which the Company is the surviving corporation and (ii) any
Wholly Owned Subsidiary (other than WP) may merge into or consolidate with any
other wholly owned Subsidiary (other than WP) in a transaction in which the
surviving entity is a wholly owned Subsidiary and no Person other than the
Company or a wholly owned Subsidiary receives any consideration; (c) the Company
of any of its Subsidiaries (other than WP) may consummate an Acquisition
provided that (i) no Default or Event of Default shall, either before or after
giving effect thereto, have occurred and be continuing and (ii) the aggregate
consideration (in whatever form) for all Acquisitions (other than the Enertel
Acquisition) consummated since the date hereof shall not exceed $2,500,000; (d)
the Minority Shareholders may purchase 20% of the capital stock of the Dutch
Holding Company pursuant to the Minority Shareholder Agreement and otherwise
pursuant to the terms of this Agreement.
Section 6.3. Arm's Length Transactions.The Parent and the Company will not and
will ensure that none of their Subsidiaries will directly or indirectly enter
into any arrangement or transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate on
terms that are less favorable to such Person than those that could be obtained
at the time from Persons who are not Affiliates.
Section 6.4. Restrictions on Dividends, Etc..The Parent and the Company will
not and will ensure that none of their Subsidiaries will be a party to any
contractual or similar arrangement pursuant to which any member of the Group is
prohibited or restricted in any manner from making any payment of dividends,
distributions of income and other amounts, making or repaying loans and advances
or transferring any asset to any other member of the Group or any condition or
requirement is imposed on any such transfer except for any restrictions imposed
under the Finance Documents and other than imposed pursuant to a Permitted
Financing or other Indebtedness permitted pursuant to Section 6.7.
Section 6.5. Liens.The Parent and the Company will not, and will not permit any
of their Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets of any kind (real or personal,
tangible or intangible) of the Parent, the Company or any such Subsidiary
whether now owned or hereafter acquired, or sell any such property or assets
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including sales of accounts receivable or notes with
recourse to the Parent, the Company or any of their Subsidiaries) or assign any
right to receive income, or file or permit the filing of (other than with
respect to Permitted Liens) any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute; provided
that the provisions of this Section 6.5 shall not prevent the creation,
incurrence, assumption or existence of the following (with such Liens described
below being herein referred to as Permitted Liens ):
(a)inchoate Liens for taxes, assessments or governmental charges or levies not
yet due or Liens for taxes, assessments or governmental charges or levies being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Company) have been
established;
(b)Liens in respect of property or assets of the Parent, the Company or any of
their Subsidiaries imposed by law which were incurred in the ordinary course of
business, such as carriers , warehousemen s and mechanics Liens, statutory
landlord s Liens, and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from the
value of such property or assets or materially impair the use thereof in the
operation of the business of the Company or any such Subsidiary or (y) which are
being contested in good faith by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property or asset subject
to such Lien;
(c)Liens created by or pursuant to this Agreement and the other Finance
Documents;
(d)Liens existing on the Effective Date to the extent listed, and the property
subject thereto described, on Schedule 6.5 without giving effect to any
subsequent extensions or renewals thereof;
(e)Liens arising from judgments, decrees or attachments (or securing of appeal
bonds with respect thereto) in circumstances not constituting an Event of
Default under Article VII, so long as no cash or property (other than proceeds
of insurance payable by reason of such judgments, decrees or attachments) is
deposited or delivered to secure any respective judgment or award, or any appeal
bond in respect thereof, the fair market value of which exceeds $250,000;
(f)Liens (other than any Lien imposed by ERISA) incurred or deposits made in the
ordinary course of business in connection with workers compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety bonds (other than appeal
bonds), bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money);
(g)licenses, leases or subleases granted to other Persons not interfering in any
material respect with the business of the Parent, the Company or any of their
Subsidiaries;
(h)easements, rights-of-way, restrictions, minor defects or irregularities in
title and other similar charges or encumbrances not interfering in any material
respect with the ordinary conduct of the business of the Parent, the Company or
any of their Subsidiaries;
(i)Liens arising from precautionary UCC financing statements regarding operating
leases permitted by this Agreement;
(j)any interest or title of a lessor under any lease permitted by this
Agreement;
(k)Liens pursuant to a Permitted Financing; and
(l)other liens not referred to in subclauses (a) - (k) provided such other Liens
do not secure Indebtedness in excess of $500,000 in the aggregate.
Section 6.6. Sale/Leaseback.The Parent and the Company will not and will ensure
that none of their Subsidiaries will enter into any arrangement, direct or
indirect, whereby the Parent, the Company or any of their Subsidiaries shall
sell or transfer any property, real or personal, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property or other property that it intends to use for substantially the same
purpose or purposes as the property sold or transferred.
Section 6.7. Indebtedness.Without the prior written consent of the
Administrative Agent, the Parent and the Company will not and will ensure that
none of their Subsidiaries will incur or agree to incur or permit to subsist any
Indebtedness other than:
(A) Indebtedness arising under the Finance Documents;
(b) Indebtedness of Enertel to the Dutch Holding Company and the Dutch Holding
Company to the Company, in each case evidenced by the respective Intercompany
Notes;
(c) Indebtedness arising under hedging transactions permitted under Section
6.14; and
(d) Indebtedness arising under the Take-Out Securities;
(e) Indebtedness set forth on Schedule 6.7;
(f) Permitted Financing (other than by WP Acquisition);
(g) Indebtedness of the Dutch Holding Company to the Minority Shareholders in
an aggregate principal amount of 31.62 million Dutch Guilders, pursuant to the
Minority Shareholder Agreement, the terms of which shall be satisfactory in all
respects to the Administrative Agent and Majority Lenders;
(h) Indebtedness in respect of intercompany loans made pursuant to Section
6.9(f); and
(i) Indebtedness of the Parent to any of its Domestic Subsidiaries (other than
WP Acquisition and the Company) in respect of intercompany loans made pursuant
to Section 6.9(c);
Section 6.8. Guarantees.The Parent and the Company will not and will ensure
that none of their Subsidiaries will grant or agree to grant or permit to
subsist any guarantee of the obligations of any other person other than
guarantees contained in the Finance Documents, guarantees set forth on Schedule
6.8 hereto and guarantees of Indebtedness permitted under Section 6.7.
Section 6.9. Loans.The Parent and the Company will not and will ensure that
none of their Subsidiaries will make or agree to make or permit to be
outstanding any loans or agree to advance any credit to any Person other than:
(A) normal trade credit (other than to WP Acquisition);
(b) loans and advances by the Company to the Dutch Holding Company, in each
case from the proceeds of the Term Loan for the purpose of paying the purchase
price of the Enertel Acquisition, repaying the Acquired Entity Indebtedness and
for working capital purposes of Enertel, which loans and advances shall be
evidenced by the Intercompany Notes which are pledged and physically delivered
to the Collateral Agent under the Pledge Agreement;
(c) loans and advances by any Domestic Subsidiary of the Parent (other than the
Company and WP Acquisition) to the Parent, and loans and advances by the Parent
to any Domestic Subsidiary of the Parent (other than WP Acquisition), which
loans and advances shall, if requested by the Administrative Agent, be evidenced
by an intercompany note in form and substance satisfactory to the Administrative
Agent and pledged to the Collateral Agent;
(d) payroll, travel and similar advances to cover matters that are expected at
the time of such advances to be treated as expenses in accordance with GAAP;
(e) loans or advances to employees made in the ordinary course of business of
the Company or its Subsidiaries and that do not in the aggregate exceed $500,000
at any time outstanding; and
(f) loans and advances by the Company or its wholly-owned Subsidiaries to the
Parent in an aggregate principal amount not to exceed $3,000,000 outstanding,
which loans and advances shall, if requested by the Administrative Agent, be
evidenced by an intercompany note in form and substance satisfactory to the
Administrative Agent and be pledged to the Collateral Agent.
Section 6.10. Leasing Arrangements.The Parent and the Company will not and will
ensure that none of their Subsidiaries will enter into or permit to subsist any
finance lease, hire purchase, conditional sale agreement or other agreement for
the acquisition of any asset upon deferred payment terms other than pursuant to
Permitted Financing.
Section 6.11. Hedging Transactions.The Parent and the Company will not and will
ensure that none of their Subsidiaries will enter into any interest rate swap,
cap, ceiling, collar or floor or any currency swap, futures, foreign exchange,
commodity contract, option or other derivative transaction except for the
purposes of hedging interest rate or currency exposure in relation to the Notes,
this Agreement or any other Permitted Indebtedness.
Section 6.12. Subsidiaries.Without the prior written consent of the
Administrative Agent, the Parent and the Company will not and will ensure that
none of their Subsidiaries will form or acquire any Subsidiary other than
Enertel pursuant to the Enertel Acquisition to be financed by the proceeds of
the Term Loan.
Section 6.13. Acquisitions.Without the prior written consent of the
Administrative Agent, the Parent and the Company will not and will ensure that
none of their Subsidiaries will acquire any business or acquire substantially
all the assets of any person or enter into any agreement to do so other than (i)
Enertel pursuant to the Enertel Acquisition to be financed by the proceeds of
the Term Loans and (ii) an Acquisition which (other than by WP Acquisition)
complies with the provisions of Section 6.1(c).
Section 6.14. Investments.Without the prior written consent of the
Administrative Agent, the Parent and the Company will not and will ensure that
none of their Subsidiaries will own any interest in any share, equity related
investment or investment security other than:-
(A) shares in its Subsidiaries at the date hereof and Enertel pursuant to the
Enertel Acquisition to be financed by the proceeds of the Term Loans;
(b) an Acquisition (other than by WP Acquisition) which is consummated in
accordance with the provisions of Section 6.1(c);
(c) stock, obligations or securities received in satisfaction of judgments; and
(d) Cash Equivalents.
Section 6.5. Issuance of Shares.The Parent and the Company will not and will
ensure that none of their Subsidiaries will allot or issue any shares of its
capital stock other than:
(A) common stock by the Parent or any right to subscribe for, or option
(including warrants) to acquire, common stock in the Parent;
(B) an issue of common stock by one member of the Group to another member of
the Group;
(c) pursuant to the terms of the Warrant Agreement;
(d) shares of stock constituting 20% of issued shares of the Dutch Holding
Company to the Minority Shareholders (or other Persons in lieu thereof) pursuant
to the Minority Shareholder Agreement;
(e) shares of common stock of the Parent issued to Global Crossing pursuant to
the capital contribution to be made by Global Crossing in the Parent as set
forth in the agreement or commitment referred to in Section 3.1(ii); and
(f) common stock of the Company issued to a Person as consideration for an
Acquisition which complies with the terms and provisions of Section 6.1(c).
The Parent and the Company will not, and will ensure that none of their
Subsidiaries will, in addition to any other restrictions or agreements set forth
herein or in the other Finance Document, sell, issue or otherwise dispose of any
shares of Enertel to the Minority Shareholders or any other Person.
Section 6.16 Restriction on Payment of Dividends.The Parent and the Company will
not and will ensure that none of their Subsidiaries will, declare or pay,
directly or indirectly, any dividend or make any other distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof (other than a dividend or distribution of any shares of
common stock of the Parent or Company), with respect to any shares of its
capital stock (including, without limitation, with respect to Preferred Stock)
or directly or indirectly redeem, purchase, retire or otherwise acquire for
value (or permit any Subsidiary to purchase or acquire) any shares of any class
of its capital stock (including, without limitation, any Preferred Stock) or set
aside any amount for any such purpose; provided, however, that any Subsidiary
may declare and pay dividends or make other distributions to the Parent or
Company.
Section 6.16 Restriction on Payment of Dividends.Except as set forth in Section
6.16, the Company will not and will ensure that none of its Subsidiaries will,
make any payment to their shareholders or employees (other than salaries, bonus
or other similar remuneration) by way of management fee, royalty fee or
otherwise, unless such payment is in respect of services actually provided on
bona fide arm's length commercial terms.
Section 6.18. Joint Ventures.The Parent and the Company will not and will
ensure that none of their Subsidiaries will acquire any shares, stock,
securities or other interest in any joint venture entities, whether a company,
unincorporated firm, undertaking, joint venture, association, partnership or
other entity in which any other member of the Group has an interest from time to
time (each a "Joint Venture") or enter into or commit to any third party to
enter into any Joint Venture or any joint venture agreement or arrangements
where (in any such case) it has any obligation (whether to such Joint Venture or
to any other person, and whether actual or contingent) to lend or to guarantee
or transfer assets to or otherwise fund or incur any liability in respect to
such Joint Venture or any other person or to acquire any shares in or assets of
such Joint Venture save for any acquisition of or subscription for shares in the
equity capital of any joint venture company limited by shares (or the equivalent
in any other jurisdiction) or such Joint Venture of an equivalent nature as the
Majority Lenders may approve in writing.
Section 6.19. Business of Company and Subsidiaries.The Parent and the Company
will not, and will ensure that none of its Subsidiaries will, engage at any time
in any business or business activity other than the Business.
Section 6.20. Limitations on Debt Prepayments.The Parent and the Company will
not, and will ensure that none of their Subsidiaries will, optionally prepay,
repurchase or redeem or otherwise defease or segregate funds with respect to any
Indebtedness for borrowed money (other than Indebtedness under the Finance
Documents) of the Parent, the Company or any of their Subsidiaries.
Section 6.21. Amendment of Certain Documents, Etc.The Parent and Company will
not, and will ensure that their Subsidiaries will not:
(a) amend, modify, cancel or grant any waiver with respect to any indenture,
note or any other instrument evidencing Indebtedness for money borrowed or
preferred or preference stock or pursuant to which any Indebtedness for money
borrowed or such stock was issued or issue any securities in exchange for any
Indebtedness for money borrowed or any preferred or preference stock (including,
without limitation, the Preferred Stock);
(b) cause or suffer to exist any amendment or modification to or supplement of
the certificate of incorporation or by-laws or other organic document of such
Person, any Finance Document, the Minority Shareholder Agreement or any Material
Contract, without the prior written consent of the Administrative Agent; or
(c) enter into the "Stockholder Agreement" referred to in the Minority
Shareholder Agreement, or any other agreement relating to the shares of the
Dutch Holding Company or Enertel, without the prior written consent of the
Majority Lenders.
ARTICLE VII
EVENTS OF DEFAULT
Section VII.1. Events of Default.The occurrence of each of the following events
shall be Events of Default:
(A) Payment Default.
(i) The Company fails to pay on the due date any principal of any Term Loan or
any Fee payable by it under any of the Finance Documents when and as the same
shall become due and payable, whether at the due date thereof or at the date
fixed for prepayment thereof or by acceleration thereof or otherwise.
(ii)The Company fails to pay on the due date any interest on any Term Loan or
any other amount (other than an amount referred to in paragraph (a)(i) above)
due under any Finance Document, when and as the same shall become due and
payable, and such default shall continue unremedied for a period of two Business
Days;
(b) Breach of Certain Covenants. The Company defaults in the due observance or
performance of any covenant, or condition or agreement in Section 2.15, 5.13(a),
5.15 or in Article VI.
(c) Breach of Other Obligations. Any Loan Party fails to observe or perform
any of its obligations or undertakings under any of the Finance Documents other
than those specified in Section 7.1(a) and (b) above and such failure is not
remedied within 10 Business Days after the Company first becomes aware of such
failure;
(d) Misrepresentation. Any representation, warranty or statement which is made
by any Loan Party in any of the Finance Documents or which is contained in any
certificate, statement or notice provided under or pursuant to any of the
Finance Documents proves to be incorrect in any respect.
(e) Invalidity. Any Finance Document shall not be for any reason, or shall be
asserted by any Loan Party which is a party thereto, not to be in full force and
effect and enforceable in all material respects in accordance with its terms or
any security interest purported to be created by any Security Document shall
cease to be, or shall be asserted by a Loan Party not to be, a valid, perfected
first priority (except as otherwise expressly provided in this Agreement or such
Security Document) security interest in the Collateral covered thereby, except
to the extent that any such loss of perfection or priority results from the
failure of the Collateral Agent to maintain possession of certificates
representing securities pledged under the Pledge Agreement or otherwise taken
any action within its control.
(f) Cross Default. Any Indebtedness of the Parent, the Company or any other
member of the Group in excess of $5 million in aggregate:
(I) is not paid when due or within any applicable grace period in any agreement
relating to that Indebtedness;
(II) becomes due and payable (or capable of being declared due and payable)
before its normal maturity or is placed upon demand (or any commitment for any
such indebtedness is canceled or suspended) by reason of a default or event of
default, however described.
(g) Bankruptcy.
(i) An involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (x) relief in
respect of the Parent, the Company or any Subsidiary, or of a substantial part
of the property or assets of the Parent, the Company or a Subsidiary, under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other Federal, state or foreign bankruptcy, insolvency, receivership or
similar law, (y) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Parent, the Company or any
of their Subsidiaries or for a substantial part of the property or assets of the
Parent, the Company or any of their Subsidiaries or (z) the winding-up or
liquidation of the Parent, the Company or any of their Subsidiaries; and 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; or
(ii)the Parent, the Company or any of their Subsidiaries shall (1) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
federal, state or foreign bankruptcy, insolvency, receivership or similar law,
(2) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or the filing of any petition described in
(g) above, (3) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Parent, the
Company or any of their Subsidiaries or for a substantial part of the property
or assets of the Parent, the Company or any of their Subsidiaries, (4) file an
answer admitting the material allegations of a petition filed against it in any
such proceeding, (5) make a general assignment for the benefit of creditors, (6)
become unable, admit in writing its inability or fail generally to pay its debts
as and when they become due or (7) take any action for the purpose of effecting
any of the foregoing;
(h) Judgments. One or more judgments for the payment of money in an aggregate
amount in excess of $1,000,000 (excluding any portion thereof that an insurance
company of recognized standing and creditworthiness has agreed in a writing
reasonably satisfactory to the Administrative Agent to pay) shall be rendered
against the Parent, the Company, any of their Subsidiaries or any combination
thereof and the same shall remain undischarged for a period of 30 consecutive
days during which execution shall not be effectively stayed, or any action shall
be legally taken by a judgment creditor to levy upon assets or properties of the
Parent, the Company or any of their Subsidiaries to enforce any such judgment;
(i) ERISA Event. An ERISA Event shall have occurred that, in the opinion of
the Majority Lenders, when taken together with all other such ERISA Events,
could reasonably be expected to result in liability of the Parent, the Company
and their ERISA Affiliates in an aggregate amount exceeding $1,000,000;
(j) Similar Events Elsewhere. There occurs in relation to the Parent, the
Company or any other member of the Group or any of their assets in any country
or territory in which it is incorporated or carries on business or to the
jurisdiction of whose courts it or any of its property is subject any event
which corresponds in that country or territory with any of those mentioned in
Sections 7.1(g).
(k) Cessation of Business. The Parent, the Company or any other member of the
Group ceases, or announces and intention to cease, to carry on all or a
substantial part of its business.
(l) Compulsory Acquisition. All or any material part of the assets of the
Parent, the Company or any other member of the Group is seized, nationalized,
expropriated or compulsorily acquired by, or by the order of, any Governmental
Authority.
(m) Change of Control. A Change of Control shall have occurred.
(n) Licenses and Material Contracts.
(I) At any time any Operating License or any Material Contract is terminated,
suspended, revoked or canceled or otherwise ceases to be in full force and
effect and is not renewed or replaced.
(II) Any alteration or variation is made to any term of any other Operating
License or any Material Contract which has or is reasonably likely to have a
Material Adverse Effect;
(III) Any party breaches any term of or repudiates any of its obligations under
any Operating License or any Material Contract and such breach or repudiation
has or is reasonably likely to have a Material Adverse Effect;
(IV) Any notice or other communication is given to or received by the Parent,
the Company or any of their Subsidiaries, including any such notice or
communication issued by the FCC or any other Governmental Agency or any party to
a Material Contract, the conditions or requirements of which the Parent, the
Company or any of their Subsidiaries is unable to comply with, which:
(x)would give rise to the termination, suspension, revocation or cancellation of
any Operating License or any Material Contract;
(y)would give rise to any alteration or variation to any term of any Operating
License or any Material Contract which has or is reasonably likely to have a
Material Adverse Effect.
(o) Licenses and Material Contracts. If, for any reason, the Minority
Shareholders (or other Persons acceptable to the Lenders) fail by August 1, 1998
to purchase 20% of the equity of the Dutch Holding Company and fund the purchase
price for such purchase in accordance with the terms and provisions of the
Minority Shareholder Agreement or if such purchase is for any reason deemed to
be rescinded or ineffective.
Section VII.2. Suspension of Commitment.If a Default shall occur, the
obligation of the Lenders to make Loans shall be immediately suspended without
notice to the Company, but is subject to reinstatement if the Default is cured
within any time period which is applicable to such Default.
Section VII.3. Termination of Commitments; Acceleration.If an Event of Default
shall occur and be continuing, the Administrative Agent shall upon notice from
the Majority Lenders, by notice to Company:
(A) declare the Commitments to be terminated, whereupon the Commitments and the
obligations of Lenders to make Loans shall be immediately terminated; and
(B) declare the entire unpaid principal amount of the Loans, all interest
accrued and unpaid thereon and all other amounts payable hereunder and under the
other Finance Documents to be forthwith due and payable, whereupon the entire
unpaid principal amount of the Loans, all interest accrued and unpaid thereon
and all other amounts payable hereunder and under the other Finance Documents
shall be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Parent and the Company;
provided, however, even if there is no notice to the Company, the occurrence of
the events described in Section 7.1(g), shall result in an immediate termination
of the Commitments of the Lenders and an immediate acceleration of all amounts
due by the Company under the Notes.
Section VII.4. Compulsory Sale.The Majority Lenders after the occurrence of an
Event of Default may require the Parent and the Company to take such steps as
the Majority Lenders may specify to market and/or sell all or any portion of the
Collateral or notify the Company that the Lenders intend to and will market the
Business on behalf of the Company. In the event that the Majority Lenders give
notice under this Section 7.4 stating which Event of Default has occurred the
Parent and the Company will and will ensure that each of their Subsidiaries will
take all such steps and will provide any assistance which the Lenders may
require in connection with the marketing and sale of the Business and for this
purpose the Parent and the Company will and will ensure that each of their
Subsidiaries will at their own expense execute all agreements and do all other
things which the Lenders may require in connection with or for the purposes of
the marketing and sale of the Business. The Company shall indemnify the Lenders
for all reasonable costs and expenses incurred by them in the exercise of their
rights under this Section 7.4. In exercising their rights under this Section
7.4, the Lenders shall be under the same duty to the Parent and the Company (but
no greater duty) to obtain the best price reasonably obtainable for the Business
as they would have been under had a receiver been appointed under the Security
Agreement but shall not, for the avoidance of doubt, be under any greater
constraint as to the timing of any sale than any such receiver would be under.
Section VII.5. Remedies Not Exclusive.The remedies provided in this Article 7
and in the other Finance Documents are cumulative and not exclusive of any
remedies provided by law. Each Lender is entitled to exercise any remedies
simultaneously or in whatever order the Lender deems appropriate.
Section VII.6. Rights Under Finance Documents.Upon the occurrence and during
the continuance of any Event of Default, the Lenders may take any lawful action
against the Parent and the Company to collect the payments then due and
thereafter to become due under the Finance Documents.
ARTICLE VIII
THE ADMINISTRATIVE AGENT AND THE DOCUMENTATION AGENT
Section VIII.1. Appointment.(A) Each Lender hereby designates Bankers Trust
Company as Administrative Agent (for purposes of this Article 8, the term
"Administrative Agent" shall include Bankers Trust Company as Collateral Agent
under the Security Documents) to act as herein specified.
(B) Each Lender hereby irrevocably authorizes, and each holder of any Note
shall be deemed irrevocably to authorize, the Administrative Agent to take such
action on its behalf under the provisions of this Agreement and the Notes and
any other instruments and agreements referred to herein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Administrative Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The
Collateral Agent shall hold all Collateral and the Administrative Agent shall
hold all payments of principal, interest, fees, charges and expenses received
pursuant to this Agreement or any other Finance Document for the benefit of the
Lenders to be distributed as provided herein. The Administrative Agent may
perform any of its duties hereunder by or through its agents or employees.
(C) The provisions of this Article 8 are solely for the benefit of the
Administrative Agent and the Lenders, and the Parent, the Company nor any of its
Subsidiaries shall have any rights as a third party beneficiary of any of the
provisions hereof (other than Section 8.9 and 8.10(c)). In performing its
functions and duties under this Agreement, the Administrative Agent shall act
solely as agent of the Lenders and does not assume and shall not be deemed to
have assumed any obligation toward or relationship of agency or trust with or
for the Loan Parties or any of their respective Subsidiaries.
Section VIII.2. Nature of Duties of Administrative Agent.The Administrative
Agent shall have no duties or responsibilities except those expressly set forth
in this Agreement and the other Finance Documents. Neither the Administrative
Agent nor any of its officers, directors, employees or agents shall be liable
for any action taken or omitted by it as such hereunder or in connection
herewith. The duties of the Administrative Agent shall be mechanical and
administrative in nature; the Administrative Agent shall not have by reason of
this Agreement or other Finance Documents a fiduciary relationship in respect of
any Lender; and nothing in this Agreement or the other Finance Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or the
other Finance Documents except as expressly set forth herein or therein.
Section VIII.3. Lack of Reliance on Administrative Agent.(A) Independently and
without reliance upon the Administrative Agent, each Lender, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial or other condition and affairs of the Loan
Parties and their respective Subsidiaries in connection with the taking or not
taking of any action in connection herewith and (ii) its own appraisal of the
creditworthiness of the Loan Parties and their respective Subsidiaries, and,
except as expressly provided in this Agreement, the Administrative Agent shall
not have any duty or responsibility, either initially or on a continuing basis,
to provide any Lender with any credit or other information with respect thereto,
whether coming into its possession before the making of the Loans or at any time
or times thereafter.
(B) The Administrative Agent shall not be responsible to any Lender for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement or the Notes or the
financial or other condition of the Loan Parties or any of their respective
Subsidiaries. The Administrative Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or the Notes, or the financial
condition of the Loan Parties or any of their respective Subsidiaries, or the
existence or possible existence of any Default or Event of Default, unless
specifically requested to do so in writing by any Lender.
Section VIII.4. Certain Rights of the Administrative Agent.The Administrative
Agent shall have the right to request instructions from the Majority Lenders at
any time. If the Administrative Agent requests instructions from the Majority
Lenders with respect to any act or action (including the failure to act) in
connection with this Agreement, the Administrative Agent shall be entitled to
refrain from such act or taking such action unless and until the Administrative
Agent shall have received instructions from the Majority Lenders, and the
Administrative Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Administrative Agent as a result of the
Administrative Agent acting or refraining from acting hereunder in accordance
with the instructions of the Majority Lenders.
Section VIII.5. Reliance by Administrative Agent.The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper person. The Administrative
Agent may consult with legal counsel (including counsel for the Company with
respect to matters concerning the Company and their respective Subsidiaries),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section VIII.6. Indemnification of Administrative ▇▇▇▇▇.▇▇ the extent the
Administrative Agent is not reimbursed and indemnified by the Parent or the
Company, each Lender will reimburse and indemnify the Administrative Agent, in
proportion to the Lenders' respective "percentages" as used in determining the
Majority Lenders, for and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
counsel fees and disbursements) or disbursements of any kind or nature
whatsoever (including all expenses) which may be imposed on, incurred by or
asserted against the Administrative Agent in performing its duties hereunder, in
any way relating to or arising out of this Agreement; provided that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Administrative Agent's gross negligence or willful
misconduct. The agreements contained in this Section shall survive any
termination of this Agreement and the other Finance Documents and the payment in
full of the Obligations.
Section VIII.7. The Administrative Agent in Its Individual Capacity.With
respect to its obligation to lend under this Agreement, the Loans made by it and
the Notes issued to it, the Administrative Agent shall have the same rights and
powers hereunder as any other Lender or holder of a Note and may exercise the
same as though it was not performing the duties specified herein; and the terms
"Lenders", "Majority Lenders", "holders of Notes", or any similar terms shall,
unless the context clearly otherwise indicates, include the Administrative Agent
in its individual capacity. The Administrative Agent may accept deposits from,
lend money to, acquire equity interests in, and generally engage in any kind of
banking, trust, financial advisory or other business with the Parent or the
Company or any Affiliate of the Parent or the Company as if it were not
performing the duties specified herein.
Section VIII.8. Holders of Notes.The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have been
filed with the Administrative Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
Section VIII.9. Successor Administrative Agent.(A) The Administrative Agent
may, upon five (5) Business Days' notice to the Lenders and the Parent and the
Company, resign at any time (effective upon the appointment of a successor
Administrative Agent (including the Lenders acting as such pursuant to the
provisions of this Section 8.9(a)) by giving written notice thereof to the
Lenders and the Loan Parties. Upon any such resignation, the Majority Lenders
shall have the right, upon five (5) days' notice and approval by the Parent and
the Company (which approval shall not be unreasonably withheld or delayed), to
appoint a successor Administrative Agent. If no successor Administrative Agent
(i) shall have been so appointed by the Majority Lenders, and (ii) shall have
accepted such appointment, within fifteen (15) days after the retiring
Administrative Agent's giving of notice of resignation, then, upon five (5)
days' notice, the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent.
(B) 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, 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 hereunder as
Administrative Agent, the provisions of this Article 8 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.
(C) In the event that no successor Administrative Agent is appointed pursuant
to Section 8.9(a) above, the Administrative Agent's resignation shall become
effective forty (40) days after notice of such resignation is given to the
Parent and the Company and the Lenders, and the Majority Lenders shall perform
the duties of the Administrative Agent until a successor Administrative Agent is
appointed as provided herein.
Section VIII.10. Collateral Matters. (A) Each Lender authorizes and directs
the Administrative Agent to enter into the Security Documents for the benefit of
the Lenders. Each Lender hereby agrees, and each holder of any Note by the
acceptance thereof will be deemed to agree, that, except as otherwise set forth
herein, any action taken by the Majority Lenders in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by the
Majority Lenders of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all of the Lenders. The Administrative Agent is hereby authorized
on behalf of all of the Lenders, without the necessity of any notice to or
further consent from any Lender, from time to time prior to an Event of Default,
to take any action with respect to any Collateral or Security Documents which
may be necessary to perfect and maintain perfected the security interest in and
liens upon the Collateral granted pursuant to the Security Documents.
(B) The Lenders hereby authorize the Administrative Agent, at its option and in
its discretion, upon the direction of the Administrative Agent to release any
Security Interest granted to or held by the Administrative Agent upon any
Collateral (i) upon termination of the Commitments and payment and satisfaction
of all of the Obligations at any time arising under or in respect of this
Agreement or the Finance Documents or the transactions contemplated hereby or
thereby, (ii) constituting property being sold or disposed of upon receipt of
the proceeds of such sale by the Administrative Agent if the Company certifies
to the Administrative Agent that the sale or disposition is made in compliance
with Section 6.2 hereof (and the Administrative Agent may rely conclusively on
any such certificate, without further inquiry) or (iii) if approved, authorized
or ratified in writing by the Majority Lenders, unless such release is required
to be approved by all of the Lenders hereunder. 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 pursuant to this Section 8.10.
(C) Upon any sale and transfer of Collateral which is expressly permitted
pursuant to the terms of this Agreement, or consented to in writing by the
Majority Lenders or all of the Lenders, as applicable, and upon at least ten
(10) Business Days' prior written request by the Company, the Administrative
Agent and/or Collateral Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Security Interests granted to the Administrative Agent for the benefit of
the Lenders herein or pursuant hereto upon the Collateral that was sold or
transferred; provided that (i) the Administrative Agent shall not be required to
execute any such document on terms which, in the Administrative Agent's opinion,
would expose the Administrative Agent to liability or create any obligation or
entail any consequence other than the release of such Security Interests without
recourse, representation or warranty and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Security Interests
upon (or obligations of the Company or any other Loan Party or any of their
respective Subsidiaries in respect of) all interests retained by the Company or
any other Loan Party or any of their respective Subsidiaries, including, without
limitation, the proceeds of the sale, all of which shall continue to constitute
part of the Collateral. In the event of any sale or transfer of Collateral, or
any foreclosure with respect to any of the Collateral, the Administrative Agent
shall be authorized to deduct all of the expenses reasonably incurred by the
Administrative Agent from the proceeds of any such sale, transfer or
foreclosure.
(D) The Administrative Agent shall have no obligation whatsoever to the Lenders
or to any other Person to assure that the Collateral exists or is owned by the
Parent, the Company or any of their respective Subsidiaries or is cared for,
protected or insured or that the Security Interests granted to the
Administrative Agent herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced or are
entitled to any particular priority, or to exercise or to continue exercising at
all or in any manner or under any duty of care, disclosure or fidelity any of
the rights, authorities and powers granted or available to the Administrative
Agent in this Section 8.10 or in any of the Security Documents, it being
understood and agreed that in respect of the Collateral, or any act, omission or
event related thereto, the Administrative Agent may act in any manner it may
deem appropriate, in its sole discretion, given the Administrative Agent's own
interest in the Collateral as one of the Lenders and that the Administrative
Agent shall have no duty or liability whatsoever to the Lenders, except for its
gross negligence or willful misconduct.
(e) The Parent and the Company, for itself and on behalf of each of the other
Loan Parties, and each of the Finance Parties agree that the Collateral Agent
shall be the joint creditor (together with the relevant Finance Party) of each
and every Obligation of any Loan Party to each of the Finance Parties under this
Agreement, and that accordingly the Collateral Agent will have its own
independent right to demand performance by the relevant Loan Party of such
Obligations. However, any indefeasible discharge of any such Obligation to one
of the Collateral Agent or the relevant Finance Party shall, to the same extent,
discharge the corresponding Obligation owing to the other.
(f) Without limiting or affecting the Collateral Agent's rights against any
Loan Party (whether under this paragraph or under any other provision of the
Finance Documents), the Collateral Agent agrees with each other Finance Party
(on a several and divided basis) that, subject as set out in the next sentence,
it will not exercise its rights as a joint creditor with a Finance Party except
with the consent of the relevant Finance Party. However, for the avoidance of
doubt, nothing in the previous sentence shall in any way limit the Collateral
Agent's right to act in the protection or preservation of rights under or to
enforce any Security Document as contemplated by this Agreement and/or the
relevant Security Document (or to do any act reasonably incidental to any of the
foregoing).
Section Section VIII.11. Actions with Respect to ▇▇▇▇▇▇▇▇.▇▇ addition to the
Administrative Agent's right to take actions on its own accord as permitted
under this Agreement, the Administrative Agent shall take such action with
respect to an Event of Default as shall be directed by the Majority Lenders;
provided that until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Event of
Default as it shall deem advisable and in the best interest of the Lenders.
Section VIII.12. Delivery of Information.The Administrative Agent shall not be
required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the
Administrative Agent from the Parent, the Company or any of their Subsidiaries.
ARTICLE IX
MISCELLANEOUS
Section IX.1. Payment of Expenses.(A) The Parent and Company shall, jointly
and severally, whether or not the transactions hereby contemplated are
consummated, pay all reasonable out-of-pocket costs (including legal fees),
charges and expenses of the Administrative Agent and Collateral Agent in
connection with (i) the negotiation, preparation, execution and delivery of the
Finance Documents and the documents and instruments referred to therein, (ii)
the syndication of the Loans, (iii) the creation, perfection or protection of
any Security Interest securing the Obligations, (iv) the Administrative Agent's
review and due diligence and (v) any amendment, waiver, consent, exercise of
rights, release or production (or action taken on request for any of the
foregoing, even if such request is rejected) relating to any of the Finance
Documents (including, without limitation, as to each of the foregoing, the fees
and disbursements of counsel to the Administrative Agent and any other attorneys
retained by the Administrative Agent).
(B) The Company shall, jointly and severally, pay all reasonable out-of-pocket
costs and expenses of the Administrative Agent and each Lender in connection
with the preservation of rights under, and enforcement of, the Finance Documents
and the documents and instruments referred to therein or in connection with any
restructuring or rescheduling of the Obligations (including, without limitation,
the reasonable fees and disbursements of counsel for the Administrative Agent
and the Lenders and any value added tax or similar tax thereon).
(C) The Parent and the Company agree that the costs, charges and expenses
referred to in this Section 9.1, include those payable to any independent
consultant or other person or agent appointed by the Administrative Agent or a
Lender, or any receiver, administrator, agent or similar controller or any
attorney appointed by the Administrative Agent or any Lender under or in
relation to any Finance Document.
(D) The Parent and the Company, jointly and severally, agree to pay all such
costs and expenses and or reimburse the Administrative Agent promptly after
receipt of a written notice demanding payment therefor.
Section IX.2. Assignments and Transfers.(A) Successors and Assigns;
Participations; Assignments. This Agreement shall become effective on the date
(the "Effective Date") on which it is executed and delivered by the Parent, the
Company, the Lenders and the Administrative Agent and shall be binding upon and
inure to the benefit of the Parent, the Company, the Lenders, the Administrative
Agent, all future holders of the Notes and their respective successors and
assigns, except that the Company may not assign or transfer any of its
respective rights or obligations under this Agreement. No Lender may
participate, assign or sell any right or interest in this Agreement, the Loans
or the other Finance Documents or its Commitment, except as required by
operation of law, in connection with the merger, consolidation or dissolution of
any Lender or as provided in this Section 9.2.
(B) Assignments and Transfers by a Lender. Any Lender may, at its own cost,
without requiring any consent, assign or transfer to another Lender or an
affiliate of a Lender, and otherwise with the consent of the Administrative
Agent (which shall not be unreasonably withheld or delayed) to any other Person
all or a ratable portion of all of its rights, benefits and obligations
hereunder, provided that no assignee or transferee shall be entitled to receive
pursuant to the Finance Documents more than the amounts which would otherwise
have been payable by the Parent or the Company to such Lender, had such
assignment or transfer not have been made, in respect of the rights, benefits
and obligations so assigned or transferred. Any Lender requesting the
Administrative Agent's consent to a transfer or assignment shall provide the
Administrative Agent with all reasonable information regarding the proposed
transferee or assignee as the Administrative Agent requests. Upon the
assignment and transfer being made and such written confirmation being delivered
to the Company, the Lender making an assignment or transfer shall be relieved of
its obligations to the extent of such assignment or transfer thereof.
(C) Assignment and Assumption Agreement. If any Lender wishes to assign or
transfer all or any of its rights, benefits and obligations hereunder in
accordance with Section 9.2(b), then such assignment or transfer shall be
effected by the delivery by such Lender to the Administrative Agent for its
accepting and recording in the Register (referred to below) an Assignment and
Assumption Agreement and a fee of $2,500 (payable to the Administrative Agent)
whereupon, to the extent stated in such Assignment and Assumption Agreement, the
Lender thereto seeks to assign or transfer its rights and obligations hereunder:
(I) the Parent, the Company and such Lender shall each be released from further
obligations to the other hereunder, and their respective rights against each
other shall be canceled, except such rights as shall survive the termination of
this Agreement (such rights and obligations being referred to in this Section
9.2(c) as "discharged rights and obligations");
(II) the Parent, the Company and the transferee party thereto shall each assume
obligations towards and acquire rights in respect of each other which differ
from the discharged rights and obligations only insofar as the obligations so
assumed and the rights so acquired by the Company are owed to and constituted by
claims against such transferee and not such Lender so that the Company and the
transferee shall have the same rights and obligations towards each other which
they would have acquired had the transferee been an original party hereto; and
(III) the Administrative Agent, the transferee and the other Lenders shall
acquire the same rights and assume the same obligations between themselves as
they would have acquired and assumed had the transferee been an original party
hereto with the obligations assumed and the rights acquired by it as a result of
such assignment or transfer.
(D) Administrative Agent's Register and Notice. The Administrative Agent shall
endeavor to maintain a register of the names and addresses of the Lenders, their
Commitments and the principal amounts of their Loans (the "Register"). The
Administrative Agent shall also endeavor to maintain a copy of each Assignment
and Assumption Agreement delivered to and accepted by it and to modify the
Register to give effect to each Assignment and Assumption Agreement. Upon its
receipt of each Assignment and Assumption Agreement, the Administrative Agent
will endeavor to give prompt notice thereof to the Company. The Administrative
Agent shall be entitled to rely upon the Register exclusively for purposes of
identifying the Lenders hereunder. The Administrative Agent shall notify
promptly the Lenders of any Assignment and Assumption Agreement accepted by it
and shall promptly upon any request deliver a copy of such Assignment and
Assumption Agreement and a copy of the Register.
(E) Participations. Any Lender may, at its own cost, grant one or more
participations in its rights, benefits and/or obligations hereunder to third
parties, upon such terms and conditions as such Lender shall determine, provided
that:
(I) notwithstanding any such participation, such Lender shall remain, in so far
as the other parties hereto are concerned, entitled to its rights and benefits
hereunder and bound by its obligations hereunder and the Loan Parties shall not
be obliged to recognize any such third party as having the rights against any of
them which it would have if it had been a party hereto; and
(II) no participant (unless and only to the extent such participant is itself a
Lender) shall be entitled to require such Lender to take or refrain from taking
any action hereunder or under any other Finance Document, except that such
Lender may agree with such participant that such Lender will not, without such
participant's consent, agree to any amendment or waiver of this Agreement
described in Section 9.4(b)(ii).
(F) Disclosure. Each Lender is hereby authorized by the Company to disclose to
any proposed assignee, transferee or sub-participant information in such
Lender's possession (in any capacity) relating to the Company, provided that
such proposed assignee, transferee or sub-participant shall have executed and
delivered to the Lenders a written undertaking to keep confidential any such
information which is not publicly available.
Section IX.3. Notices.Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy or cable communication),
and shall be deemed to have been duly given or made when delivered by hand, or
five (5) days after posting, postage prepaid, or, in the case of telecopy
notice, when confirmation is received, or, in the case of a nationally
recognized overnight courier service, one Business Day after delivery to such
courier service, addressed, in the case of each party hereto, at its address
specified opposite its signature below or on the appropriate Assignment and
Assumption Agreement, or to such other address as may be designated by any party
in a written notice to the other parties hereto, provided that notices and
communications to the Administrative Agent or the Lenders by the Company shall
not be effective until received by the Administrative Agent or the Lenders, as
the case may be.
Section IX.4. Amendments and Waivers.(A) General. Neither this Agreement, any
Note, any other Finance Document to which the Parent or Company is a party nor
any terms hereof or thereof may be amended, supplemented, modified or waived
except in accordance with the provisions of this Section 9.4.
(B) Required Consents. The Majority Lenders, the Parent and the Company may,
from time to time, enter into written amendments or waivers of this Agreement,
the Notes or any of the other Finance Documents, provided, that:
(I) no such amendment or waiver to this Agreement shall be effective unless it
is in writing and signed by the Parent or Company and the Administrative Agent;
(II) no such amendment or waiver shall extend the Maturity Date, the Commitment
Expiry Date or reduce the amount or extend the time of payment of any required
prepayment of any Obligations or reduce the rate or extend the time of payment
of interest on any Obligations, or reduce the principal amount of any
Obligations or reduce any fee payable to the Lenders hereunder, or release all
or substantially all of any Collateral or change the amount of any Commitment of
any Lender, or amend, modify or waive any provision of this Section or the
definition of Majority Lenders, or consent to or permit the assignment or
transfer by the Parent or the Company of any of their rights and obligations
under this Agreement or any other Finance Document, or change the number or
percentage of Lenders who must approve the satisfaction of any condition
precedent, in each case without the written consent of all the Lenders; or
(III) no such amendment or waiver shall amend, modify or waive any provision of
Article 6 or 7 or any other provision of any Finance Document if the effect
thereof is to affect the rights or duties of the Administrative Agent, without
the written consent of the Administrative Agent.
(C) Operation. Any such amendment, supplement, modification or waiver shall
apply to each of the Lenders equally and shall be binding upon the Parent, the
Company, the Lenders, the Administrative Agent and all future holders of the
Notes. In the case of any waiver, the Company, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Notes, and any Default or Event of Default
waived shall be deemed to be cured and not continuing, but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.
No failure on the part of the Administrative Agent or any Lender to exercise, no
course of dealing with respect to and no delay in exercising, any right, power
or remedy hereunder or under any Finance Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any remedies provided in any other
Finance Document by law.
Section IX.5. No Waiver; Remedies.This Agreement shall become effective when it
has been executed by the Company, the Administrative Agent and each of the
Lenders and the same shall have been delivered to the Administrative Agent, and
each of the conditions precedent set forth in Section 3.1 have been satisfied.
Section IX.7. Indemnity and Contribution.(A) Indemnity. The Parent and
Company, jointly and severally, agree to indemnify and hold harmless the
Administrative Agent, the Lenders and each of their respective Affiliates and
assignees and their respective directors, officers, employees, agents and
controlling persons (each, an "Indemnified Party") from and against any and all
losses, claims, damages, expenses, obligations, judgments, costs and liabilities
joint or several, (collectively, "Loss") to which such Indemnified Party may
become subject under any applicable Requirement of Law and related to or arising
out of any transaction contemplated by the Finance Documents or the execution,
delivery and performance of the Finance Documents or any other document in any
way relating to the Loans and the transactions contemplated by the Finance
Documents (including, without limitation, relating to the syndication of the
Commitments and Loans) (except for federal, state and local taxes to the extent
not otherwise provided herein or in any other Finance Document) and will
reimburse any Indemnified Party for all reasonable expenses (including
reasonable counsel fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense of any pending or threatened
claim or any action or proceeding arising therefrom, whether or not such
Indemnified Party is a party and whether or not such claim, action or proceeding
is initiated or brought by or on behalf of the Parent, the Company or any of
their Subsidiaries. The Parent and the Company will not be liable under the
foregoing indemnification provision to an Indemnified Party to the extent that
any Loss is found in a final judgment by a court of competent jurisdiction to
have resulted from such Indemnified Party's willful misconduct or gross
negligence. Each of the Loan Parties also agrees that no Indemnified Party
shall have any liability (whether direct or indirect, in contract or tort or
otherwise) to the Parent and the Company or any security holders or creditors
thereof related to or arising out of the execution, delivery and performance of
any Finance Document or any other document in any way relating to the Loans or
the other transactions contemplated by the Finance Documents, including the use
of the proceeds of the Loan as described in Section 2.10, except to the extent
that any Loss is found in a final judgment by a court to have resulted from such
Indemnified Party's willful misconduct or gross negligence.
(B) Contribution. If the indemnification of an Indemnified Party provided for
in Section 9.7(a) is for any reason held unenforceable, the Parent and Company
agree to contribute to the Losses for which such indemnification is held
unenforceable (i) in such proportion as is appropriate to reflect the relative
benefits to the Parent, the Company and their Subsidiaries, on the one hand, and
the Administrative Agent, the Arranger or the Lenders, as the case may be, on
the other hand, of the transactions contemplated by the Finance Documents,
including, without limitation, the Loans and the other transactions contemplated
by any other document in any way relating to the Loans, including the use of the
proceeds of the Term Loan as described in Section 2.10 (whether or not any of
such transactions are consummated), or (ii) if (but only if) the allocation
provided for in clause (i) is for any reason held unenforceable, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) but also the relative fault of the Parent, the Company and
their Subsidiaries, on the one hand, and the Indemnified Parties, on the other
hand, as well as any other relevant equitable considerations. The Parent and
the Company agree that for the purposes of this Section 9.7(b) the relative
benefits to the Parent, the Company and their Subsidiaries on the one hand, and
the Indemnified Parties on the other hand, of the transactions contemplated by
this Agreement, including, without limitation, the Loans and the other
transactions contemplated by any other document in any way relating to any Loan,
including the use of the proceeds of the Loan as described in Section 2.10,
shall be deemed to be in the same proportion that the proceeds of all Loans paid
or to be paid to the Company bears to the interest and fees paid or to be paid
to the Lenders in connection with the Loans; provided, however, that, to the
extent permitted by applicable law, in no event shall the Indemnified Parties be
required to contribute an aggregate amount in excess of the aggregate interest
and fees actually paid to the Lenders in connection with the Loans. The
foregoing contribution agreement shall be in addition to any rights that any
Indemnified Party may have at common law or otherwise. No investigation or
failure to investigate by any Indemnified Party shall impair the foregoing
indemnification and contribution agreement or any right an Indemnified Party may
have.
(C) Settlement of Claims. Each of the Parent and the Company agrees that,
neither it nor any of their Subsidiaries will settle, compromise or consent to
the entry of any judgment in any pending or threatened claim, action or
proceeding in respect of which indemnification could be sought under this
Section 9.7 (whether or not any Indemnified Party is an actual or potential
party to such claim, action or proceeding), unless such settlement, compromise
or consent includes any unconditional release of each Indemnified Party from all
liability arising out of such claim, action or proceeding.
(D) Appearance Expenses. If an Indemnified Party is requested or required to
appear as a witness in any action brought by or on behalf of or against the
Company or any Affiliate thereof in which such Indemnified Party is not named as
a defendant, the Company agrees to reimburse such Indemnified Party for all
reasonable expenses incurred by it in connection with such Indemnified Party's
appearing and preparing to appear as such a witness, including, without
limitation, the reasonable fees and disbursements of its legal counsel.
(E) Survival. Without prejudice to the survival of any other agreement of the
Parent and Company hereunder, the agreements and obligations of the Parent and
Company contained in this Section 9.7 shall survive the payment in full of
principal and interest hereunder and under the Note.
Section IX.8. Governing Law.This Agreement and the Note shall be governed by,
and construed and enforced in accordance with, the laws of the State of New
York.
Section IX.9. Execution in Counterparts.This Agreement may be executed in any
number of counterparts and by different parties thereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section IX.10. Consent to Jurisdiction, Administrative Agent for Service.(A)
Consent. Each of the Parent and the Company hereby irrevocably submits to the
jurisdiction of any New York State or Federal court, sitting in the City of New
York, New York County, and any appellate court form any thereof (each, a "New
York Court") in any action or proceeding arising out of or relating to this
Agreement or any other Finance Document or for recognition or enforcement of any
judgment, and the Company hereby irrevocably agrees that all claims in respect
of such action or proceeding may be heard and determined in such New York Court.
(B) Waivers. Each of the Parent and the Company hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any Finance Document in any New York Court. The Company also hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding. The Company 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 by any other manner
provided by law.
(C) Service. Each of the Parent and the Company hereby irrevocably consents to
the service of copies of any summons and complaint and any other process which
may be served in any such action or proceeding by certified mail, return receipt
requested, or by delivering a copy of such process to the Parent and Company, at
its address specified in the signature pages or by any other method permitted by
law.
(D) Appointment of Service Agent. Each of the Parent and the Company
designates and appoints CT Corporation System, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ and such other Persons as may irrevocably agree in writing to serve as
their respective agent to receive on their behalf service of all process in any
proceedings in any New York Court, such service being hereby acknowledged by the
Parent and the Company to be effective and binding in every respect. If any
agent appointed by Parent and the Company refuses to receive and forward such
service, that the Parent and the Company hereby agree that service upon it by
mail shall constitute sufficient service.
(E) Other Rights. Nothing in this Section 9.10 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by law or affect the right of the Administrative Agent or any Lender
to bring any action or proceeding against the Company or its Property in the
courts of other jurisdictions.
Section IX.11. No Third Party Beneficiaries.The agreement of the Lenders to
make the Term Loan on the terms and conditions set forth in this Agreement is
solely for the benefit of the Company and no other Person shall have any rights
hereunder, as against the Administrative Agent or any Lender or with respect to
the Loans or the proceeds thereof.
Section IX.12. Marshalling; Recapture.Neither the Administrative Agent nor any
Lender shall be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the
Company or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
the Parent or the Company, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to the Parent or the Company or its estate, trustee, receiver,
custodian or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or repayment,
the obligation or part thereof which has been paid, reduced or satisfied by the
amount so repaid shall be reinstated by the amount so repaid and shall be
included within the liabilities of the Parent or the Company to such Lender as
of the date such initial payment, reduction or satisfaction occurred.
Section IX.13. ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇ case any provision in or obligation under this
Agreement or the Notes or the other Finance Documents shall be invalid, illegal
or unenforceable in any jurisdiction, the validity, legality and enforceability
of the remaining provisions or obligations, or of such provision or obligation
in any other jurisdiction, shall not in any way be affected or impaired thereby.
Section IX.14. Survival.All representations, warranties and indemnities in this
Agreement and any Finance Document shall survive the execution and delivery of
this Agreement and the Notes and the making and repayment of the Loans. Each
indemnity in this Agreement or any other Finance Document is separate and
independent from the other Obligations of the Company.
Section IX.15. Limitation of ▇▇▇▇▇▇▇▇▇.▇▇ claim may be made by the Parent or
the Company or any other Person against the Administrative Agent, the Collateral
Agent or any Lender or the Affiliates, directors, officers, employees, attorneys
or agents of any of them for any special, indirect, consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement or the other Finance Documents, or any act, omission or event
occurring in connection therewith; and the Parent and the Company each hereby
waives, releases and agrees not to ▇▇▇ and shall cause each of its Subsidiaries
to waive, release or agree not to ▇▇▇ (if required), upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
Section IX.16. Independence of Covenants.All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of a Default or Event of Default if such action is taken or
condition exists.
Section IX.17. Confidentiality.Each Lender and the Administrative Agent agrees
(on behalf of itself and each of its Affiliates, directors, officers, employees
and representatives) to keep confidential, in accordance with its customary
procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-public information
supplied to it by the Parent or the Company pursuant to this Agreement which is
identified by the Parent or the Company as being confidential at the time the
same is delivered to the Lenders or the Administrative Agent, provided that
nothing herein shall limit the disclosure of any such information:
(I) to the extent required by statute, rule, regulation or judicial process;
(II) at the request of any bank regulatory authority or in connection with an
examination of the Administrative Agent or such Lender by any such authority;
(III) in connection with any litigation to which any one or more of the Lenders
or the Administrative Agent is a party;
(IV) to the extent that such information is required to be disclosed by a
Governmental Authority in connection with a tax audit or dispute;
(V) to the Administrative Agent's and such Lender's auditors, counsel and
accountants, which, in each case, have a reasonable need to know such
information, as determined by the Administrative Agent or such Lender in their
sole reasonable discretion; and
(VI) to any Affiliate, director, officer, employee or representative who, in
each case, have a reasonable need to know such information as determined by the
Administrative Agent or such Lender in their sole reasonable discretion;
and; provided, further, that, (A) each person referred to in subclauses (v) and
(vi) to whom such information is to be disclosed shall be informed of the
confidential nature of such information and (B) unless specifically prohibited
by law, each Lender shall, prior to disclosure of any such non-public
information notify the Company of any request for disclosure of any such non-
public information (x) by any Governmental Authority (other than a request in
connection with an examination of the financial condition of the Lender by such
Governmental Authority) or (y) pursuant to legal process. In no event shall any
Lender or the Administrative Agent be obligated or required to return any
materials furnished by or on behalf of the Parent or the Company.
Section IX.18. Waiver of Jury Trial.THE PARENT, THE COMPANY, THE ADMINISTRATIVE
AGENT AND EACH LENDER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO ANY OF THE FINANCE DOCUMENTS, ANY DOCUMENT DELIVERED UNDER THE
FINANCE DOCUMENTS, THE LOANS OR THE ACTIONS OF THE ADMINISTRATIVE AGENT, THE
DOCUMENTATION AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
Section IX.19. Currency Indemnity.Each of the Parent and the Company
acknowledges and agrees that this is a credit transaction in which specification
of U.S. Dollars is of the essence and U.S. Dollars shall be the currency of
account and payment in all events. If, pursuant to a judgment or for any other
reason, payment shall be made in another currency and such payment, after prompt
conversion to U.S. Dollars and transfer to New York City in accordance with
normal banking procedures, falls short of the sum due the Lenders in U.S.
Dollars, the Company shall pay the Lenders such shortfall and the Lenders shall
have a separate cause of action for such amount.
Section IX.20. Entire Agreement; Benefit.This Agreement and the other Finance
Documents constitute the entire contract among the parties relative to the
subject matter hereof. Any previous agreement among the parties with respect to
the subject matter hereof is superseded by this Agreement and the Finance
Documents.
Section IX.21. Waiver of ▇▇▇▇▇▇▇▇.▇▇ the extent that the Parent, the Company
has or hereafter may acquire any immunity from:
(A) the jurisdiction of any court of (i) any jurisdiction in which the Company
owns or leases property or assets or (ii) the United States, the State of New
York or any political subdivision thereof; or
(B) from any legal process (whether through service of notice, attachment prior
to judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property and assets, this Agreement, any Finance
Document or actions to enforce judgments in respect of any thereof,
it hereby irrevocably waives such immunity in respect of its obligations under
the above-referenced documents.
Section IX.22. Certificates Conclusive.A certificate, determination,
notification or opinion of a Finance Party, the Majority Lenders or the Lenders
provided for in any Finance Document shall be conclusive save in the case of
manifest error.
Section IX.23. Freedom of Choice.The submission to the jurisdiction of the
courts referred to in Section 9.10(a) shall not (and shall not be construed so
as to) limit the right of any Finance Party to take proceedings against the
Parent and the Company in the courts of any country in which the Parent or the
Company has assets or in any other court of competent jurisdiction nor shall the
taking of proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction (whether concurrently or not) if and to
the extent permitted by applicable law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
EXECUTION
I2N WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first written above.
WORLDPORT INTERNATIONAL, INC.
Address for Notices By ________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WORLDPORT COMMUNICATIONS, INC.
Address for Notices By ________________________________________
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ Name:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Title:
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BANKERS TRUST COMPANY
as Administrative Agent and Collateral Agent
Address for Notices By ________________________________________
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Name:
Attention: Title:
Telephone:
Facsimile:
BANKERS TRUST CORPORATION,
as Lender
Address for Notices By ________________________________________
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Name:
Attention: Title:
Telephone:
Facsimile:
SCHEDU
LE 1.1(A)
Lenders and Lenders Commitments
Commitment
Name of Lender Commitment
Percentage
Bankers Trust Company $120,000,000
100%
SCHEDU
LE 4.1(O)
Organizational Chart