Exhibit 10.1
EXECUTION COPY
U.S. $100,000,000
CREDIT AGREEMENT
dated as of November 22, 1999
among
DIVEO, INC.,
as Borrower,
the LENDERS party hereto,
and
LUCENT TECHNOLOGIES INC.,
as Administrative Agent
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS 1
SECTION 1.01. Certain Defined Terms 1
SECTION 1.02. Computation of Time Periods 26
SECTION 1.03. Accounting Terms 26
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES 27
SECTION 2.01. The Advances 27
SECTION 2.02. Making the Advances 27
SECTION 2.03. Fees 30
SECTION 2.04. Termination or Reduction of the Commitments 31
SECTION 2.05. Repayment of Advances 31
SECTION 2.06. Interest 32
SECTION 2.07. Interest Rate Determination 32
SECTION 2.08. Prepayments 32
SECTION 2.09. Increased Costs, Etc. 35
SECTION 2.10. Payments and Computations 38
SECTION 2.11. Taxes 39
SECTION 2.12. Sharing of Payments, Etc. 41
SECTION 2.13. Use of Proceeds 42
SECTION 2.14. First Eurodollar Method and Second Eurodollar Method 42
SECTION 2.15. Redistribution of Payments 43
ARTICLE III CONDITIONS TO EFFECTIVENESS AND LENDING 43
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01 43
SECTION 3.02. Conditions Precedent to Each Borrowing 48
ARTICLE IV REPRESENTATIONS AND WARRANTIES 49
SECTION 4.01. Representations and Warranties of the Borrower 49
ARTICLE V COVENANTS OF THE BORROWER 57
SECTION 5.01. Affirmative Covenants 58
SECTION 5.02. Negative Covenants 62
SECTION 5.03. Reporting Requirements 72
SECTION 5.04. Operational and Financial Covenants 77
ARTICLE VI EVENTS OF DEFAULT 81
SECTION 6.01. Events of Default 81
ARTICLE VII THE ADMINISTRATIVE AGENT 86
SECTION 7.01. Authorization and Action 86
SECTION 7.02. Agent's Reliance, Etc. 86
SECTION 7.03. Agent and Affiliates 87
SECTION 7.04. Lender Credit Decision 87
SECTION 7.05. Indemnification 87
SECTION 7.06. Successor Agent 88
ARTICLE VIII MISCELLANEOUS 88
SECTION 8.01. Amendments, Etc. 88
SECTION 8.02. Notices, Etc. 90
SECTION 8.03. No Waiver; Remedies 90
SECTION 8.04. Costs and Expenses; Indemnification 90
SECTION 8.05. Right of Set-off 92
SECTION 8.06. Binding Effect 92
SECTION 8.07. Assignments and Participations 93
SECTION 8.08. Confidentiality 95
SECTION 8.09. Governing Law 96
SECTION 8.10. Execution in Counterparts 96
SECTION 8.11. Jurisdiction, Judgment Currency, Etc. 96
SECTION 8.12. Waiver of Jury Trial 97
SECTION 8.13. Intercreditor Arrangements 97
SECTION 8.14. Intercreditor Agreement; Amendments to Ericsson Credit Agreement. 97
iii
Page
Schedules
Schedule 3.01(a)(i) Disclosed Litigation
Schedule 4.01(b) Subsidiaries
Schedule 4.01(f) Authorizations, Approvals, Notices and Filings
Schedule 4.01(o) Liens
Schedule 4.01(t) Leases of Real Property
Schedule 4.01(v) Existing Debt
Schedule 4.01(w) Investments
Schedule 4.01(x) Material Contracts
Schedule 4.01(y) Licenses
Schedule 4.01(z) Insurance Policies
Schedule 4.01(dd) Plans, Multiemployer Plans and Welfare Plans
Schedule 4.01(ii) Material Licenses
Schedule 5.02(u) Stock Purchase Agreements
Exhibits
Exhibit A Form of Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Assignment and Acceptance
Exhibit D-1 Form of Operating Subsidiary Guaranty
Exhibit D-2 Form of Intermediate Holding Company Subsidiary Guaranty
Exhibit E Terms of Intercompany Mirror Subordinated Debt
Exhibit F Form of Intercompany Mirror Subordinated Debt Subordination Agreement
Exhibit G Form of Subordination Agreement
Exhibit H Form of Blocked Account Letter Agreement
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of November 22, 1999 among DIVEO, INC., a
Delaware corporation (the "Borrower"), the Initial Lender, the Lenders (as
hereinafter defined) party hereto and LUCENT TECHNOLOGIES INC., as
administrative agent (the "Administrative Agent") for the Lenders (as
hereinafter defined).
RECITALS
The Borrower has been formed in order to plan, construct, operate and
maintain digital wireless local loop voice and data networks (each, a "Network")
in Mexico, Central America and South America (the "Territory") (the planning,
construction, operation and maintenance of the Networks being the "Project").
The Borrower has entered into the Lucent Supply Agreement dated as of
November 22, 1999 with Lucent Technologies Inc. (together with any of its
Subsidiaries providing services pursuant to the Lucent Supply Agreement,
"Vendor") (the "Supply Agreement") pursuant to which Subsidiaries of the
Borrower will purchase from the Vendor or Subsidiaries of the Vendor, and the
Vendor or Subsidiaries of Vendor will sell to Subsidiaries of the Borrower,
certain telecommunications equipment, software, engineering and other services
in connection with the Project.
Pursuant to this Agreement, the Borrower has requested that Lucent
Technologies Inc., as initial lender hereunder (the "Initial Lender"), extend
credit to it from time to time in order to finance certain costs of the Project,
including, among other things, purchases under the Supply Agreement. The Initial
Lender has agreed to extend credit to the Borrower from time to time under the
terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Administrative Agent's Account" means the account of the
Administrative Agent maintained by the Administrative Agent at The Chase
Manhattan Bank, New York, New York, ABA no. ▇▇▇▇▇▇▇▇▇, account no.
▇▇▇▇▇▇▇▇▇▇, phone no. (▇▇▇) ▇▇▇-▇▇▇▇ (or such other account in New York,
New York as the Administrative Agent shall from time to time specify by
notice).
"Advance" means a Tranche A Advance or a Tranche B Advance.
"Affiliate" means, as to any Person, any other Person that, directly
or indirectly, controls, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of
this definition, the term "control" (including the terms "controlling",
"controlled by" and "under common control with") of a Person means the
possession, direct or indirect, of the power to vote 5% or more of the
Voting Stock of such Person or to direct or cause the direction of the
management and policies of such Person, whether through the ownership of
Voting Stock, by contract or otherwise.
"Agent" means the Administrative Agent or the Collateral Agent.
"Agreement Currency" has the meaning set forth in Section 8.11(c)(ii).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit C.
"Back-to-Back Loans" means, with respect to any Advance, any of the
following:
(a) any loan made by the Borrower to an Intermediate Holding
Company Subsidiary other than Comutacao Digital Ltda.;
(b) any loan made by the Borrower to a financial institution;
(c) any Investment made by the Borrower in a financial
institution;
provided that, in the case of (a), (b) or (c), such loan or
Investment:
(i) was made from the proceeds of such Advance on
substantially the economic terms of such Advance,
(ii) shall have been pledged by the Borrower to the
Collateral Agent, and
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(iii) the proceeds of which shall have been used by the
recipient thereof to make a loan described in subsection (d)
below; or
(d) a loan made by the recipient of a Back-to-Back Loan described
in subsection (a), (b) or (c) above with the proceeds of such
Back-to-Back Loan or by the Borrower from the proceeds of Advances, in
either case to an Operating Subsidiary:
(i) on substantially the economic terms of such related
Back-to-Back Loan or Advance, as applicable,
(ii) that shall have been pledged by the lender (if the
Borrower or an Intermediate Holding Company Subsidiary) to the
Collateral Agent, and
(iii) the proceeds of which shall have been used by such an
Operating Subsidiary for purposes specified in Section 2.13(a).
"Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the
higher of:
(a) the average of the rates of interest announced publicly by
the Reference Banks in New York, New York, from time to time, as such
banks' base rates, and
(b) 1/2 of 1% per annum above the Federal Funds Rate.
"Blocked Account" means an account of an Operating Subsidiary that is
established for the purpose of transmitting proceeds of Advances that are
to be applied to pay invoices under the Supply Agreement and is subject to
a Blocked Account Letter Agreement or a written agreement with the
financial institution with whom such proceeds are deposited acknowledging
substantially similar limitations on the uses of such proceeds.
"Blocked Account Letter Agreement" means an account agreement
substantially in the form of Exhibit H attached hereto.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Borrower Security Agreement" means, collectively, any security
agreements of the Borrower in favor of the Collateral Agent and the Lenders
entered into pursuant to Section 3.01(i)(viii), as amended, modified or
supplemented from time to time.
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"Borrowing" means a borrowing consisting of Advances of the same
tranche made on the same day by the Lenders.
"Business Day" means a day of the year on which banks are not required
or authorized by law to close, with respect to any date of Borrowing, in
New York City, U.S.A., and otherwise in New York City, U.S.A.; Sao Paulo,
Brazil; Buenos Aires, Argentina; Santa Fe de Bogota, Colombia; Panama City,
Panama; and Lima, Peru and days on which dealings are carried on in the
London interbank market.
"Capital Assets" means, with respect to any Person and at any date,
all equipment, fixed assets and real property or improvements of such
Person, or replacements or substitutions therefor or additions thereto,
that have been or should be, in accordance with GAAP for such Person,
reflected as additions to property, plant or equipment on the balance sheet
of such Person at such date or that have a useful life of more than one
year.
"Capital Expenditures" means, for any period, all expenditures that
have been or should be, in accordance with GAAP, reflected as capital
expenditures to such period, less any indefeasible rights of use of fiber
subject to Capitalized Leases.
"Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.
"Cash Equivalents" means:
(a) as to the Borrower, any Intermediate Holding Company
Subsidiary of the Borrower and any Operating Subsidiary of the
Borrower subject to the jurisdiction of the United States or any state
or district thereof, any of the following, to the extent owned by the
Borrower or such Intermediate Holding Company Subsidiary free and
clear of all Liens:
(i) 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 the Government of the United States having a maturity
of not greater than 720 days from the date of acquisition
thereof;
(ii) insured certificates of deposit of or time deposits
with any commercial bank having a maturity of not greater than
720 days from the date of acquisition thereof that:
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(A) is a Lender or a member of the Federal Reserve
System,
(B) issues (or the parent of which issues) commercial
paper rated as described in clause (iii),
(C) is organized under the laws of the United States or
any State thereof, and
(D) has combined capital and surplus of at least
$500,000,000;
(iii) commercial paper in any amount at any time having a
maturity of not greater than 720 days from the date of
acquisition thereof, issued by any corporation organized under
the laws of any State of the United States and rated at least
"Prime-1" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investors
Service, Inc. or "A-1" (or the then equivalent grade) by Standard
& Poor's Corporation; or
(iv) mutual funds issued by an entity organized in the
United States whose investments are comprised of items described
in clauses (i) to (iii) above and having a cash to assets ratio
of 10% or more; and
(b) as to any Operating Subsidiary subject to the jurisdiction of
a government other than that of the United States of any state or
district thereof, any of the following, to the extent owned by the
relevant Subsidiary free and clear of all Liens and having a maturity
of not greater than 360 days from the date of acquisition thereof:
(i) certificates of deposit or any other fixed-rate
instrument issued by (A) major banks organized under the laws of
such jurisdiction or (B) branches of international banks located
in such jurisdiction, in each case having at the date of any
investment combined capital and surplus and retained earnings of
not less than U.S.$500,000,000 ("Permitted Banks");
(ii) money-market funds managed by a Permitted Bank;
(iii) foreign-currency-indexed financial instruments, such
as Government bonds, issued by such jurisdiction, certificates of
deposit or any other fixed-rate instrument issued by an
investment fund, managed by a Permitted Bank; or
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(iv) direct obligations of such jurisdiction, the central
bank of the country of such jurisdiction or any agency or
instrumentality the obligations of which have the full faith and
credit of the government of such jurisdiction.
"Change of Control" means the occurrence of any of the following:
(a) any Competitor shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of the Parent (or other securities
convertible into such Voting Stock) representing 5% or more of the
combined voting power of all Voting Stock of the Parent;
(b) during any period of up to 24 consecutive months, commencing
on or after June 25, 1999, designees who at the beginning of such
24-month period were directors of the Borrower shall cease for any
reason to constitute a majority of the board of directors of the
Borrower;
(c) any Competitor or two or more Competitors acting in concert
shall have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will result in
its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of
the Parent or control over Voting Stock of the Parent (or other
securities convertible into such Voting Stock) representing 5% or more
of the combined voting power of all Voting Stock of the Parent;
(d) the Parent shall cease to own 100% of the Equity Interests in
the Borrower; or
(e) any Person or two or more Persons acting in concert shall
have acquired, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of,
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act
of 1934), directly or indirectly, of Voting Stock of the Parent (or
other securities convertible into such Voting Stock) representing 50%
or more of the combined voting power of all Voting Stock of the
Parent.
"Collateral" means all "Collateral" referred to in the Security
Agreements and all other property that is subject to any Lien in favor of
the Collateral Agent or the Lenders.
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"Collateral Agent" means Citibank, N.A. and its successors as
collateral agent under the Intercreditor Agreement.
"Collateral Agent Letter" means the letter agreement between the
Collateral Agent and the Borrower referred to in Section 3.01(f).
"Commitment" means a Tranche A Commitment or a Tranche B Commitment.
"Competitor" means any Person that (a) has total annual revenues in
excess of $1,000,000,000 and derives 10% or more of its gross revenues or
profits or (b) has a division or Subsidiary has total annual revenues in
excess of $100,000,000 and derives 10% or more of its gross revenues or
profits, from the manufacture of telecommunications or data communications
equipment or from another activity from which the Vendor or an Affiliate of
the Vendor derives more than 10% of its gross revenues or profits, or an
Affiliate of any such Person.
"Compliance Certificate" has the meaning specified in Section 5.03(b).
"Confidential Information" means information that the Borrower
furnishes to the Administrative Agent or any Lender in a writing designated
as confidential, but does not include any such information that is or
becomes generally available to the public other than as a result of a
violation of Section 8.08 or that is or becomes available to the
Administrative Agent or such Lender from a source other than the Borrower.
"Consolidated" refers to the consolidation of accounts in accordance
with GAAP.
"Contributed Capital" means at any date, the aggregate amount of cash
equity capital contributed to the Borrower by its shareholders prior to
such date less any reductions in equity capital resulting from
distributions made by the Borrower in excess of the Borrower's retained
earnings.
"Core Territories" means Argentina, Brazil, Colombia, Panama and Peru.
"Current Assets" of any Person at any date means (a) all assets of
such Person that would, in accordance with GAAP, at such date, be
classified as current assets of a company conducting a business the same as
or similar to that of such Person, after deducting adequate reserves in
each case in which a reserve is proper in accordance with GAAP and (b)
value added tax credits accrued within one year prior to such date.
"Current Liabilities" of any Person means at any date:
(a) all Debt of such Person that by its terms is payable on
demand or matures within one year after such date (excluding any Debt
renewable or
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extendable, at the option of such Person, to a date more than one year
from such date or arising under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit during
a period of more than one year from such date), and
(b) all other liabilities of such Person that in accordance with
GAAP would be classified as current liabilities of such Person.
"Customer Premise Equipment" means any equipment that is (a) owned by
an Operating Subsidiary, (b) located at the office or other premises owned
by a customer or leased by a customer from a third party independent from
the Borrower and its Affiliates, (c) sold, leased or transferred by such
Operating Subsidiary to such customer, or to a third party lessor
(independent from the Borrower and its Affiliates) of such equipment to
such customer, in each case on which customer's premises such equipment is
located and (d) of any of the following types: routers, firewalls,
integrated access devices, radio systems, tdm multiplexors, atm
multiplexors, PBX, server computers, LAN hubs, DSL multiplexors or protocol
converters.
"Debt" of any Person means, without duplication:
(a) all indebtedness of such Person for borrowed money,
(b) all Obligations of such Person for the deferred purchase
price of property or services (other than trade payables not overdue
by more than 60 days incurred in the ordinary course of such Person's
business),
(c) all Obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments,
(d) all Obligations of such Person 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) all Obligations of such Person as lessee under Capitalized
Leases,
(f) all Obligations, contingent or otherwise, of such Person
under acceptance, letter of credit or similar facilities,
(g) all Obligations of such Person in respect of Hedge
Agreements,
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(h) all Debt of others referred to in clauses (a) through (g)
above or clause (i) below guaranteed directly or indirectly in any
manner by such Person, or in effect guaranteed directly or indirectly
by such Person through an agreement (A) to pay or purchase such Debt
or to advance or supply funds for the payment or purchase of such
Debt, (B) 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 Debt or to assure the holder of
such Debt against loss or (C) the primary purpose of which is to
assure a creditor of such Person against loss, and
(i) all Debt referred to in clauses (a) through (g) above secured
by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property
(including without limitation accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Debt.
"Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
"Disclosed Litigation" has the meaning specified in Section 3.01(a).
"EBITDA" means for any period:
(a) Net Income for such period (excluding, to the extent
otherwise included in Net Income, Consolidated interest income), plus
(b) the following, in each case without duplication and to the
extent deducted from Revenue in accordance with GAAP in determining
Net Income for such period:
(i) consolidated interest expense of the Borrower and its
Subsidiaries for such period,
(ii) taxes based upon Net Income,
(iii) depreciation and amortization, and
(iv) other non-cash charges.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) a commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $1,000,000,000; (d) a
savings and loan association or savings bank organized under the laws of
the United States, or any State thereof, and
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having total assets in excess of $1,000,000,000; (e) a commercial bank
organized under the laws of any other country that is a member of the OECD
or has concluded special lending arrangements with the International
Monetary Fund associated with its General Arrangements to Borrow, or a
political subdivision of any such country, and having total assets in
excess of $1,000,000,000, so long as such bank is acting through a branch
or agency located in the United States; (f) the central bank of any country
that is a member of the OECD; and (g) a finance company, insurance company
or other financial institution, or fund (whether a corporation,
partnership, trust or other entity) that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary course of its
business and having total assets (in the case of a fund, together with any
other funds managed by the same fund manager) in excess of $1,000,000,000;
provided that no Loan Party or Affiliate of a Loan Party shall qualify as
an Eligible Assignee under this definition.
"Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or
potential liability, investigation, proceeding, consent order or consent
agreement relating in any way to any Environmental Law, Environmental
Permit or Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment, including without limitation
(a) by any governmental or regulatory authority for enforcement, cleanup,
removal, response, remedial or other actions or damages and (b) by any
governmental or regulatory authority or any third party for damages,
contribution, indemnification, cost recovery, compensation or injunctive
relief.
"Environmental Law" means any federal, state, local or foreign
statute, law, ordinance, rule, regulation, code, order, judgment, decree or
judicial or agency interpretation, policy or guidance relating to pollution
or protection of the environment, health, safety or natural resources,
including without limitation those relating to the use, handling,
transportation, treatment, storage, disposal, release or discharge of
Hazardous Materials.
"Environmental Permit" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
"Equity Interests" means, with respect to any Person, shares of
capital stock or contribution of (or other ownership or profit interests
in) such Person, warrants, options or other rights for the purchase or
other acquisition from such Person of shares of capital stock of (or other
ownership or profit interests in) such Person, securities convertible into
or exchangeable for shares of capital stock of (or other ownership or
profit interests in) such Person or warrants, rights or options for the
purchase or other acquisition from such Person of such shares (or such
other interests), and other ownership or profit interests in such Person
(including, without limitation, partnership, member or trust interests
therein),
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whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on
any date of determination.
"Ericsson Credit Agreement" means the Amended and Restated Credit
Agreement dated as of the date hereof among the Borrower, the Lenders party
thereto and Ericsson Credit AB as Administrative Agent.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of any Loan Party, or under
common control with any Loan Party, within the meaning of Section 414 of
the Internal Revenue Code.
"ERISA Event" means (a) (i) the occurrence of a reportable event,
within the meaning of Section 4043 of ERISA, with respect to any Plan
unless the 30-day notice requirement with respect to such event has been
waived by the PBGC or (ii) the requirements of Section 4043(b) of ERISA
apply with respect to a contributing sponsor, as defined in Section
4001(a)(13) of ERISA, of a Plan, and an event described in paragraph (9),
(10), (11), (12) or (13) of Section 4043(c) of ERISA is reasonably expected
to occur with respect to such Plan within the following 30 days; (b) the
application for a minimum funding waiver with respect to a Plan; (c) the
provision by the administrator of any Plan of a notice of intent to
terminate such Plan, pursuant to Section 4041(a)(2) of ERISA (including any
such notice with respect to a plan amendment referred to in Section 4041(e)
of ERISA); (d) the cessation of operations at a facility of any Loan Party
or any ERISA Affiliate in the circumstances described in Section 4062(e) of
ERISA; (e) the withdrawal by any Loan Party or any ERISA Affiliate from a
Multiple Employer Plan during a plan year for which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (f) the conditions for
imposition of a lien under Section 302(f) of ERISA shall have been met with
respect to any Plan; (g) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to Section 307 of ERISA; or
(h) the institution by the PBGC of proceedings to terminate a Plan pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition
described in Section 4042 of ERISA that constitutes grounds for the
termination of, or the appointment of a trustee to administer, such Plan.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
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"Eurodollar Rate" means, for any Interest Period for each Advance
comprising part of the same Borrowing, an interest rate per annum equal to
the rate per annum obtained by dividing
(a) LIBOR for such Interest Period by
(b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
The Eurodollar Rate for any Interest Period for each Advance comprising
part of the same Borrowing shall be determined by the Administrative Agent,
subject, however, to the provisions of Section 2.07.
"Eurodollar Rate Reserve Percentage" for any Interest Period for all
Advances comprising part of the same Borrowing means the reserve percentage
applicable two Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including without limitation any emergency,
supplemental or other marginal reserve requirement) for a member bank of
the Federal Reserve System in New York City with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities having a term
equal to such Interest Period.
"Events of Default" has the meaning specified in Section 6.01.
"Excess Cash Flow" means for any period the positive amount, if any,
of:
(a) EBITDA for such period, minus
(b) the sum of the following, to the extent paid in cash by the
Borrower and its Subsidiaries during such period:
(i) scheduled debt service,
(ii) taxes,
(iii) permitted Capital Expenditures (except for any capital
expenditures that have been financed with Debt incurred during
such period),
(iv) payments for spectrum rights other than payments in
advance of the date due, and
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(v) extraordinary cash charges,
(c) plus any decrease or minus any increase, as the case may be,
in Working Capital Investments between the first and last day of such
period.
"Existing Debt" means Debt of the Borrower and its Subsidiaries
outstanding as of June 25, 1999.
"Extraordinary Receipt" means any cash received by or paid to or for
the account of any Person not in the ordinary course of business,
including, without limitation, tax refunds, pension plan reversions,
proceeds of insurance (other than proceeds of business interruption
insurance to the extent such proceeds constitute compensation for lost
earnings), condemnation awards (and payments in lieu thereof) and indemnity
payments.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal-funds transactions with members
of the Federal Reserve System arranged by Federal-funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next-preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day that is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal-funds brokers of recognized
standing selected by it.
"Federal Reserve System" means the system established by the Federal
Reserve Act of 1913 to regulate the U.S. monetary and banking system.
"First Eurodollar Method" means the terms and provisions of this
Agreement applicable to Advances when the First Eurodollar Method is to be
applied pursuant to Section 2.14.
"GAAP" has the meaning specified in Section 1.03.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Gross PP&E" means at any date, Consolidated gross plant, property and
equipment of the Borrower and its Subsidiaries less any indefeasible rights
of use of fiber subject to Capitalized Leases, in each case as of such date
and as determined in accordance with GAAP.
14
"Guarantor" means any Subsidiary of the Borrower that executes a
Guaranty.
"Guaranty" means a guaranty issued in favor of the Administrative
Agent and the Lenders (i) in the case of any Operating Subsidiary, in
substantially in the form of Exhibit D-1 or (ii) in the case of any
Intermediate Holding Company, in substantially the form of Exhibit D-2.
"Hazardous Materials" means:
(a) petroleum and petroleum products, byproducts or breakdown
products, radioactive materials, asbestos-containing materials,
polychlorinated biphenyls and radon gas, and
(b) any other chemicals, materials or substances designated,
classified or regulated as hazardous or toxic or as a pollutant or
contaminant under any Environmental Law.
"Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements,
currency future or option contracts and other similar agreements.
"Indemnified Costs" has the meaning specified in Section 7.05.
"Initial Lender" has the meaning specified in the preamble to this
Agreement.
"Insignificant Subsidiary" means any Subsidiary of the Borrower having
assets with a value not exceeding $500,000 or in which no more than
$500,000 has been invested.
"Intercompany Mirror Subordinated Debt" means unsecured Debt owing by
the Borrower to the Parent that:
(a) is loaned to the Borrower by the Parent and designated by the
Borrower as representing proceeds from the incurrence of Debt (the
"Parent Mirror Debt") issued by the Parent;
(b) has an interest rate not exceeding the lesser of (i) the
interest rate applicable to the related Parent Mirror Debt and (ii) a
rate of 20% per annum;
(c) does not provide for any payment of principal prior to the
final scheduled maturity date for the last repayment of Advances of
either Tranche; and
15
(d) has defaults, covenants and other provisions that comply with
Exhibit E and subordination terms substantially in the form of Exhibit
F.
"Intercreditor Agreement" means the amended and restated Intercreditor
Agreement entered into pursuant to Section 3.01(e) among the Collateral
Agent, the Administrative Agent, the Initial Lender, Ericsson Credit AB as
administrative agent and as initial lender pursuant to the Ericsson Credit
Agreement and the other administrative agents and lenders from time to time
party thereto, as amended, amended and restated, supplemented or otherwise
modified from time to time.
"Interest Period" means:
(a) when the First Eurodollar Method is applicable, for each
Advance comprising part of the same Borrowing, the period commencing
on the date of the initial Advance and ending six months thereafter
and, thereafter, each subsequent six-month period commencing on the
last day of the immediately preceding Interest Period and ending on
the last day of such period; and
(b) when the Second Eurodollar Method is applicable, for each
Advance comprising part of the same Borrowing, the period commencing
on the date of such Advance and ending six months thereafter and,
thereafter, each subsequent six-month period commencing on the last
day of the immediately preceding Interest Period and ending on the
last day of such period;
provided, in each case, that:
(a) in the event the last day of the Interest Period immediately
preceding the Tranche A Termination Date would occur on a day other
than the Tranche A Termination Date, the last day of such Interest
Period shall be shortened to occur on the Tranche A Termination Date;
(b) whenever the last day of any Interest Period would otherwise
occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next-succeeding
Business Day; provided that, if such extension would cause the last
day of such Interest Period to occur in the next-following calendar
month, the last day of such Interest Period shall occur on the
next-preceding Business Day; and
(c) whenever the last day of any Interest Period occurs on a day
of an initial calendar month for which there is no numerically
corresponding day in the sixth calendar month thereafter, such
Interest Period shall end on the last Business Day of such sixth
calendar month.
16
"Intermediate Holding Company Security Agreement" means a security
agreement of an Intermediate Holding Company Subsidiary in favor of the
Collateral Agent and the Lenders entered into pursuant to Section
5.01(k)(ii), as amended, modified or supplemented from time to time.
"Intermediate Holding Company Subsidiary" means any Subsidiary of the
Borrower that:
(a) has no assets other than (i) capital stock of an Operating
Subsidiary or Intermediate Holding Company Subsidiary, and (ii)
Investments permitted under Section 5.02(k)(iii)(B) and (iii)
intercompany loans made to such Subsidiaries that are permitted under
Section 5.02(k)(vii);
(b) has no Debt or other liabilities other than intercompany
loans permitted under Section 5.02(a)(v); and
(c) is primarily engaged in the business of holding the capital
stock of or Investments in an Operating Subsidiary or Intermediate
Holding Company Subsidiary.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"Investment" in any Person means any loan or advance to such Person,
any purchase or other acquisition of any capital stock, warrants, rights,
options, obligations or other securities of such Person, any capital
contribution to such Person or any other investment in such Person,
including without limitation any arrangement pursuant to which the investor
incurs Debt of the types referred to in clauses (a) and (i) of the
definition of "Debt" in respect of such Person.
"Judgment Currency" has the meaning set forth in Section 8.11(c)(ii).
"Lender Party" means any Lender or the Administrative Agent.
"Lenders" means the Initial Lender and each Person that shall become a
Lender hereunder pursuant to Section 8.07.
"Lenders' Pro Rata Portion" means, at any time and with respect to any
amount, the Lenders' pro rata portion of such amount, calculated in
proportion with the outstanding principal amounts owing at such time by the
Borrower under the Permitted Loan Agreements (as defined in the
Intercreditor Agreement).
17
"Lending Office" means, with respect to any Lender, the office of such
Lender specified as its "Lending Office" opposite its name on the signature
page hereto or in the Assignment and Acceptance pursuant to which it became
a Lender, or such other office of such Lender as such Lender may from time
to time specify to the Borrower and the Administrative Agent.
"LIBOR" means, with respect to any Interest Period, an interest rate
per annum equal to the rate per annum obtained by the arithmetic mean
(rounded upwards to the nearest 1/16th of 1%) of the offered rates for
deposits in United States Dollars in approximately the same amount as such
Advance and having a tenor equal to the duration of such Interest Period,
commencing on the first day of such Interest Period, as such rates appear
on the "Reuters Screen LIBO Page" at approximately 11:00 A.M. (London time)
on the second Business Day preceding the first day of such Interest Period,
if at least two such offered rates appear on the Reuters Screen LIBO Page.
If fewer than two offered rates appear on the Reuters Screen LIBO Page on
such interest determination date, the Administrative Agent will request the
principal London offices of each of the Reference Banks to provide the
Administrative Agent with its offered quotations for deposits in United
States Dollars in approximately the same amount as such Advance and having
a tenor equal to the duration of such Interest Period, commencing on the
first day of such Interest Period, to prime banks in the London interbank
market at approximately 11:00 A.M. (London time) on such interest
determination date. If at least two such quotations are provided, LIBOR
shall be the arithmetic mean (rounded upwards to the nearest 1/16th of 1%)
of such quotations. If one such quotation is provided, LIBOR shall be the
rate mentioned in such quotation. If no such quotations are provided, LIBOR
shall be indeterminable.
"Licenses" means, at any time, any license or spectrum right listed at
such time on Schedule 4.01(y) hereof, as amended pursuant to Section
5.03(u), and all other licenses and spectrum rights (other than licenses
relating to general business activities and the ownership and use of
property applicable to persons generally and not specifically required to
engage in business of the type proposed to be conducted by the Borrower and
its Subsidiaries) held by the Borrower and its Subsidiaries providing for
the right to operate the Networks in the Territory.
"Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including without limitation the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
18
"Loan Documents" means this Agreement, the Notes issued hereunder, the
Security Agreements, the Intercreditor Agreement, any Guaranty, the
Collateral Agent Letter and the Blocked Account Letter Agreements.
"Loan Parties" means the Borrower and any Guarantor.
"Margin Stock" has the meaning specified in Regulation U.
"Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, or performance of
the Borrower and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its
Subsidiaries taken as a whole,
(b) the ability of the Borrower to perform its payment
Obligations under the Loan Documents, or
(c) the validity or enforceability of any Lien in favor of the
Agents or the Lenders or the validity or enforceability of any Loan
Document.
"Material Assets" means, with respect to any Person, an asset or
assets having either individually or in the aggregate a fair market value
of $2,000,000 or more.
"Material Contract" means, with respect to the Borrower and each of
its Subsidiaries, each contract to which the Borrower or such Subsidiary,
as the case may be, is a party involving aggregate consideration payable to
or by the Borrower or such Subsidiary, as the case may be, of $5,000,000 or
more in any calendar year.
"Material License" means, at any time, any License listed at such on
Schedule 4.01(ii) hereof, as amended pursuant to Section 5.03(u), and all
other Licenses held by the Borrower and its Subsidiaries with respect to
the ownership and operation of digital wireless local loop data networks
constituting a portion of a Network in each of the Core Territories as well
as any other part of the Territory that are necessary for the Borrower to
fulfill the financial and operational projections set forth in the
Borrower's business plan dated October 29, 1999, including all Licenses
with respect to rights to use spectrum in the 15 GHz, 18 GHz, 23 GHz and 38
GHz bands.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
19
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any
of the preceding five plan years made or accrued an obligation to make
contributions.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and at least one Person other than the
Loan Parties and the ERISA Affiliates or (b) was so maintained and in
respect of which any Loan Party or any ERISA Affiliate could have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were
to be terminated.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any asset or the sale or issuance of any Debt or
capital stock or other ownership or profit interest, any securities
convertible into or exchangeable for capital stock or other ownership or
profit interest or any warrants, rights, options or other securities to
acquire capital stock or other ownership or profit interest by any Person,
or any Extraordinary Receipt received by or paid to or for the account of
any Person, the aggregate amount of cash received from time to time
(whether as initial consideration or through payment or disposition of
deferred consideration) by or on behalf of such Person in connection with
such transaction after deducting therefrom only (without duplication):
(a) reasonable and customary brokerage commissions, underwriting
fees and discounts, legal fees, finder's fees and other similar fees
and commissions and
(b) the amount of taxes payable in connection with or as a result
of such transaction,
in each case to the extent, but only to the extent, that the amounts so
deducted are, at the time of receipt of such cash, actually paid to a
Person that is not an Affiliate of such Person or any Loan Party or any
Affiliate of any Loan Party and are properly attributable to such
transaction or to the asset that is the subject thereof.
"Net Income" means for any period the Consolidated net income or net
loss, as the case may be, of Borrower and its Subsidiaries, excluding
extraordinary gains and losses, in each case for such period and as
determined in accordance with GAAP.
"Network" has the meaning specified in the recitals to this Agreement.
20
"Note" means a promissory note of the Borrower payable to the order of
any Lender, in substantially the form of Exhibit A, evidencing the
aggregate Debt of the Borrower to such Lender resulting from the Advances
made by such Lender.
"Notice of Borrowing" has the meaning specified in Section 2.02.
"Obligation" means, with respect to any Person, any payment,
performance or other obligation of such Person of any kind, including,
without limitation, any liability of such Person 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 6.01(g). Without limiting the generality
of the foregoing, the Obligations of the Loan Parties under the Loan
Documents include (a) the obligation to pay principal, interest, charges,
expenses, fees, attorneys' fees and disbursements, indemnities and other
amounts payable by any Loan Party under any Loan Document and (b) the
obligation of any Loan Party to reimburse any amount in respect of any of
the foregoing that any Lender Party, in its sole discretion, may elect to
pay or advance on behalf of such Loan Party.
"Operating Subsidiary" means any Subsidiary of the Borrower engaged in
the business of operating one or more Networks.
"Operating Subsidiary Security Agreement" means a security agreement
of an Operating Subsidiary in favor of the Collateral Agent and the Lenders
entered into pursuant to Section 5.01(k)(ii), as amended, modified or
supplemented from time to time.
"Other Secured Creditors" means Secured Creditors other than the
Lenders.
"Parent" means Diginet Americas, Inc.
"PBGC" means the Pension Benefit Guaranty Corporation (or any
successor).
"Permitted Liens" means such of the following as to which no
enforcement, collection, execution, levy or foreclosure proceeding shall
have been commenced:
(a) Liens for taxes, assessments and governmental charges or
levies to the extent not required to be paid under Section 5.01(b)
hereof;
(b) Liens imposed by law, such as materialmen's, mechanics',
carriers', workmen's and repairmen's Liens and other similar Liens
arising in the ordinary
21
course of business securing obligations that are not overdue for a
period of more than 30 days;
(c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or
statutory obligations; and
(d) easements, rights of way and other encumbrances on title to
real property that do not render title to the property encumbered
thereby unmarketable or materially adversely affect the use of such
property for its present purposes.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association,
joint venture, limited liability company or other entity, or a government
or any political subdivision or agency thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Project" has the meaning specified in the recitals of this Agreement.
"Reference Banks" means Citibank plc, Barclays Bank and The Chase
Manhattan Bank.
"Register" has the meaning specified in Section 8.07(c).
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Regulatory Permits" means all permits needed to construct, install,
commission, service, maintain and operate the Networks in each Core
Territory.
"Required Lenders" means at any time Lenders holding at least a
majority in interest of the sum of the then-outstanding aggregate unpaid
principal amount of the Advances owing to Lenders and then-outstanding
undrawn Commitments (including any Commitments not then available to be
drawn).
"Restricted Payment" means any distribution of the Borrower or any of
its Subsidiaries (in cash, property or obligations) on, or other payments
on account of, or the setting apart of money for a sinking or other
analogous fund for, or the purchase, redemption, retirement, prepayment or
other acquisition of
22
(a) any portion of any membership or other equity interest in the
Borrower or of any warrants, options or other rights to acquire any
such membership or equity interest (or to make any payments to any
Person where the amount thereof is calculated with reference to fair
market or equity value of the Borrower or any of its Subsidiaries), or
(b) any Intercompany Mirror Subordinated Debt or Subordinated
Debt.
"Revenue" means, for any period, Consolidated revenue of the Borrower
and its Subsidiaries for such period as determined in accordance with GAAP.
"S&P" means Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"Second Eurodollar Method" means the terms and provisions of this
Agreement applicable to Advances when the Second Eurodollar Method is to be
applied pursuant to Section 2.14.
"Secured Creditors" means creditors of the Borrower or its
Subsidiaries holding Debt of the Borrower secured by Shared Liens.
"Security Agreement" means the Borrower Security Agreement, any
Intermediate Holding Company Security Agreement, any Operating Subsidiary
Security Agreement or other security agreement entered into pursuant to
this Agreement in favor of the Collateral Agent and the Lenders, as
amended, amended and restated, modified or supplemented from time to time,
and any other agreement that creates or purports to create a Lien in favor
of the Collateral Agent for the benefit of the Lenders or in favor of the
Lenders.
"Securities Act" has the meaning set forth in Section 2.08(b)(iv).
"Shared Liens" means Liens securing Debt permitted pursuant to Section
5.02(a)(vii) and (viii).
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any
Loan Party or any ERISA Affiliate and no Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which
any Loan Party or any ERISA Affiliate could have liability under Section
4069 of ERISA in the event such plan has been or were to be terminated.
23
"Solvent" means, with respect to any Person on a particular date, that
on such date:
(a) the fair value of the property of such Person is greater than
the total amount of liabilities, including without limitation
contingent liabilities, of such Person,
(b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay
as such debts and liabilities mature, and
(c) such Person is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which such
Person's property would constitute an unreasonably small capital.
"Subordinated Debt" means any Debt of the Borrower owed to the Parent
that is subordinated to the Advances pursuant to a Subordination Agreement.
"Subordination Agreement" means a subordination agreement
substantially in the form of Exhibit G.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which)
more than 50% of:
(a) the issued and outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether at the time capital stock of any
other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such limited
liability company, partnership or joint venture, or
(c) the beneficial interest in such trust or estate,
is at the time directly or indirectly owned or controlled by such Person,
by such Person and one or more of its other Subsidiaries or by one or more
of such Person's other Subsidiaries.
"Supermajority Lenders" means at any time Lenders owed at least a
66 2/3% in interest of the sum of the then-outstanding aggregate unpaid
principal amount of the
24
Advances owing to Lenders and then-outstanding undrawn Commitments
(including any Commitments not then available to be drawn).
"Supply Agreement" has the meaning specified in the recitals to this
Agreement.
"Territory" has the meaning specified in the recitals to this
Agreement.
"Total Cash Debt Service" means for any period scheduled total cash
payments by the Borrower and its Subsidiaries during such period in respect
of interest (plus any indemnities payable in respect of withholding taxes
or stamp duties in respect of such interest payments) and principal in
respect of Debt of the Borrower and its Subsidiaries.
"Total Debt" means, at any date, the aggregate principal amount of
Debt of the Borrower and its Subsidiaries then outstanding.
"Tranche A Advance" has the meaning specified in Section 2.01(a).
"Tranche A Commitment" means, with respect to any Lender at any time,
the amount set forth opposite such Lender's name on the signature pages
hereof or, if such Lender has entered into one or more Assignment and
Acceptances, set forth in the Register maintained by the Administrative
Agent pursuant to Section 8.07(c) as such Lender's "Tranche A Commitment",
as such amount may be reduced from time to time pursuant to Section 2.04.
"Tranche A Effective Date" has the meaning specified in Section
3.01(a).
"Tranche A Facility Fee" has the meaning specified in Section 2.03(c).
"Tranche A Termination Date" means the earlier of the second
anniversary of the Tranche A Effective Date and the date of termination in
whole of the Tranche A Commitments pursuant to Section 2.04 or 6.01.
"Tranche B Advance" has the meaning specified in Section 2.01(b).
"Tranche B Commitment" means, with respect to any Lender at any time:
(a) the amount set forth opposite such Lender's name on the
signature page hereof or, if such Lender has entered into one or more
Assignment and Acceptances, set forth in the Register maintained by
the Administrative Agent pursuant to Section 8.07(c) as such Lender's
"Tranche B Commitment" plus
25
(b) the undrawn amount of such Lender's Tranche A Commitment on
the Tranche A Termination Date,
as such amount may be reduced from time to time pursuant to
Section 2.04.
"Tranche B Effective Date" means, with respect to the Tranche B
Commitments of the Lenders, the earlier of (a) the second anniversary of
the Tranche A Effective Date and (b) the first date, after all Tranche A
Commitments shall have been drawn, on which the Borrower shall have
complied with the covenants set forth in Section 5.04 applicable on such
second anniversary of the Tranche A Effective Date.
"Tranche B Facility Fee" has the meaning specified in Section 2.03(d).
"Tranche B Termination Date" means the earliest of (i) the eighteen
month anniversary of the Tranche B Effective Date, (ii) the forty-two month
anniversary of the Tranche A Effective Date and (iii) the date of
termination in whole of the Tranche B Commitments pursuant to Section 2.04
or 6.01.
"Tributary" has the meaning set forth in Section 5.02(v).
"Vendor" has the meaning specified in the recitals to this Agreement.
"Voice Grade Equivalents" means, at any time, the sum of kilobits per
second in service for each customer at such time, divided by 64 kilobits
per second.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"Welfare Plan" means a welfare plan, as defined in Section 3(1) of
ERISA, that is maintained for employees of any Loan Party or in respect of
which any Loan Party could have liability.
"Wholly Owned Subsidiary" of any Person means any corporation,
partnership, joint venture, limited liability company, trust or estate of
which (or in which) 100% of (a) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of Directors
of such corporation (irrespective of whether at the time capital stock of
any other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (b) the interest in the
capital or profits of such partnership, joint venture or limited liability
company or (c) the beneficial interest in
26
such trust or estate is at the time directly or indirectly owned or
controlled by such Person, by such Person and one or more of its other
Subsidiaries or by one or more of such Person's other Subsidiaries;
provided that, if applicable law prohibits the exercise of such percentage
of direct or indirect ownership or control, the ownership or control held
by such Person and one or more of its other Subsidiaries shall be the
maximum percentage permitted under such applicable law.
"Withdrawal Liability" has the meaning specified in Part I of Subtitle
E of Title IV of ERISA.
"Working Capital Investments" means, as at any date, the difference
(positive or negative) between the amount of current assets (excluding cash
and Cash Equivalents) of the Borrower as of such date minus the amount of
current liabilities (excluding current liabilities in respect of Debt) of
the Borrower as of such date, in each case determined on a consolidated
basis in accordance with GAAP.
SECTION 1.02. 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 1.03. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with United States generally
accepted accounting principles consistent with those consistently applied in the
preparation of the financial statements ("GAAP").
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. The Advances. (a) The Tranche A Advances. Each Lender having
a Tranche A Commitment severally agrees, on the terms and conditions hereinafter
set forth, to make Advances (each, a "Tranche A Advance") to the Borrower from
time to time on any Business Day during the period from the Tranche A Effective
Date until the Tranche A Termination Date in an aggregate amount not to exceed
at any time outstanding such Lender's Tranche A Commitment. Each Borrowing
consisting of Tranche A Advances shall be in an amount not exceeding (i) amounts
owing under invoices issued or accepted by the Vendor pursuant to the Supply
Agreement during the calendar month immediately preceding the date of the
proposed Borrowing and that were not paid with the proceeds of any prior
Borrowing and (ii) interest owing on Borrowings to be paid with the proceeds
thereof. Each such Borrowing shall consist of Advances made on the same day by
the Lenders ratably according to their respective Tranche A Commitments. Amounts
borrowed hereunder and repaid or prepaid may not be reborrowed.
27
(b) The Tranche B Advances. Each Lender having a Tranche B Commitment
severally agrees, on the terms and conditions hereinafter set forth, to make
Advances (each, a "Tranche B Advance") to the Borrower from time to time on any
Business Day during the period from the Tranche B Effective Date until the
Tranche B Termination Date in an aggregate amount not to exceed at any time
outstanding such Lender's Tranche B Commitment. Each Borrowing consisting of
Tranche B Advances shall be in an amount not exceeding (i) amounts owing under
invoices issued or accepted by the Vendor pursuant to the Supply Agreement
during the calendar month immediately preceding the date of the proposed
Borrowing and that were not paid with the proceeds of any prior Borrowing and
(ii) interest owing on Borrowings to be paid with the proceeds thereof. Each
such Borrowing shall consist of Advances made on the same day by the Lenders
ratably according to their respective Tranche B Commitments. Amounts borrowed
hereunder and repaid or prepaid may not be reborrowed.
SECTION 2.02. Making the Advances. (a) Each Borrowing shall be made on
notice, given not later than 11:00 A.M. (New York City time) on the third
Business Day prior to the date of the proposed Borrowing by the Borrower to the
Administrative Agent; provided that, except with respect to Borrowings the
proceeds of which shall be used to pay interest owing on Borrowings as permitted
hereunder:
(i) the Borrower may not give more than one such notice in any
calendar month; and
(ii) for any Borrowing proposed to be made after December 31, 1999,
the date of each Borrowing shall be the twentieth day of each calendar
month; provided that if such date is not a Business Day, the date of
Borrowing shall be the next Business Day.
The Administrative Agent shall give to each Lender prompt notice thereof by
telecopier or telex. Each such notice of a Borrowing (a "Notice of Borrowing")
shall be in writing, in substantially the form of Exhibit B, specifying therein:
(A) the requested date of such Borrowing,
(B) the requested aggregate amount of such Borrowing,
(C) the Vendor's invoices to be paid with the proceeds of such
Borrowing, the respective amounts of such invoices to be paid and the
aggregate amount of such invoices to be paid, and
(D) any payments of interest owing on Borrowings to be paid with the
proceeds of such Borrowing as permitted hereunder.
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Each Lender having an applicable Commitment to fund an Advance shall, before
11:00 A.M. (New York City time) on the date of such Borrowing, make available
for the account of its Lending Office to the Administrative Agent at the
Administrative Agent's Account, in same day funds, such Lender's ratable portion
of such Borrowing; provided that if a Commitment is assigned by the Initial
Lender after receipt of a Notice of Borrowing but prior to the Borrowing related
thereto (any such assigned Commitment, a "Fronting Commitment"), and the
Assignment and Acceptance relating thereto specifies such assigned Commitment is
a Fronting Commitment, the Initial Lender's ratable portion of such Borrowing
shall equal (w) the amount the Initial Lender would have funded in respect of
such Borrowing calculated without giving effect to such assignment minus (x) the
amount of such Fronting Commitment, and the assignee's ratable portion of such
Borrowing shall equal (y) the amount such assignee would have funded in respect
of such Borrowing calculated without giving effect to any assignment under which
such assignee was assigned a Fronting Commitment plus (z) the amount of such
Fronting Commitment. After the Administrative Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Administrative Agent will make such funds available to the Borrower. The
Borrower irrevocably directs the Administrative Agent to make available to the
Borrower the portion of any Borrowing to be used to pay amounts owing to the
Vendor, as specified in the related Notice of Borrowing to such account as
notified to the Administrative Agent in the related Notice of Borrowing and to
pay the portion to of any Borrowing to be used to pay interest owing to the
Lenders to the extent permitted hereunder, as specified in the related Notice of
Borrowing, to the Lenders entitled thereto; provided that, if such account is
not with the Administrative Agent such Borrowing shall be deemed to have been
made when the Administrative Agent shall have initiated the transfer of funds
comprising such Borrowing to such account.
(b) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower. The Borrower shall indemnify each Lender against any loss, cost or
expense incurred by such Lender as a result of any failure to fulfill on or
before the date specified in such Notice of Borrowing for such Borrowing the
applicable conditions set forth in Article III, including (without limitation)
any loss, cost or expense incurred by reason of the liquidation or reemployment
of deposits or other funds acquired by such Lender to fund the Advance to be
made by such Lender as part of such Borrowing when such Advance, as a result of
such failure, is not made on such date. The loss to any Lender attributable to
any such failure shall be deemed to be an amount determined by such Lender to be
equal to the excess, if any, of (i) the amount of interest that such Lender
would pay for a deposit equal to the principal amount of the applicable
Eurodollar Rate Advance not borrowed for the duration of the Interest Period
that would have resulted from such borrowing if the interest rate payable on
such deposit were equal to the Eurodollar Rate for such Interest period, over
(ii) the amount of interest that such Lender would earn on such principal amount
for such period if such Lender were to invest such principal amount for such
period at the interest rate that would be bid by such Lender (or an Affiliate of
such Lender) for dollar deposits from other banks in the eurodollar market at
the commencement
29
of such period. A certificate as to the amount of such loss, cost or expense,
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(c) Unless the Administrative Agent shall have received notice from a
Lender that has an applicable Commitment prior to the date of any Borrowing that
such Lender will not make available to the Administrative Agent such Lender's
ratable portion of such Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the date
of such Borrowing in accordance with subsection (a) of this Section 2.02 and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that such
Lender shall not have so made such ratable portion available to the
Administrative Agent, such Lender and the Borrower severally agree to repay to
the Administrative Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Administrative
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to Advances comprising such Borrowing and (ii) in the case of such Lender,
the Federal Funds Rate. If such Lender shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute such Lender's
Advance as part of such Borrowing for purposes of this Agreement.
(d) The failure of any Lender obligated to make an Advance to make such
Advance to be made by it as part of any Borrowing shall not relieve any other
Lender of its obligation, if any, hereunder to make its Advance on the date of
such Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make any Advance to be made by such other Lender on the date of any
Borrowing.
SECTION 2.03. Fees. (a) Tranche A Commitment Fee. The Borrower shall pay to
the Administrative Agent for the account of each Lender having a Tranche A
Commitment a commitment fee on the average daily unused portion of each Lender's
Tranche A Commitment from the Tranche A Effective Date in the case of the
Initial Lender and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other such
Lender, until the Tranche A Termination Date at the rate of 1.10 % per annum,
payable in cash on the last day of each Interest Period or, in the event no
Advance is then outstanding, in arrears semi-annually on the last Business Day
of each of June and December, commencing on December 31, 1999, and on the
Tranche A Termination Date.
(b) Tranche B Commitment Fee. The Borrower shall pay to the Administrative
Agent for the account of each Lender having a Tranche B Commitment a commitment
fee on the average daily unused portion of such Lender's Tranche B Commitment,
from the Tranche B Effective Date, in the case of each Person that is such a
Lender on such date, and from the effective date specified in the Assignment and
Acceptance pursuant to which it became a Lender in the case of each other such
Lender, until the Tranche B Termination Date at
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the rate of 1.10% per annum, payable in cash on the last day of each Interest
Period or, in the event no Advance is then outstanding, in arrears semi-annually
on the last Business Day of each of June and December, commencing on June 30,
2001, and on the Tranche B Termination Date.
(c) Tranche A Facility Fee. The Borrower shall pay to the Administrative
Agent for distribution to the Initial Lender, in cash, on the Tranche A
Effective Date, a one-time facility fee (the "Tranche A Facility Fee") of 1.10%
of the Initial Lender's Tranche A Commitment.
(d) Tranche B Facility Fee. The Borrower shall pay to the Administrative
Agent for distribution to each Lender that has a Tranche B Commitment, in cash,
on the Tranche B Effective Date, a one-time facility fee (the "Tranche B
Facility Fee") of 1.10% of such Tranche B Lender's Tranche B Commitment, other
than any portion thereof reflecting the transfer of any undrawn portion of such
Lender's Tranche A Commitment on the Tranche A Termination Date.
(e) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent for its own account the fee separately agreed with the
Administrative Agent.
SECTION 2.04. Termination or Reduction of the Commitments. (a) The Borrower
shall have the right, upon at least 10 Business Days' notice to the
Administrative Agent, to terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders; provided that each
partial reduction shall be in the aggregate amount of $3,000,000 or an integral
multiple of $1,000,000 in excess thereof.
(b) On any date on which a mandatory prepayment of Advances would be
required to be prepaid pursuant to Section 2.08(b), the Commitments shall be
automatically reduced by an amount equal to the excess, if any, of the aggregate
principal amount of the Advances that would be required to be prepaid on such
date if the Commitments were fully drawn (whether or not in fact available for
draw on such date) over the aggregate principal unpaid amount of the Advances
then outstanding.
SECTION 2.05. Repayment of Advances. (a) Repayment of Tranche A Advances.
The Borrower shall repay to the Administrative Agent for the ratable account of
the Lenders that have made Tranche A Advances the aggregate outstanding
principal amount of the Tranche A Advances in six installments payable on the
last day of every sixth calendar month after the second anniversary of the
Tranche A Effective Date each in an amount equal to the product obtained by
multiplying (i) the unpaid principal amount of such Tranche A Advances
outstanding on the Tranche A Termination Date by (ii) 16-2/3%; provided that the
last such installment shall be in an amount necessary to repay in full the
aggregate then-unpaid principal amount of the Tranche A Advances. Each repayment
shall be applied to the unpaid principal amount of Tranche A Advances ratably
across all Borrowings. At the time of such repayment,
31
the Borrower also will pay accrued and unpaid interest owing on the principal
amount of the Tranche A Advances then being repaid.
(b) Repayment of Tranche B Advances. The Borrower shall repay to the
Administrative Agent for the ratable account of the Lenders that have made
Tranche B Advances the aggregate outstanding principal amount of the Tranche B
Advances in seven installments payable on the last day of every sixth calendar
month after the eighteen month anniversary of the Tranche B Effective Date each
in an amount equal to the product obtained by multiplying (a) the unpaid
principal amount of such Tranche B Advances outstanding on the Tranche B
Termination Date by (b) 14.29%; provided that the last such installment shall be
in an amount necessary to repay in full the unpaid principal amount of the
Tranche B Advances. Each repayment shall be applied to the unpaid principal
amount of Tranche B Advances ratably across all Borrowings. At the time of such
repayment, the Borrower also will pay accrued and unpaid interest owing on the
principal amount of the Tranche B Advances then being repaid.
SECTION 2.06. Interest. (a) Scheduled Interest. Except as otherwise
provided in Section 2.09, the Borrower shall pay interest on the unpaid
principal amount of each Advance owing to each Lender from the date of such
Advance until such principal amount shall be paid in full, at a rate per annum
equal at all times during each Interest Period for such Advance to the sum of
(x) the Eurodollar Rate for such Interest Period for such Advance plus (y)
5.75%, payable in arrears on the last day of such Interest Period and on the
date such Advance shall be paid in full.
(b) Default Interest. Upon the occurrence and during the continuance of an
Event of Default under Section 6.01(a), the Borrower shall pay interest on (i)
the unpaid principal amount of each Advance owing to each Lender, payable in
arrears on the dates referred to in clause (a) above or Section 2.09(c) or (d)
and on demand, at a rate per annum equal at all times to 2% per annum above the
rate per annum required to be paid on such Advance pursuant to clause (a) above
or Section 2.09(c) or (d) and (ii) to the fullest extent permitted by law, the
amount of any interest, fee or other amount payable hereunder that is not paid
when due, from the date such amount shall be due until such amount shall be paid
in full, payable in arrears on the date such amount shall be paid in full and on
demand, at a rate per annum equal at all times to 2% per annum above the rate
per annum required to be paid on Advances pursuant to clause (a) above.
SECTION 2.07. Interest Rate Determination. The Administrative Agent shall
give prompt notice to the Borrower and the Lenders of the applicable interest
rate determined by the Administrative Agent for purposes of Section 2.06(a) or
Section 2.09(c) or (d) prior to the commencement of each Interest Period;
provided that any failure by the Administrative Agent to give such notice shall
not affect such applicable interest rate or the Borrower's obligations
hereunder, or give rise to any liability on behalf of the Administrative Agent.
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SECTION 2.08. Prepayments. (a) Optional Prepayments. The Borrower may, upon
at least 10 Business Days' notice to the Administrative Agent stating the
proposed date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding principal amount of
the Advances; provided that (i) each partial prepayment shall be in an aggregate
principal amount of $3,000,000 or an integral multiple of $1,000,000 in excess
thereof and (ii) the Borrower shall be obligated to reimburse the Lenders in
respect thereof pursuant to Section 8.04(c).
(b) Mandatory Prepayments. (i) Sales of Assets. The Borrower shall, on each
date on which the Borrower or any Subsidiary thereof receives any Net Cash
Proceeds from the sale, lease, transfer or other disposition (other than
commercial sales in the ordinary course of business), of any Material Assets of
the Borrower or any Subsidiary thereof, prepay an aggregate principal amount of
the Advances equal to the Lenders' Pro Rata Portion of such Net Cash Proceeds
(or, if less, the aggregate principal amount of all Advances); provided that the
Borrower shall not be required to make any prepayment pursuant to this
subsection from any such Net Cash Proceeds it intends to apply to the purchase
of any Capital Assets so long as:
(A) the Borrower shall have notified the Administrative Agent of such
intent by the date on which such prepayment otherwise would be required;
(B) the Borrower shall have purchased such Capital Assets within 180
days after the date the Borrower or a Subsidiary thereof received such Net
Cash Proceeds; and
(C) the Borrower shall have provided the Administrative Agent with
evidence satisfactory to the Administrative Agent that such Capital Assets
were purchased within such 180-day period.
If the Borrower shall not have made a prepayment pursuant to this subsection
because of the proviso hereto and shall not have fulfilled the conditions set
forth in such proviso within the period specified therein, it shall make the
prepayment required by this subsection at the end of such period and the proviso
hereto shall no longer be applicable to such prepayment.
(ii) Insurance Recoveries. The Borrower shall, on each date on which it or
any Subsidiary thereof receives any Net Cash Proceeds from any property and
casualty insurance recovery, prepay an aggregate principal amount of the
Advances equal to the Lenders' Pro Rata Portion of such Net Cash Proceeds (or,
if less, the aggregate principal amount of all Advances); provided that the
Borrower shall not be required to make any prepayment pursuant to this
subsection from any such Net Cash Proceeds it intends to apply to the repair or
replacement of the damaged property so long as:
(A) the Borrower shall have notified the Administrative Agent of such
intent by the date on which such prepayment otherwise would be required;
33
(B) such Net Cash Proceeds shall have been so applied within 60 days
after the date the Borrower or a Subsidiary thereof received such Net Cash
Proceeds; and
(C) the Borrower or any Subsidiary thereof shall have provided the
Administrative Agent with evidence satisfactory to the Administrative Agent
that such Net Cash Proceeds were so applied within such 60-day period.
If the Borrower shall not have made a prepayment pursuant to this subsection
because of the proviso hereto and shall not have fulfilled the conditions set
forth in such proviso within the period specified therein, it shall make the
prepayment required by this subsection at the end of such period and the proviso
hereto shall no longer be applicable to such prepayment.
(iii) Condemnation Recoveries. The Borrower shall, on each date on which it
or any Subsidiary thereof receives any Net Cash Proceeds from any condemnation
proceeds or similar awards received by the Borrower or any Subsidiary thereof in
connection with any governmental taking of assets of the Borrower or any
Subsidiary thereof, prepay an aggregate principal amount of the Advances equal
to the Lenders' Pro Rata Portion of such Net Cash Proceeds (or, if less, the
aggregate principal amount of all Advances); provided that the Borrower shall
not be required to make any prepayment pursuant to this subsection from any such
Net Cash Proceeds it intends to apply to the replacement of the condemned or
taken property so long as:
(A) the Borrower shall have notified the Administrative Agent of such
intent by the date on which such prepayment otherwise would be required;
(B) such Net Cash Proceeds shall have been so applied within 60 days
after the date the Borrower or a Subsidiary thereof received such Net Cash
Proceeds; and
(C) the Borrower or any Subsidiary thereof shall have provided the
Administrative Agent with evidence satisfactory to the Administrative Agent
that such Net Cash Proceeds were so applied within such 60-day period.
If the Borrower shall not have made a prepayment pursuant to this subsection
because of the proviso hereto and shall not have fulfilled the conditions set
forth in such proviso within the period specified therein, it shall make the
prepayment required by this subsection at the end of such period and the proviso
hereto shall no longer be applicable to such prepayment.
(iv) Offering of Debt Securities. The Borrower shall, on each date on which
it or any Subsidiary receives any Net Cash Proceeds from the issuance of any
securities evidencing Debt of the Borrower or a Subsidiary thereof issued (A) to
qualified institutional buyers pursuant to Regulation S under the United States
Securities Act of 1933 (as amended from time to time,
34
the "Securities Act"), (B) under Section 4(2) of the Securities Act or (C) in
accordance with the registration and delivery requirements of Section 5 of the
Securities Act, prepay an aggregate principal amount of the Advances comprising
part of the same Borrowings equal to 50% of the Lenders' Pro Rata Portion of
such Net Cash Proceeds (or, if less, the aggregate principal amount of all
Advances).
(v) Excess Cash Flow. The Borrower shall, within five Business Days of each
date upon which the Borrower is required to furnish to the Lenders its annual
financial statements pursuant to Section 5.03(d), deposit into an escrow account
(the terms of which shall be reasonably satisfactory to the Administrative
Agent) an amount equal to 50% of the Borrower's Excess Cash Flow for the
Borrower's fiscal year reflected in such report (for such fiscal year, the
"Excess Cash Flow Amount"). Upon the last day of the Interest Period during
which such deposit was made, the Borrower shall prepay an aggregate principal
amount of the Advances equal to the Lenders' Pro Rata Portion of such Excess
Cash Flow Amount (or, if the outstanding principal amount of the Advances is
less than the Lenders' Pro Rata Portion of such Excess Cash Flow Amount on such
day, the aggregate principal amount of all Advances). Any amounts remaining in
such escrow amount after such prepayment shall be released to the Borrower
immediately following such prepayment.
(vi) Notice. The Borrower shall give the Administrative Agent at least five
Business Days' prior written notice of (A) each prepayment required by this
Section 2.08(b) and (B) the application of any Net Cash Proceeds pursuant to any
notice delivered in accordance with Section 2.08(b)(ii) or (iii). Such Notice
shall state the aggregate amount of such prepayment or application, as the case
may be, and the date upon which such prepayment or application shall or has been
made.
(c) Mechanics of Prepayments. All prepayments under this Section 2.08 shall
be made together with accrued interest to the date of such prepayment on the
principal amount prepaid and together with any amounts owing to the Lenders
pursuant to Section 8.04(c) in respect of such prepayment. Any prepayment of
Advances pursuant to this Section 2.08 shall be applied to the installments
thereof in inverse order of maturity, ratably across all Advances being so
prepaid. All prepayments under this Section 2.08 shall be made ratably with
prepayments to lenders under the other Permitted Loan Agreements (as defined in
the Intercreditor Agreement), in proportion with the outstanding principal
amounts owing by the Borrower under the Permitted Loan Agreements .
SECTION 2.09. Increased Costs, Etc. (a) If, due to either (i) the
introduction of or any change (other than any change by way of imposition or
increase of reserve requirements included in the Eurodollar Rate Reserve
Percentage) in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or of making, funding
or maintaining Advances
35
(excluding for purposes of this Section 2.09 any such increased costs resulting
from (A) Taxes or Other Taxes (as to which Section 2.11 shall govern) or (B)
changes in the basis of taxation of overall net income or overall gross income
by the jurisdiction or state under the laws of which such Lender is organized or
has its Lending Office or any political subdivision thereof), then the Borrower
shall from time to time, upon demand by such Lender (with a copy of such demand
to the Administrative Agent), pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost; provided that a Lender claiming additional amounts under this
Section 2.09(a) agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to designate a different Lending
Office if the making of such a designation would avoid the need for, or reduce
the amount of, such increased cost that may thereafter accrue and would not, in
the reasonable judgment of such Lender be otherwise disadvantageous to such
Lender. If any Lender becomes entitled to claim any additional amounts pursuant
to this Section 2.09(a), it will promptly notify the Borrower (with a copy of
such notice to the Administrative Agent) of the event by reason of which it has
become so entitled and provide a detailed calculation of the amount to be paid;
provided that no Lender shall be required to disclose in connection with such
calculation any information that it deems to be proprietary or confidential,
including, without limitation, any allocation of internal costs. A certificate
as to the amount of such increased cost, submitted to the Borrower by such
Lender, shall be conclusive and binding for all purposes, absent manifest error.
(b) If any Lender determines that compliance with any law or regulation or
any guideline or request from any central bank or other governmental authority
(whether or not having the force of law) affects or would affect the amount of
capital required or expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is increased by or
based upon the existence of such Lender's commitment to lend hereunder then,
upon demand by such Lender (with a copy of such demand to the Administrative
Agent), the Borrower shall pay to the Administrative Agent for the account of
such Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender in the light of such circumstances, to the
extent that such Lender reasonably determines such increase in capital to be
allocable to the existence of such Lender's commitment to lend hereunder;
provided that, before making any such demand, such Lender will use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Lending Office if the making of such a
designation would allow such Lender or its Lending Office to continue to perform
its obligations to make Advances or to continue to fund or maintain Advances and
would not, in the judgment of such Lender, be otherwise disadvantageous to such
Lender. If any Lender becomes entitled to claim any additional amounts pursuant
to this Section 2.09(b), it will promptly notify the Borrower (with a copy of
such notice to the Administrative Agent) of the event by reason of which it has
become so entitled and provide a detailed calculation of the amount to be paid;
provided that no Lender shall be required to disclose in connection with such
calculation any information that it deems to be proprietary or confidential,
including, without limitation, any allocation of internal costs. A
36
certificate as to such amounts submitted to the Borrower by such Lender shall be
conclusive and binding for all purposes, absent manifest error.
(c) If, with respect to any Advances, a majority in interest of the Lenders
participating in such Advances notify the Administrative Agent that the
Eurodollar Rate for any Interest Period for such Advances will not adequately
reflect the cost to such Lenders of making, funding or maintaining their
Advances for such Interest Period, the Administrative Agent shall forthwith so
notify the Borrower, whereupon (i) each such Advance will automatically, on the
last day of the then existing Interest Period therefor, cease to bear interest
pursuant to Section 2.06(a) and from such date bear interest at a rate per annum
equal at all times to the sum of (A) the Base Rate in effect from time to time
plus (B) 6.25%, payable in arrears semi-annually on the last day of December and
June until the Administrative Agent shall notify the Borrower that such Lenders
have determined that the circumstances causing such suspension no longer exist
and (ii) the Borrower shall pay interest on the unpaid principal amount of each
Advance made after the giving of such notice by the Required Lenders from the
date of such Advance until the earlier of (A) the payment in full of such
Advance and (B) the date upon which the Administrative Agent has notified the
Borrower that such Lenders have determined that the circumstances causing such
suspension no longer exist, at a rate per annum equal to the actual cost
incurred by the Lenders in making such Advance plus 6.25%, payable in arrears
semi-annually on the last day of December and June. A certificate as to the rate
referred to in clause (ii) above submitted to the Borrower by such Lenders shall
be conclusive and binding for all purposes, absent manifest error.
(d) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other governmental
authority shall assert that it is unlawful, for any Lender or its Lending Office
to perform its obligations hereunder to make Advances or to continue to fund or
maintain Advances hereunder, then, on notice thereof and demand therefor by the
Required Lenders to the Borrower through the Administrative Agent, (i) each
Advance will automatically, on such demand, cease to bear interest pursuant to
Section 2.06(a) and from such demand bear interest at a rate per annum equal at
all times to the sum of (A) the Base Rate in effect from time to time plus (B)
6.25%, payable in arrears semi-annually on the last day of each December and
June until the Administrative Agent shall notify the Borrower that such Lender
has determined that the circumstances causing such suspension no longer exist,
and (ii) the Borrower shall pay interest on the unpaid principal amount of each
Advance made after the giving of such notice by the Required Lenders from the
date of such Advance until the earlier of (A) the payment in full of such
Advance and (B) the date upon which the Administrative Agent has notified the
Borrower that such Lenders have determined that the circumstances causing such
suspension no longer exist, at a rate per annum equal to the actual cost
incurred by the Lenders in making such Advance plus 6.25%, payable in arrears
semi-annually on the last day of December and June; provided that, before making
any such demand, such Lender will use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a different
Lending Office if the making of such a designation would allow such Lender or
its Lending
37
Office to continue to perform its obligations to make Advances or to continue to
fund or maintain Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender. A certificate as to the rate referred
to in clause (ii) above submitted to the Borrower by such Lenders shall be
conclusive and binding for all purposes, absent manifest error.
SECTION 2.10. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes issued hereunder not later than 11:00 A.M.
(New York City time) on the day when due in U.S. dollars to the Administrative
Agent at the Administrative Agent's Account in same-day funds. The
Administrative Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or fees ratably (other than
amounts payable pursuant to Section 2.09, 2.11 or 8.04(c)) to the Lenders
entitled thereto for the account of their respective Lending Offices, and like
funds relating to the payment of any other amount payable to any Lender to such
Lender for the account of its Lending Office, in each case to be applied in
accordance with the terms of this Agreement. Upon its acceptance of an
Assignment and Acceptance and recording of the information contained therein in
the Register pursuant to Section 8.07(d), from and after the effective date
specified in such Assignment and Acceptance, the Administrative Agent shall make
all payments hereunder and under the Notes issued hereunder in respect of the
interest assigned thereby to the Lender assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves
and the Borrower shall have no further obligation to such assignee with respect
to such adjustments.
(b) Promptly on request by any Lender, the Borrower will deliver to such
Lender a Note payable to the order of such Lender.
(c) All computations of interest based on the Base Rate shall be made by
the Administrative Agent on the basis of a year of 365 or 366 days, as the case
may be, and all computations of other interest and of 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 hereunder shall be
conclusive and binding for all purposes, absent manifest error.
(d) Whenever any payment hereunder or under the Notes issued hereunder
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
such case be included in the computation of payment of interest or commitment
fee, as the case may be; provided that, if such extension would cause payment of
interest on or principal of Advances to be made in the next following calendar
month, such payment shall be made on the next-preceding Business Day.
38
(e) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Lenders hereunder
that the Borrower will not make such payment in full, the Administrative Agent
may assume that the Borrower has made such payment in full to the Administrative
Agent on such date and the Administrative Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the Borrower
shall not have so made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent, at the Federal Funds Rate.
(f) The obligation of the Borrower to make any payment under this Agreement
or any other Loan Document, including without limitation payments of principal,
interest, fees, costs and expenses due in accordance with the terms of the Loan
Documents, shall be unconditional and absolute, irrespective among other things
of the following:
(i) any set-off, counterclaim, recoupment, deduction, abatement,
suspension, diminution, reduction, defense or other right that the Borrower
may have against the Vendor at any time for any reason whatsoever arising
under or pursuant to the Supply Agreement or otherwise relating to the
purchase of goods, equipment, other property or services from or by the
Vendor;
(ii) any defect in the condition, design, operation or fitness for use
of, or any damage to or loss or destruction of, any equipment or material
provided by the Vendor;
(iii) any actual or alleged default by the Vendor or any other Person
under the Supply Agreement; or
(iv) any other fact or circumstance relating to the Supply Agreement.
SECTION 2.11. Taxes. (a) Any and all payments by the Borrower hereunder or
under the Notes issued hereunder shall be made, in accordance with Section 2.10,
free and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the Administrative
Agent, taxes that are imposed on its overall net income by the United States and
taxes that are imposed on its overall net income (and franchise taxes imposed in
lieu thereof) by the state or foreign jurisdiction under the laws of which such
Lender or the Administrative Agent (as the case may be) is organized or any
political subdivision thereof and, in the case of each Lender, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender's Lending Office or any
political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions,
39
charges, withholdings and liabilities in respect of payments hereunder or under
the Notes being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Administrative Agent, (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) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made hereunder or under the Notes or from the execution,
delivery or registration of, performing under, or otherwise with respect to,
this Agreement, the Notes or the other Loan Documents (hereinafter referred to
as "Other Taxes").
(c) The Borrower shall indemnify each Lender and the Administrative Agent
for and hold it harmless against the full amount of Taxes or Other Taxes
(including without limitation taxes of any kind imposed by any jurisdiction on
amounts payable under this Section 2.11) imposed on or paid by such Lender or
the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
This indemnification shall be made within 30 days from the date such Lender or
the Administrative Agent (as the case may be) makes written demand therefor.
(d) Within 60 days after the date of any payment of Taxes, the Borrower
shall furnish to the Administrative Agent, at its address referred to in Section
8.02, the original or a certified copy of a receipt evidencing such payment. In
the case of any payment hereunder or under the Notes by or on behalf of the
Borrower through an account or branch outside the United States or by or on
behalf of the Borrower by a payor that is not a United States person, if the
Borrower determines that no Taxes are payable in respect thereof, the Borrower
shall furnish, or shall cause such payor to furnish, to the Administrative
Agent, at such address, an opinion of counsel acceptable to the Administrative
Agent stating that such payment is exempt from Taxes. For purposes of this
subsection (d) and subsection (e), the terms "United States" and "United States
person" shall have the meanings specified in Section 7701 of the Internal
Revenue Code or (in the case of a Lender that has certified in writing to the
Administrative Agent that it is not a "bank" as defined in Section 881(c)(3)(A)
of the Internal Revenue Code) form W-8 (and, if such Lender delivers a form W-8,
a certificate representing that such Lender is not a "bank" for purposes of
Section 881(c) of the Internal Revenue Code, is not a 10-percent shareholder
(within the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower and is not a controlled foreign corporation related to the Borrower
(within the meaning of Section 864(d)(4) of the Internal Revenue Code)), as
appropriate, or any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender is exempt from or entitled to a reduced
rate
40
of United States withholding tax on payments pursuant to this Agreement or the
Notes or, in the case of a Lender providing a form W-8, certifying that such
Lender is a foreign corporation, partnership, estate or trust. If the forms
provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Lender provides the appropriate form certifying that a
lesser rate applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such form; provided that,
if at the date of the Assignment and Acceptance pursuant to which a Lender
becomes a party to this Agreement, the Lender assignor was entitled to payments
under subsection (a) in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. If any form or
document referred to in this subsection (d) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001,
4224 or W-8 (or the related certificate described above), that the Lender
reasonably considers to be confidential, the Lender shall give notice thereof to
the Borrower and shall not be obligated to include in such form or document such
confidential information.
(e) For any period with respect to which a Lender has failed to provide the
Borrower with the appropriate form described in Section 2.11(d) (other than if
such failure is due to a change in law occurring subsequent to the date on which
a form originally was required to be provided, or if such form otherwise is not
required under subsection (d) above), such Lender shall not be entitled to
indemnification under Section 2.11(a) or (c) with respect to Taxes imposed by
the United States by reason of such failure; provided that should a Lender
become subject to Taxes because of its failure to deliver a form required
hereunder, the Borrower shall take such steps as the Lender shall reasonably
request to assist the Lender to recover such Taxes.
SECTION 2.12. Sharing of Payments, Etc. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Advances owing to it (other than
pursuant to Section 2.09, 2.11 or 8.04(c)) in excess of its ratable share of
payments on account of the Advances obtained by all the Lenders, such Lender
shall forthwith purchase from the other Lenders such participations in the
Advances owing to them as shall be necessary to cause such purchasing Lender to
share the excess payment ratably with each of them; provided that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender, such purchase from each Lender shall be rescinded and such Lender shall
repay to the purchasing Lender the purchase price to the extent of such recovery
together with an amount equal to such Lender's ratable share (according to the
proportion of (a) the amount of such Lender's required repayment to (b) the
total amount so recovered from the purchasing Lender) of any interest or other
amount paid or payable by the purchasing Lender in respect of the total amount
so recovered. The Borrower agrees that any
41
Lender so purchasing a participation from another Lender pursuant to this
Section 2.12 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. With respect to any reduction or
termination of Commitments pursuant to Section 2.04, the reduction or
termination of the Commitments shall be made ratably among the Commitments of
all Lenders outstanding at the time of such reduction or termination. With
respect to any repayment or prepayment made by the Borrower hereunder other than
scheduled amortization pursuant to Section 2.05, such repayment or prepayment
shall be distributed ratably among all Lenders in proportion with the principal
amount of the Advances held by each such Lender outstanding at the time of such
repayment or prepayment. With respect to any repayment of scheduled amortization
made by the Borrower hereunder pursuant to Section 2.05, such repayments shall
be distributed ratably among all Lenders of the relevant tranche in proportion
with the principal amount of the Advances of such tranche held by each such
Lender of outstanding at the time of such repayment or prepayment.
SECTION 2.13. Use of Proceeds. The proceeds of the Advances shall be
available to the Borrower and its Subsidiaries, directly or indirectly, solely
(a) to make Back-to-Back Loans that shall be used by Operating Subsidiaries to
purchase telecommunications equipment, software, engineering and other services
pursuant to or in accordance with the Supply Agreement and subject to the
limitations set forth therein for the purpose of planning, constructing,
operating and maintaining Networks in the Core Territories, (b) to pay interest
payable to the Lenders on each interest payment date occurring on or prior to
the first anniversary of the Tranche A Effective Date and (c) to pay fees
payable pursuant to Section 2.03 and expenses payable pursuant to Section
8.04(a)(i)(A) and (B), in each case with respect to the Lenders. The proceeds of
all Advances to be used as described in clause (a) of the preceding sentence
shall be paid directly to the financial institution providing Back-to-Back Loans
and the proceeds of such Back-to-Back Loans made to Operating Subsidiaries in
Argentina, Brazil and Peru shall at all times be held in Blocked Accounts until
disbursed to pay invoices under the Supply Agreement.
SECTION 2.14. First Eurodollar Method and Second Eurodollar Method. The
First Eurodollar Method shall be applicable at all times until such time as the
Second Eurodollar Method becomes applicable. If there is a Lender in addition to
or other than the Initial Lender (other than an Affiliate of the Initial Lender)
and the Administrative Agent at the direction of any Lender shall have notified
the Borrower that the Second Eurodollar Method shall be applicable, the Second
Eurodollar Method shall become applicable immediately as of the date of such
notice for all new Advances made as of and following the date of such notice.
After becoming applicable, the Second Eurodollar Method shall remain applicable
at all times thereafter.
SECTION 2.15. Redistribution of Payments. In the event that a repayment
under Section 2.05 or a prepayment under Section 2.08 is required to be
redistributed by the Lenders to the lenders (the "Other Lenders") under another
Permitted Loan Agreement (as defined in the
42
Intercreditor Agreement) pursuant to Section 4.2 or 4.3 of the Intercreditor
Agreement, (i) the Borrower authorizes the Lenders to act as its agent in
connection with such redistribution and make such redistribution to the Other
Lenders on its behalf and acknowledges that any amount so redistributed shall be
deemed not to have been paid by the Borrower to the Lenders in their capacity as
Lenders hereunder and (ii) the Lenders agree to act as agent for the Borrower in
connection with such redistribution and agree to make such redistribution to the
Other Lenders on its behalf. In the event that a repayment or prepayment made by
the Borrower pursuant to another Permitted Loan Agreement to the Other Lenders
party thereto is required to be redistributed by such Other Lenders pursuant to
Section 4.2 or 4.3 of the Intercreditor Agreement, the Lenders acknowledge that
any amount so redistributed (I) shall have been paid by the Other Lenders acting
as agent for the Borrower in connection with such redistribution, (II) shall be
deemed to have been paid by the Borrower to the Lenders in respect of the
Advances pursuant to Section 2.05 or 2.08, as the case may be, and (III) shall
be allocated among the Lenders in accordance with Section 2.12.
ARTICLE III
CONDITIONS TO EFFECTIVENESS AND LENDING
SECTION 3.01. Conditions Precedent to Effectiveness of Section 2.01(a).
Section 2.01(a) of this Agreement shall become effective on and as of the first
date (the "Tranche A Effective Date") on which the following conditions
precedent have been satisfied:
(a) There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party or any of their Subsidiaries pending
or, to the best of the Borrower's knowledge, threatened before any court,
governmental agency or arbitrator that (i) could be reasonably likely to
have a Material Adverse Effect other than the matters described on Schedule
3.01(a)(i) hereto (the "Disclosed Litigation") or (ii) purports to
adversely affect the legality, validity or enforceability of any material
provision of this Agreement, any Note or any other Loan Document or the
consummation of any of the transactions contemplated hereby.
(b) All material governmental and third party consents and approvals
necessary in connection with the transactions contemplated hereby which are
required to be obtained by the Borrower in connection with its activities
being conducted on such date and all Regulatory Permits shall have been
obtained and shall remain in effect; all applicable waiting periods shall
have expired without any action being taken by any competent authority.
(c) The Borrower shall have a minimum amount of $145,000,000 in fully
paid-up equity capital, which shall include expenditures of the Parent
prior to the date
43
hereof in connection with the development of the business of the Borrower
and its Subsidiaries.
(d) The Supply Agreement shall have been duly executed and delivered
and be in full force and effect and there shall be no material default
thereunder, and the Administrative Agent shall have received a certified
copy thereof.
(e) The Intercreditor Agreement shall have been duly executed and
delivered and be in full force and effect and there shall be no material
default thereunder, and the Administrative Agent shall have received a
certified copy thereof.
(f) The Collateral Agent Letter shall have been duly executed and
delivered and be in full force and effect, and the Administrative Agent
shall have received a certified copy thereof.
(g) All stock and capital contributions of the Borrower's Subsidiaries
shall be owned by the Borrower or one or more of the Borrower's
Subsidiaries, in each case free and clear of any Liens (except for the
Liens created pursuant to the Security Agreements), except as set forth in
Section 4.01(b).
(h) The Collateral Agent and/or the Lenders shall have a valid and
perfected first-priority Lien and security interest in the capital stock
and capital contributions of all the Operating Subsidiaries and, to the
extent permitted by applicable law and subject to Permitted Liens, in the
Collateral referred to in the Security Agreements, all searches necessary
or desirable in connection with such Liens and security interests having
been duly made.
(i) The Administrative Agent shall have received on or before the
Tranche A Effective Date the following, each dated such day, in form and
substance satisfactory to the Administrative Agent and (except for the
Notes) in sufficient copies for each Lender:
(i) Notes payable to the order of the Initial Lender.
(ii) A business plan, in form and substance satisfactory to the
Lenders.
(iii) A copy of the annual audit report for the Borrower for the
most recent fiscal year of the Borrower and its Subsidiaries,
containing Consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such fiscal year and
Consolidated and consolidating statements of income and cash flows of
the Borrower and its Subsidiaries for such fiscal year.
44
(iv) Consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of each fiscal quarter
since the most recent fiscal year of the Borrower and Consolidated and
consolidating statements of income and cash flows of the Borrower and
its Subsidiaries for the period commencing at the end of the most
recent fiscal year of the Borrower and ending with the end of its most
recent fiscal quarter.
(v) Evidence that the Borrower and its Subsidiaries have obtained
Licenses sufficient to permit the operation of the Networks up until
the seventh anniversary of the date hereof, in form and substance
satisfactory to the Lenders.
(vi) Certificates of the Borrower and each of its Subsidiaries
executing a Guaranty or Security Agreement on or prior to the Tranche
A Effective Date, in each case attaching the charter of such Person
and each amendment thereto on file in such office and certifying that
(A) such charter is a true and complete copy thereof, (B) such
amendments are the only amendments to such charter, (C) such Person
has paid all franchise taxes to the date of such certificate and (D)
such Person is duly organized and, if applicable, in good standing
under the laws of its jurisdiction of incorporation.
(vii) Certificates of each of the Borrower and its Subsidiaries
executing a Guaranty or Security Agreement on or prior to the Tranche
A Effective Date, signed on behalf of each such Person by the
President, a Vice President, the Secretary or any Assistant Secretary
of each such Person (the statements made in such certificate shall be
true and correct on and as of the Tranche A Effective Date),
certifying as to:
(A) the absence of any amendments to the charter of each
such Person since the date of the certificate referred to in
3.01(i)(vi);
(B) a true and correct copy of the by-laws of such Person as
in effect on the Tranche A Effective Date;
(C) the due incorporation and good standing of such Person
as a corporation or a limited liability company, as the case may
be, under the laws of the jurisdiction of its organization and
the absence of any proceeding for the dissolution or liquidation
of such Person;
(D) that attached thereto is a true and complete copy of
resolutions duly adopted by the board of directors or the general
assembly of partners, as the case may be, of such Person
authorizing the execution,
45
delivery and performance of each Loan Document to which such
Person is a party;
(E) in the case of each such Person, that such resolutions
have not been revoked, annulled or modified in any manner and are
in full force and effect; and
(F) in the case of each such Person, the incumbency and
specimen signature of each officer of such Person executing each
of the Loan Documents to which such Person is a party, on behalf
of such Person, and a certification of another officer of each
such Person as to the signature of the officers signing
certificates referred to in this subclause (vii).
(viii) Security Agreements, in form and substance reasonably
satisfactory to the Administrative Agent, duly executed by the
Borrower, each Intermediate Holding Company Subsidiary and each
Operating Subsidiary party thereto, together with:
(A) certificates representing any Pledged Shares referred to
therein;
(B) executed copies of any proper financing statements and
other filings and registrations filed in order to perfect and
protect the Liens created by the Security Agreements, covering
the Collateral described therein, and any acknowledgments which
may be customarily delivered by the appropriate authorities of
the jurisdictions in which such Liens have been perfected and
protected, in each case in form and substance satisfactory to the
Lenders;
(C) copies of any Assigned Agreements referred to in the
Security Agreements; and
(D) evidence that all other action necessary as of such date
in order to perfect and protect the Liens created by the Security
Agreements has been taken.
(ix) Guaranties duly executed by each Operating Subsidiary and
Intermediate Holding Company Subsidiary.
46
(x) A favorable opinion of Stroeter & Ohno Advogados Associados,
Brazilian counsel for the Loan Parties, in form and substance
reasonably satisfactory to the Administrative Agent.
(xi) A favorable opinion of Cibils, Blaquier & Boneo ▇▇▇▇▇▇▇▇,
Argentine counsel for the Loan Parties, in form and substance
reasonably satisfactory to the Administrative Agent.
(xii) A favorable opinion of Posse ▇▇▇▇▇▇▇ & ▇▇▇▇, Colombian
counsel for the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent.
(xiii) A favorable opinion of ▇▇▇▇▇, Fabrega & Fabrega,
Panamanian counsel for the Loan Parties, in form and substance
reasonably satisfactory to the Administrative Agent.
(xiv) A favorable opinion of Miranda & ▇▇▇▇▇, Peruvian counsel
for the Loan Parties, in form and substance reasonably satisfactory to
the Administrative Agent
(xv) A favorable opinion of Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, New
York counsel for the Loan Parties, in form and substance reasonably
satisfactory to the Administrative Agent.
(xvi) A favorable opinion of ▇▇▇▇▇▇▇▇ Guimaraes - Advogados,
Brazilian counsel for the Secured Creditors, in form and substance
reasonably satisfactory to the Administrative Agent.
(xvii) A favorable opinion of Marval, ▇'▇▇▇▇▇▇▇ & Mairal,
Argentine counsel for the Secured Creditors, in form and substance
reasonably satisfactory to the Administrative Agent.
(xviii) A favorable opinion of Arenas, Lopez, Montealgre y
Plazas, Colombian counsel for the Secured Creditors, in form and
substance reasonably satisfactory to the Administrative Agent.
(xix) A favorable opinion of Aleman, Cordero, ▇▇▇▇▇▇▇ & ▇▇▇,
Panamanian counsel for the Secured Creditors, in form and substance
reasonably satisfactory to the Administrative Agent.
47
(xx) A favorable opinion of Estudio ▇▇▇▇ Echecopar ▇▇▇▇▇▇,
Peruvian counsel for the Secured Creditors, in form and substance
reasonably satisfactory to the Administrative Agent.
(xxi) A favorable opinion of Wilson, Sonsini, ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇, U.S. counsel for the Loan Parties, in form and substance
reasonably satisfactory to the Administrative Agent.
(xxii) Copies of process-agent letters for each of the Loan
Parties organized in a jurisdiction outside the United States.
(j) The Borrower shall have paid all accrued fees and expenses of the
Agents and the Lenders (including the accrued fees and expenses of counsel
and local counsel to the Agents and the Lenders).
(k) The Ericsson Credit Agreement shall have become effective on
substantially the same terms and conditions as those contained in this
Agreement.
SECTION 3.02. Conditions Precedent to Each Borrowing. The obligation of
each Lender having a Commitment to make an Advance on the occasion of each
Borrowing shall be subject to the conditions precedent that on the date of such
Borrowing the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing such statements are true):
(a) the representations and warranties contained in Section 4.01 shall
be correct in all material respects on and as of the date of such Borrowing
(or, to the extent stated to relate to an earlier date, as of such earlier
date), before and after giving effect to such Borrowing and to the
application of the proceeds therefrom, as though made on and as of such
date,
(b) no addition or amendment to the authorizations, approvals or other
actions by, and notices or filings with, any governmental authority or
third party set forth on the Schedule 4.01(f) delivered on the Tranche A
Effective Date shall materially adversely affect (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes or any other Loan Document to which it is or is to be
a party or for the consummation of the transactions contemplated hereby and
thereby, (ii) the grant of the Liens granted by any Loan Party pursuant to
this Agreement, the Security Agreements and the Notes (including to the
extent permitted by applicable law and subject to Permitted Liens and
Shared Liens the first-priority nature thereof) other than Permitted Liens
and Shared Liens and (iii) the exercise by the Administrative Agent, the
Collateral Agent or any Lender of its rights under this Agreement, the
Notes or any other
48
Loan Document or of the remedies in respect of the Collateral granted
pursuant to the Security Agreements, in each case as reasonably determined
by the Lenders,
(c) no event shall have occurred and be continuing, or would result
from such Borrowing or from the application of the proceeds therefrom, that
constitutes a Default, and
(d) at any time that the Initial Lender shall have any Commitment
hereunder, the Supply Agreement has not been terminated by Vendor for cause
in accordance with Section 14.2 of the Supply Agreement or by Borrower
without cause, in each case in accordance with the terms thereof,
provided that the provisions of clauses (a), (b) and (c) of this Section 3.02
shall not be applicable with respect to any Borrowing to the extent the proceeds
thereof will be used to pay interest in accordance with Section 2.13
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows as of the Tranche A Effective Date, and
represents and warrants as follows on the date of each Borrowing hereunder:
(a) The Borrower (i) has been duly formed and is validly existing and
in good standing as a corporation under the laws of Delaware with full
corporate power and authority (including without limitation all material
governmental licenses, permits and other approvals) necessary to conduct
its business as described herein, (ii) is duly qualified and is authorized
to do business and is in good standing in each other jurisdiction in which
the conduct of its business requires it to be so qualified or authorized
and (iii) has all requisite corporate power and authority to own its
properties and to carry on its business as now conducted and as proposed to
be conducted.
(b) Set forth on Schedule 4.01(b) hereto as amended from time to time
pursuant to Section 5.03(u) is a complete and accurate list of all
Operating Subsidiaries, Intermediate Holding Company Subsidiaries and
Insignificant Subsidiaries showing (as to each such Subsidiary) whether it
is an Operating Subsidiary, an Intermediate Holding Company Subsidiary or
an Insignificant Subsidiary, the jurisdiction of its incorporation, the
number of shares of each class of capital stock or participations
authorized, and the number outstanding, and the percentage of the
outstanding shares or participations of each such class owned (directly or
indirectly) by the Borrower and the number of shares
49
or participations covered by all outstanding options, warrants, rights of
conversion or purchase and similar rights. All of the outstanding capital
stock or participations of all of the Subsidiaries set forth on Schedule
4.01(b) hereto, as amended from time to time pursuant to Section 5.03(u),
has been fully issued, is fully paid and non-assessable and is owned by the
Borrower or one or more of its Subsidiaries, except as set forth on
Schedule 4.01(b) hereto, free and clear of all Liens, except those created
by the Security Agreements. Each Subsidiary set forth on Schedule 4.01(b)
hereto, as amended from time to time pursuant to Section 5.03(u), (i) is a
corporation or a limited liability company duly organized, validly existing
and, if applicable, in good standing under the laws of the jurisdiction of
its incorporation, (ii) is duly qualified and, if applicable, in good
standing as a foreign corporation in each other jurisdiction in which the
conduct of its business requires it to so qualify and (iii) 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. Other than as set forth in Schedule 4.01(b) hereto, no Person
other than the Borrower has any rights to acquire any capital stock or
participations of any Operating Company Subsidiary or Intermediate Holding
Company Subsidiary of the Borrower during the period when any Advances
shall be outstanding.
(c) Each Loan Party has full corporate power and authority to enter
into, deliver and perform its obligations under this Agreement, the Notes
and each other Loan Document to which it is or is to be a party and to
consummate the transactions contemplated hereby and thereby, and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of this Agreement, the Notes and each other Loan
Document.
(d) The execution, delivery and performance by each Loan Party of this
Agreement, the Notes and each other Loan Document to which it is or is to
be a party and the consummation of the transactions contemplated hereby and
thereby are within its corporate powers and shall not and will not (i)
contravene (A) its organizational documents or (B) any law, rule,
regulation or order or any contractual restriction binding on or affecting
it or (ii) conflict with or result in a breach of, constitute a default
under or result in the creation or imposition of any Lien (except for the
Liens created pursuant to the Loan Documents) upon any of its property or
assets or under any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument to which it is a party or by which it is
bound or to which the property or assets of it is subject, except where
such contravention, conflict, breach, default or failure to comply would
not have a Material Adverse Effect.
(e) No Loan Party is in violation of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach of
any contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument, the violation or breach of which is reasonably likely to
have a Material Adverse Effect.
50
(f) Except as otherwise described on Schedule 4.01 (f) as amended from
time to time pursuant to Section 5.03 (u) no authorization or approval or
other action by, and no notice to or filing with, any governmental
authority or any other third party is required for (i) the due execution,
delivery, recordation, filing or performance by any Loan Party of this
Agreement, the Notes or any other Loan Document to which it is or is to be
a party or for the consummation of the transactions contemplated hereby and
thereby, (ii) the grant of the Liens granted by any Loan Party pursuant to
this Agreement, the Security Agreements, the Blocked Account Letter
Agreements and the Notes (including to the extent permitted by applicable
law and subject to Permitted Liens and Shared Liens the first-priority
nature thereof) other than Permitted Liens and Shared Liens and (iii) the
exercise by the Administrative Agent, the Collateral Agent or any Lender of
its rights under this Agreement, the Notes or any other Loan Document or of
the remedies in respect of the collateral granted pursuant to the Security
Agreements.
(g) This Agreement, the Notes and each other Loan Document to which it
is a party have been duly executed and delivered by the Borrower and, when
executed and delivered hereunder, will constitute legal, valid and binding
obligations of the Borrower and each of its Subsidiaries that is a party
thereto, enforceable against the Borrower and such Subsidiaries in
accordance with their respective terms except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, liquidation, fraudulent
conveyance, reorganization, concordato, moratorium or similar laws now or
hereafter in effect affecting the enforcement of creditors' rights
generally and (ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).
(h) The balance sheet of the Borrower as at September 30, 1999 and the
related statement of income and cash flows of the Borrower for the three
month period then ended, copies of which have been furnished to each
Lender, fairly present in all material respects (subject to year-end audit
adjustments) the financial condition of the Borrower as at such date and
the results of operations of the Borrower for the period ended on such
date, all in accordance with generally accepted accounting principles
applied on a consistent basis. The Consolidated forecasted balance sheets,
income statements and cash flow statements of the Borrower and its
Subsidiaries delivered to the Lenders in connection with the Project were
prepared in good faith on the basis of the assumptions stated therein,
which assumptions the Borrower believes were fair in the light of
conditions existing at the time of delivery of such forecasts, and
represented, at the time of delivery, the Borrower's best estimate of its
future financial performance, it being understood that nothing set forth in
such Consolidated forecasted balance sheets, income statements and cash
flow statements shall be construed as a representation, warranty, covenant,
undertaking, guaranty or assurance by the Borrower or any of its
Subsidiaries as to the future financial or business performance of the
Borrower and its
51
Subsidiaries and that the forward-looking statements contained in such
Consolidated forecasted balance sheets, income statements and cash flow
statements involve known and unknown risks, contingencies, uncertainties
and other factors that may cause the actual results, events or developments
pertaining to the Borrower and its Subsidiaries to be materially and
adversely different from any future results, events or developments
contemplated, expressed or implied by such Consolidated forecasted balance
sheets, income statements and cash flow statements. Since September 30,
1999, there has been no Material Adverse Change.
(i) No information, exhibit or report furnished in writing by (or on
behalf of) the Borrower to the Administrative Agent, the Collateral Agent
or any Lender in connection with the negotiation of the Loan Documents or
pursuant to the terms of the Loan Documents contained at the time when
furnished any untrue statement of material fact or omitted to state a
material fact necessary to make the statements made therein (taken as a
whole) not misleading.
(j) Except as otherwise described on Schedule 3.01(a)(i), there is no
pending or, to the best of the Borrower's knowledge, threatened action,
suit, investigation, litigation or proceeding, including without limitation
any Environmental Action, affecting the Borrower or any of its Subsidiaries
before any court, governmental agency or arbitrator that (i) could be
reasonably likely to have a Material Adverse Effect or (ii) purports to
affect the legality, validity or enforceability of any Loan Document or the
consummation of the transactions contemplated hereby or thereby, and there
has been no material adverse change in the status, or financial effect on
the Borrower or any of its Subsidiaries, of the Disclosed Litigation from
that described on Schedule 3.01(a)(i) hereto.
(k) The Borrower is not engaged in the business of extending credit
for the purpose of purchasing or carrying Margin Stock, and no proceeds of
any Advance will be used to purchase or carry any Margin Stock or to extend
credit to others for the purpose of purchasing or carrying any Margin
Stock.
(l) The operations and properties of the Borrower and Subsidiaries
comply in all material respects with all applicable Environmental Laws and
Environmental Permits, except where the failure to be in such compliance
could not reasonably be expected to have a Material Adverse Effect.
(m) The Borrower and each of its Subsidiaries has filed, has caused to
be filed or has been included in all tax returns (national, departmental,
local, municipal and foreign) required to be filed and has paid or caused
to be paid all taxes, assessments, fees and other charges shown thereon to
be due, together with applicable interest and penalties, other than the
payment of any taxes, assessment, fees or other charges (i) the
52
nonpayment of which would not have a Material Adverse Effect or (ii) that
are being contested in good faith and by proper proceedings and for which
appropriate reserves are being maintained.
(n) The obligations of the Borrower and each of its Subsidiaries under
this Agreement, the Notes and each other Loan Document to which it is or is
to be a party constitute direct, unconditional and unsubordinated
obligations of the Borrower.
(o) Set forth on Schedule 4.01(o) hereto, as amended from time to time
pursuant to Section 5.03(u), is a complete and accurate list of all of the
Liens created by, or otherwise existing on property of the Borrower and
each of its Subsidiaries in favor of any other Person showing the parties
listed as the secured parties thereunder, subject matter and term thereof,
except for Liens created pursuant to the Loan Documents.
(p) The Borrower and its Subsidiaries have valid and uncontested legal
title to and are the beneficial owners of the Collateral and all of their
respective other material properties and assets, free and clear of all
Liens other than Permitted Liens and the Liens created pursuant to the Loan
Documents.
(q) The Borrower and each of its Subsidiaries is in compliance in all
material respects with all applicable laws, ordinances, rules, regulations,
and requirements of all governmental authorities (including without
limitation certificates, permits, franchises and other governmental
authorizations necessary to the ownership of its respective properties or
to the conduct of its respective business, Environmental Laws and laws with
respect to social security and pension fund obligations), except in each
case to the extent where such failure to comply would not have a Material
Adverse Effect.
(r) Neither the Borrower nor any of its Subsidiaries is an "investment
company", or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended. Neither the making of any
advance under this Agreement nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated hereby, shall violate any provision of such Act
or any rule, regulation or order thereunder.
(s) The Borrower is, individually and together with its Subsidiaries,
Solvent.
(t) Set forth on Schedule 4.01(t) hereto, as amended from time to time
pursuant to Section 5.03(u), is a complete and accurate list of all leases
of real property (other than leases of cell sites) under which the Borrower
or any of its Subsidiaries is the lessee, showing the street address,
county or other relevant jurisdiction, state, lessor, lessee, expiration
date and annual rental cost thereof.
53
(u) Neither the Borrower nor any of its Subsidiaries has any patents,
trademarks, trade names, service marks or copyrights that are material to
the conduct of its business.
(v) Set forth on Schedule 4.01(v) hereto, as amended from time to time
pursuant to Section 5.03(u), is a complete and accurate list of (i) all
Existing Debt in excess of $250,000 showing the principal amount
outstanding thereunder and (ii) the total aggregate amount of all Existing
Debt equal to or less than $100,000.
(w) Set forth on Schedule 4.01(w) hereto, as amended from time to time
pursuant to Section 5.03(u), is a complete and accurate list of all
Investments in excess of $100,000 held by the Borrower or any of its
Subsidiaries, showing the amount, obligor or issuer and maturity, if any,
thereof.
(x) Set forth on Schedule 4.01(x) hereto, as amended from time to time
pursuant to Section 5.03(u), is a complete and accurate list of all
Material Contracts of the Borrower and its Subsidiaries, showing the
parties thereto. Each such Material Contract has been duly authorized,
executed and delivered by the Borrower or its Subsidiary, as the case may
be, is in full force and effect and is binding upon and enforceable against
the Borrower or its Subsidiary, as the case may be, in accordance with its
terms except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, liquidation, fraudulent conveyance, reorganization,
concordato, moratorium or similar laws now or hereafter in effect affecting
the enforcement of creditors' rights generally, and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity), and there exists no default under any
Material Contract by the Borrower or its Subsidiaries, as the case may be,
which default could reasonably be expected to have a Material Adverse
Effect.
(y) Set forth on Schedule 4.01(y) hereto, as amended from time to time
pursuant to Section 5.03(u), is a complete and accurate list of all
licenses and spectrum rights (other than licenses relating to general
business activities and the ownership and use of property applicable to
persons generally and not specifically required to engage in business of
the type proposed to be conducted by the Borrower and its Subsidiaries)
providing for the right to operate the Networks in the Territory.
(z) Set forth on Schedule 4.01(z) hereto, as amended from time to time
pursuant to Section 5.03(u), is a complete and accurate list of all
insurance policies naming the Lenders and the other Secured Creditors as
loss payees thereunder. The amounts of such insurance and the risks covered
thereby are the same as those provided for in the insurance policies
usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
54
Subsidiary operates and such insurance is sufficient to cover the risks
associated with the conduct of the Borrower's or such Subsidiary's business
and the Project.
(aa) The activities of the Borrower's Subsidiaries contemplated by the
Project and this Agreement are commercial in nature rather than
governmental or public. The Borrower's Subsidiaries are not entitled to any
right of immunity on the grounds of sovereignty with respect to such
activities in any legal action or proceeding to enforce, or collect upon,
or otherwise arising out of or relating to this Agreement, any of the other
Loan Documents or Material Contracts.
(bb) As of the date hereof, there is no tax, levy, impost, deduction,
charge or withholding imposed, levied or made by or in any Core Territory
or New York or any political subdivision or taxing authority thereof or
therein (i) on or by virtue of the execution, delivery, performance,
enforcement or admissibility into evidence of this Agreement or any of the
other Loan Documents or (ii) on any payment to be made by the Borrower's
Subsidiaries pursuant to this Agreement or any of the other Loan Documents,
except that (A) all payments made under a Guaranty granted by the Operating
Subsidiary that is a resident of Brazil will be subject to withholding
income tax at the rate of 15% (or 25% in case of payments made to a Person
that is a resident of a country that does not tax income or taxes it at a
maximum rate of 20%) or such lower rate as provided in an applicable tax
treaty between Brazil and another country, and pursuant to Brazilian tax
laws, a Brazilian Loan Party may pay such additional amounts as will result
in receipt by the applicable payee of such amounts as would have been
received by them had no such withholding been required; (B) (i) any
interest payments made by an Argentine Loan Party may be subject to
Argentine withholding tax at the current rate of 35%; (ii) a court tax of
up to 3% of the amount in controversy imposed with respect to the
institution of any judicial proceeding to enforce any claim in the City of
Buenos Aires or in any other jurisdiction in Argentina; and (iii) each
Chattel Mortgage registered pursuant to the Master Chattel Mortgage
Agreement will be subject to registration fee of 0.2% of the amount secured
by such Chattel Mortgage (in the case of the Province of Buenos Aires), and
to a stamp tax at a rate of 1.0% (subject to the provisions of the Fiscal
Code of the Province of Buenos Aires) on the amount secured (in the case of
the Province of Buenos Aires); (C) in the case of Colombia, the value of
the foreclosure in any auction in Colombia is subject to a 3% tax and the
payments made by the Colombian Operating Subsidiary to any Colombian
trustee appointed under the Loan Documents may be subject to a tax; (D) in
the case of Panama, (i) interest and other financial commissions and
charges payable under the Credit Agreement allocated to the value of the
credits assigned for the Panama operation would be subject to withholding
tax at a 6% rate provided such payments were made from Panama and (ii)
documentary taxes of US$1.00 per US$1000.00 of face value would be payable
on the Credit Agreement and the Security Agreements at the time of
enforcement in a Panama court should this take place; and (E) in the case
of Peru, payments of interest, fees, commissions and other expenses
55
made by the Borrower under any Loan Document to Persons (excluding
individuals) domiciled outside of Peru are subject to (1) Peruvian income
withholding tax, at the current rate of 1%, so long as (x) the interest
rate borne by the loans under the Loan Documents does not exceed LIBOR plus
7% or the Prime Rate plus 6%, (y) there is no economic link between the
Borrower and the Lenders to whom such interest is paid and (z) the
proceeds, if in cash, of the loans under the Loan Documents are received in
Peru by the Borrower and (2) Peruvian value added tax (VAT) at a rate of
18%, solely to the extent such amounts are paid to non-banking,
non-financial or non-credit institutions. With respect to Peru, (I) any
portion of the interest rates applying to the loans under the Loan
Documents that exceeds the rates specified in clause (ii)(E)(1)(x) above
will be subject to taxation at a 30% income tax withholding rate; (II) if
the conditions specified in clause (ii)(E)(1)(y) or (z) are not satisfied,
interest on the relevant loans under the Loan Documents will be subject to
taxation at a 30% income tax withholding rate (for this purpose, all
expenses and commissions, premiums and any other sum payable in addition to
interest agreed upon that are paid to a foreign beneficiary will also be
considered as interest).
(cc) (intentionally omitted)
(dd) Set forth on Schedule 4.01(dd) hereto, as amended from time to
time pursuant to Section 5.03(u), is a complete and accurate list of all
Plans, Multiemployer Plans and Welfare Plans.
(ee) No ERISA Event has occurred or is reasonably expected to occur
with respect to any Plan that, when taken together with all other ERISA
Events that are reasonably expected to occur with respect to any Plan,
could reasonably be expected to have a Material Adverse Effect.
(ff) Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed
with the Internal Revenue Service and furnished to the Lender Parties, is
complete and accurate and fairly presents the funding status of such Plan,
and since the date of such Schedule B there has been no material adverse
change in such funding status.
(gg) Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any Withdrawal Liability exceeding U.S.$50,000
to any Multiemployer Plan.
(hh) Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of
ERISA, and no such Multiemployer
56
Plan is reasonably expected to be in reorganization or to be terminated,
within the meaning of Title IV of ERISA.
(ii) Set forth on Schedule 4.01(ii) hereto, as amended from time to
time pursuant to Section 5.03(u), is a complete and accurate list of all
Licenses with respect to the ownership and operation of digital wireless
local loop data networks constituting a portion of a Network in each of the
Core Territories as well as any other part of the Territory that are
necessary for the Borrower to fulfill the financial and operational
projections set forth in the Borrower's business plan dated October 29,
1999, including all Licenses with respect to rights to use spectrum in the
15 GHz, 18 GHz, 23 GHz and 38 GHz bands.
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower shall:
(a) Compliance with Laws, Etc. Comply, and cause each of its
Subsidiaries to comply, in all material respects, with all applicable laws,
rules, regulations and orders, such compliance to include, without
limitation, compliance with Environmental Laws, except when contested in
good faith by appropriate proceedings and for which an adequate reserve has
been established or where non-compliance could not reasonably be expected
to have a Material Adverse Effect.
(b) Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all taxes, assessments and governmental charges or levies imposed upon
it or upon its property and (ii) all lawful claims that, if unpaid, might
by law become a Lien upon its property; provided that neither the Borrower
nor any of its Subsidiaries shall be required to pay or discharge any such
tax, assessment, charge, levy or claim that is being contested in good
faith and by proper proceedings and as to which appropriate reserves are
being maintained, unless and until any Lien resulting therefrom attaches to
its property and becomes enforceable against its other creditors, or where
non-payment could reasonably be expected to have a Material Adverse Effect.
(c) Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons occupying its properties to
comply, in all material respects, with all Environmental Laws and
Environmental Permits applicable to its operations and properties except
where noncompliance could not reasonably be expected to have a Material
Adverse Effect; obtain and renew, and cause each of its
57
Subsidiaries to obtain and renew, all Environmental Permits necessary for
its operations and properties except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(d) Maintenance of Insurance. Cause each Operating Subsidiary to
maintain property and third-party liability insurance providing for the
designation of the Collateral Agent as loss payee thereunder with reputable
and internationally recognized insurance companies or associations in such
amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general
areas in which such Operating Subsidiary operates, subject to the
availability of such insurance on reasonable terms in the commercial
insurance market.
(e) Preservation of Existence, Etc. Preserve and maintain, and cause
each of its Subsidiaries to preserve and maintain, its corporate existence
and its rights (contractual and statutory) with respect to the Networks;
provided that the Borrower and its Subsidiaries may consummate any merger
or consolidation permitted under Section 5.02 (c); and provided further
that neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right or franchise if the Board of Directors or the General
Assembly of Partners, as the case may be, of the Borrower or such
Subsidiary shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Borrower or such
Subsidiary, as the case may be, and that the loss thereof could not
reasonably be expected to have a Material Adverse Effect.
(f) Visitation Rights. At any reasonable time and from time to time
upon reasonable advance notice, permit the Administrative Agent, the
Collateral Agent or any of the Lenders or any agents or representatives
thereof, to examine and make copies of and abstracts from the records and
books of account of, and visit the properties of, the Borrower and any of
its Subsidiaries, and to discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with any of their officers or
directors and with their independent certified public accountants (at which
discussions representatives of the Borrower may be present if Borrower so
desires).
(g) Keeping of Books. Keep, and cause each of its Subsidiaries to
keep, proper books of record and account, in which full and correct entries
shall be made of all financial transactions and the assets and business of
the Borrower and each such Subsidiary in accordance with GAAP, in each case
to the extent necessary to enable the Borrower to comply with the periodic
reporting requirements of this Agreement.
(h) Maintenance of Properties, Etc. Maintain and preserve, and cause
each of its Subsidiaries to maintain and preserve, all of its properties
that are used or useful in the conduct of its business in good working
order and condition, ordinary wear and tear and obsolescence excepted, and
not commit or suffer any waste with respect to any of its
58
respective properties except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
(i) Compliance with Terms of Leaseholds. (i) Make all payments and
otherwise perform all obligations in respect of all leases of real property
to which it is a party, keep such leases in full force and effect and use
commercially reasonable efforts to not allow such leases to lapse or to be
terminated or any rights to renew such leases to be forfeited or canceled,
notify the Administrative Agent and the Collateral Agent of any default by
any party with respect to such leases and cooperate with the Administrative
Agent and the Collateral Agent in all respects to cure any such default,
and cause each of its Subsidiaries to do so except where the failure to do
so could not, individually or cumulatively, reasonably be expected to have
a Material Adverse Effect and (ii) request, and cause each Operating
Subsidiary to request, that any landlord, mortgagee or easement grantor of
such Operating Subsidiary give the Collateral Agent and the Administrative
Agent, on a best-efforts basis, notice of any default on the part of the
applicable Operating Subsidiary under any agreement with such Operating
Subsidiary and allow the Collateral Agent and its agents to inspect and
remove Collateral after the occurrence and during the continuance of an
Event of Default.
(j) Performance of Material Contracts. Except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect,
perform and observe in all material respects all the terms and provisions
of each Material Contract to be performed or observed by it, maintain each
such Material Contract in full force and effect and enforce each such
Material Contract in accordance with its terms. For the purposes of this
Agreement, a voluntary termination or suspension of a Material Contract by
the Borrower in accordance with the terms and conditions thereof shall be
deemed to not have a Material Adverse Effect.
(k) New Operating Subsidiaries and Intermediate Holding Company
Subsidiaries. Upon the creation of any Operating Subsidiary or Intermediate
Holding Company Subsidiary not in existence on the date hereof or upon an
Insignificant Subsidiary's becoming an Operating Subsidiary or an
Intermediate Holding Company Subsidiary, the Borrower will at its expense:
(i) cause such Subsidiary to duly execute and deliver to the
Administrative Agent and the Collateral Agent a Guaranty substantially
in the form of Exhibit D-2 (for Intermediate Holding Company
Subsidiaries) or D-1 (for Operating Subsidiaries);
(ii) cause such Subsidiary to duly execute and deliver to the
Administrative Agent and the Collateral Agent an Operating Subsidiary
Security Agreement or Intermediate Holding Company Security Agreement,
as applicable
59
(with such changes thereto as the Administrative Agent may reasonably
request) and such other mortgages, pledges, assignments and other
security agreements, in form and substance reasonably satisfactory to
the Agents, securing payment of all of the obligations of such
Subsidiary under the Guaranty and the obligations of the Loan Parties
under this Agreement and constituting Liens on all Collateral
described therein; and pledge, or cause to be pledged, to the
Collateral Agent on behalf of the Secured Parties, all authorized,
issued and outstanding capital stock or capital contributions of such
Subsidiary; and execute and/or deliver to the Administration Agent
each other document or instrument required to be delivered in
connection with the execution and delivery of such Operating Security
Agreement or Intermediate Holding Company Security Agreement;
(iii) deliver to the Administrative Agent a signed copy of
favorable opinions, addressed to the Agents and the Lenders, of
counsel for the Borrower reasonably acceptable to the Administrative
Agent as to such matters relating to such Operating Subsidiary as
either Agent may reasonably request;
(iv) deliver to the Administrative Agent a copy of a
process-agent letter for such Subsidiary if it is organized in a
jurisdiction outside the United States; and
(v) at any time and from time to time, promptly execute and
deliver any and all further instruments and documents and take all
such other action as either Agent may deem desirable in obtaining the
full benefits of or in preserving the Liens of each Security Agreement
delivered pursuant to this Section 5.01(k) and mortgages and other
agreements and instruments entered into by such Operating Subsidiary.
(l) Obtain and Maintain Licenses and Permits. Obtain, maintain and
comply and cause each of its Subsidiaries to obtain, maintain and comply
with all licenses, permits, approvals or consents and the Licenses and the
Regulatory Permits required to conduct the Borrower's and its Subsidiaries
business in the Territory and make all payments when due of all amounts
owing in respect of the Licenses and any spectrum clearances except (with
respect to Licenses other than Material Licenses) where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
(m) Maintain Governmental Approvals. Obtain and maintain, and cause
each of its Subsidiaries to obtain and maintain, in full force and effect
all governmental approvals that may be required for the validity or
enforceability of this Agreement, the Notes, each other Loan Document, and
any other agreement entered into in connection with the transactions
contemplated hereby and thereby.
60
(n) No Transfer of Licenses. Maintain or cause its Subsidiaries to
maintain the Licenses and refrain from transferring any such Licenses to a
third party without prior written approval of the Lenders, except (with
respect to Licenses other than Material Licenses) where the failure to do
so could not reasonably be expected to have a material adverse effect on
the ability of the Borrower to perform its payment obligations under the
Loan Documents.
(o) Syndication Matters. At the Borrower's expense, (i) promptly and
in any event within 30 days after being requested to do so by the Initial
Lender, prepare an information memorandum reasonably satisfactory to the
Initial Lender in form and scope customary for information memoranda
prepared for loan syndications of similar borrowers, thereafter upon
reasonable notice from the Initial Lender provide reasonable updates of the
information contained in such information memorandum and at the time of
delivery of such update cause such information memorandum not to contain
any untrue statement of material fact or omit to state a material fact
necessary to make the statements made therein not misleading during such
period, (ii) make senior managers of the Borrower and its Subsidiaries
reasonably available at meetings with prospective lenders in connection
with the syndication of this Agreement, (iii) do such other acts and things
as the Lender may reasonably request that are customary in connection with
the syndication of credit agreements in order successfully to syndicate
this Agreement and (iv) at the Lenders' expense, cooperate, and cause the
Borrower to cooperate, with the Lenders in obtaining political risk
insurance.
(p) Consularization, Etc. At the Borrower's expense, take such actions
with respect to any Loan Document as may by necessary or appropriate or
reasonably requested by any Agent or Lender in any jurisdiction where any
Loan Party is located in order to ensure the validity or enforceability of
the Loan Documents against the Loan Parties in such jurisdictions,
including without limitation the consularization of the Loan Documents
where the laws of the relevant Core Territory may so require.
(q) Additional Collateral. To the extent the cost of creating,
perfecting and maintaining a Lien on any such Collateral does not,
individually or in the aggregate, exceed the value of any recovery proceeds
reasonably expected to be obtained by the Collateral Agent in connection
with the enforcement of such Lien against such Collateral, within 30 days
after delivering the report required pursuant to Section 5.03(t) with
respect to additional Collateral, cause such relevant Operating Subsidiary,
at its expense, to assign and pledge to the Collateral Agent for the
benefit of the Secured Creditors the property described in such report,
except such property encumbered by Liens permitted pursuant to Section
5.02(b)(vi), pursuant to Security Agreements and other instruments
satisfactory in form and substance to the Collateral Agent; and will cause
such Operating Subsidiary to make such registrations and filings, and do
such other or further acts and things as may be necessary to perfect the
Lien of the Collateral Agent in respect of such
61
property. The Borrower or such Subsidiary, as the case may be, shall not be
required to assign or pledge any such property if such assignment or pledge
is not permitted under any applicable laws.
SECTION 5.02. Negative Covenants. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower will not:
(a) Indebtedness. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Debt, other than:
(i) Debt owing hereunder and Existing Debt,
(ii) Debt created under Hedge Agreements entered into by the
Borrower,
(iii) Debt of any Person that becomes a Subsidiary of the
Borrower after the date hereof in accordance with the terms of Section
5.02(k)(i) which Debt is existing at the time such Person becomes a
Subsidiary of the Borrower (other than Debt incurred solely in
contemplation of such Person becoming a Subsidiary of the Borrower),
(iv) Subordinated Debt,
(v) Debt of the Borrower to any of its Subsidiaries, or of a
Subsidiary to the Borrower or to a Subsidiary of the Borrower;
provided that such Debt shall have been pledged to the Collateral
Agent,
(vi) Debt incurred in connection with the entering into by the
Borrower or a Subsidiary thereof of Capitalized Leases in aggregate
principal amount (including any such Debt incurred to refinance such
Debt, as permitted by clause (xii) below) at any one time outstanding
not exceeding (A) $50,000,000, with respect to any indefeasible rights
of use of fiber and (B) $10,000,000, with respect to Capitalized
Leases other than indefeasible rights of use of fiber,
(vii) Secured Debt for the purpose of financing working-capital
requirements of the Borrower and its Subsidiaries in an aggregate
principal amount (including any such Debt incurred to refinance such
Debt, as permitted by clause (xii) below) at any time outstanding not
exceeding 10% of Contributed Capital at such time; provided that upon
the incurrence of such Debt the creditors thereof shall become parties
to the Intercreditor Agreement,
62
(viii) Secured Debt (including Debt under the Ericsson Credit
Agreement) incurred for the purchase price of property or services to
be used for the conduct of the Borrower's or any of its Subsidiary's
business; provided that, immediately upon incurrence of such Debt, the
Borrower shall be in compliance with the terms of Sections 5.04(d),
(e), (f) and (g) and provided further that upon the incurrence of
Secured Debt pursuant to this clause, the creditors thereof shall
become parties to the Intercreditor Agreement,
(ix) Intercompany Mirror Subordinated Debt,
(x) Debt incurred to finance the purchase price of equipment or
other property ancillary to the Borrower's business and secured by
Liens permitted under Section 5.02(b)(vi), in an aggregate principal
amount (including any such Debt incurred to refinance such Debt, as
permitted by clause (xii) below) at any time outstanding not exceeding
1% of Contributed Capital at such time,
(xi) Debt in the form of Back-to-Back Loans, and
(xii) Debt incurred in connection with the refinancing of any
Debt which may be incurred under clauses (i) through (xi) above;
provided that (A) such Debt does not exceed the amount of Debt being
refinanced, (B) in the case of the refinancing of any Subordinated
Debt, any such Debt shall also be subordinated on substantially the
same terms and (C) in the case of Intercompany Mirror Subordinated
Debt, such Debt still qualifies as Intercompany Mirror Subordinated
Debt;
provided that at the time of incurrence of any of the Debt referred to in
clauses (i) to (ix) above, and immediately after giving effect thereto, no
event has occurred and is continuing that constitutes a Default.
(b) Liens, Etc. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any
Lien on or with respect to any of its properties, whether now owned or
hereafter acquired, or assign, or permit any of its Subsidiaries to assign,
any right to receive income, other than
(i) Liens created under the Loan Documents,
(ii) Permitted Liens,
(iii) Shared Liens,
63
(iv) Liens existing on the date hereof and described on Schedule
4.01(o) hereto,
(v) Liens arising in connection with Capitalized Leases permitted
under Section 5.02(a)(vi); provided that no such Lien shall extend to
or cover any Collateral or assets other than the assets subject to
such Capitalized Leases,
(vi) purchase money Liens to secure Debt incurred in accordance
with Section 5.02(a)(x); provided that no such Lien shall extend to or
cover any property other than the property being acquired, and no
extension, renewal or replacement shall extend to or cover any
property not theretofore subject to the Lien being extended, renewed
or replaced,
(vii) Liens arising in connection with the lease or transfer of
Customer Premise Equipment permitted under Section 5.02(j)(vi),
(viii) Liens on Blocked Accounts created under the Blocked
Account Letter Agreements (as each term is defined both herein and in
the Ericsson Credit Agreement), and
(ix) the replacement, extension or renewal of any Lien permitted
by clauses (iii) through (viii) above upon or in the same property
theretofore subject thereto or the replacement, extension or renewal
(without increase in the amount or change in any direct or contingent
obligor) of the Debt secured thereby.
(c) Mergers, Etc. Merge into or consolidate with any Person or permit
any Person to merge into it, or permit any of its Subsidiaries to do so,
except that (i) any Subsidiary of the Borrower may merge into or
consolidate with any other Subsidiary of the Borrower so long as the Person
formed by such merger or consolidation is a Subsidiary of the Borrower,
(ii) any of the Borrower's Subsidiaries may merge into the Borrower so long
as the Borrower is the surviving corporation and (iii) the Borrower or any
of its Subsidiaries may merge with any other Person so long as, in the case
of any such merger to which the Borrower is a party, the Borrower is the
surviving corporation and, in the case of any such merger to which a
Subsidiary of the Borrower is a party, such Subsidiary is the surviving
corporation; provided that in each case, immediately after giving effect
thereto, no event shall occur and be continuing that constitutes a Default.
(d) Changes in Fiscal Year. Make or permit any change in its fiscal
year or permit any of its Subsidiaries to make or permit any change in its
fiscal year.
(e) Transactions with Affiliates. Either (i) enter into or permit any
Subsidiary to enter into any agreement or arrangement with any Affiliate of
the Borrower if such
64
agreement or arrangement contains pricing and terms that provide to such
Affiliate fees, profits, premiums or terms materially in excess of or
materially more favorable than the fees, profits, premiums or terms that
the Borrower or a Subsidiary thereof could reasonably be expected to pay or
provide to a third party in connection with a similar transaction, other
than agreements providing for management fees payable by an Operating
Subsidiary to the Borrower or (ii) without limiting the foregoing, enter
into or permit any Subsidiary to enter into any tax-sharing agreement or
arrangement with the Parent or any other Person pursuant to which the
Borrower and its Subsidiaries will make any payments or agree to make any
payments in lieu of income taxes unless the cumulative sum of such payments
does not exceed to any material extent the cumulative sum of income taxes
that the Borrower and its Subsidiaries would have paid if the Borrower and
its Subsidiaries had always filed income tax returns on a consolidated
basis as a separate affiliated group (as such term is defined in section
1504(a) of the Internal Revenue Code of 1986) of corporations consisting of
only the Borrower and its Subsidiaries.
(f) Other Business. Engage or permit any Subsidiary to engage,
directly or indirectly, in any business other than the offering of data,
voice or video services, whether as a competitive access provider, a
competitive local exchange carrier or an Internet access provider other
than in the Territory.
(g) Modification of Organizational Documents. Modify or permit any
Subsidiary to modify its organizational documents in a manner that affects
materially and adversely the fulfillment of its or such Subsidiary's
obligations under any Loan Document to which it or such Subsidiary is a
party or changes in any material respect the nature of its or such
Subsidiary's business, its accounting policies or reporting practices.
(h) Amendment; Etc. of Material Contracts. Cancel or terminate any
Material Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any
consent, waiver or approval thereunder, waive any default under or any
breach of any Material Contract or agree in any manner to any other
amendment, modification or change of any term or condition of any Material
Contract if any of such actions could reasonably be expected to result in a
Material Adverse Effect or take any other action in connection with any
Material Contract that would impair the value of the interest or rights of
the Borrower thereunder or that would impair the interest or rights of the
Administrative Agent or any Lender thereunder, or permit any of its
Subsidiaries to do any of the foregoing if any of such actions could
reasonably be expected to result in a Material Adverse Effect.
(i) Negative Pledge. Enter into or suffer to exist, or permit any of
its Subsidiaries to enter into or suffer to exist, any agreement
prohibiting or conditioning the creation or assumption of any Lien upon any
of its property or assets except (i) in favor of
65
the Secured Creditors or (ii) in connection with (A) any Capitalized Lease
permitted by Section 5.02(a)(vi) solely to the extent that such Capitalized
Lease prohibits a Lien on the property subject thereto or (B) any Debt
outstanding on the date any Subsidiary of the Borrower becomes such a
Subsidiary (so long as such agreement was not entered into solely in
contemplation of such Subsidiary becoming a Subsidiary of the Borrower).
(j) Sales of Assets. Sell, lease, transfer, liquidate, wind up or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
transfer, liquidate, wind up or otherwise dispose of, any Collateral or any
substantial part of its assets other than Collateral, including without
limitation substantially all assets constituting the business of a
division, branch or other unit operation, or grant any option or other
right to purchase, lease or otherwise acquire any Collateral other than
inventory to be sold in the ordinary course of its business, except:
(i) sales and disposal of inventory in the ordinary course of
business,
(ii) in a transaction authorized by subsection (c) of this
Section 5.02,
(iii) sales of Material Assets for cash and for fair value in an
aggregate amount not to exceed $10,000,000 in any fiscal year, the Net
Cash Proceeds of which are applied in accordance with Section 2.08(b),
(iv) the limited recourse sale of accounts receivable in
connection with the securitization thereof, which sale is non-recourse
to the extent customary in securitizations, the Net Cash Proceeds of
which are applied in accordance with Section 2.08(b),
(v) sales and disposal of obsolete equipment in the ordinary
course of business,
(vi) sales, leases and transfers of Customer Premise Equipment in
the ordinary course of business, and
(vii) sales of other assets for cash and for fair value in an
aggregate amount not to exceed $2,500,000 in any fiscal year.
(k) Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person other than:
(i) Investments by the Borrower and its Subsidiaries in their
Insignificant Subsidiaries, Operating Subsidiaries and Intermediate
Holding Company Subsidiaries outstanding on the date hereof and
additional investments
66
in Insignificant Subsidiaries, Operating Subsidiaries and Intermediate
Holding Company Subsidiaries engaged in businesses permitted under
Section 5.02(f) in the Core Territories; provided that:
(A) the Borrower shall have complied with the provisions set
forth in Section 5.01(k),
(B) each Operating Subsidiary shall be a Wholly Owned
Subsidiary of the Borrower or an Intermediate Holding Company
Subsidiary,
(C) in the case of any such Subsidiary created after the
date hereof, such Subsidiary shall be a Wholly Owned Subsidiary,
(D) in the case of any Intermediate Holding Company
Subsidiary in existence on the date hereof, the Borrower shall
directly hold 100% of each class and series of Equity Interests
of such Subsidiary;
(ii) loans and advances to employees in the ordinary course of
the business of the Borrower and its Subsidiaries as presently
conducted in an aggregate principal amount not to exceed $250,000, at
any time outstanding;
(iii) Investments by
(A) the Operating Subsidiaries in Cash Equivalents in an
aggregate amount not to exceed $20,000,000 at any one time
outstanding, and
(B) any Intermediate Holding Company Subsidiary in Cash
Equivalents in an aggregate amount not to exceed $5,000,000 at
any one time outstanding; provided that no Intermediate Holding
Company Subsidiary shall maintain any such Investment for more
than five Business Days;
(iv) Investments existing on the date hereof and described on
Schedule 4.01(w) hereto;
(v) Investments by the Borrower in Hedge Agreements permitted
under Section 5.02(a)(ii); provided that the transactions contemplated
by such agreements do not violate the provisions of Section 5.02(t);
67
(vi) Investments consisting of intercompany Debt permitted under
Section 5.02(a)(v);
(vii) Investments by the Borrower or an Intermediate Holding
Company Subsidiary in Back-to-Back Loans; and
(viii) Investments by the Borrower and its Subsidiaries in the
capital stock of:
(A) Subsidiaries engaged in businesses permitted under
Section 5.02(f) in any country other than any Core Territory in
an aggregate amount invested not to exceed $25,000,000 at any
time outstanding and as to which the Borrower shall have complied
with its obligations under Section 5.01(k), and
(B) Companies engaged in businesses permitted under Section
5.02(f) (I) in any Core Territory, in an aggregate not to exceed
$35,000,000 in any calendar year or (II) in the Territory other
than in any Core Territory in an aggregate not to exceed
$15,000,000 amount at any time outstanding; provided that in each
case any capital stock so acquired shall have been pledged to the
Collateral Agent for the benefit of the Lenders within 30 days
after such acquisition pursuant to security agreements and other
instruments reasonably satisfactory in form and substance to the
Required Lenders and the Person making such Investments shall
have taken such other action with respect to such collateral
security as would be required under Section 5.01(k) with respect
to collateral security if such Person were a newly created
Subsidiary of the Borrower.
(l) Restricted Payments. Declare or pay or make any Restricted Payment
or permit any of its Subsidiaries to make any Restricted Payment, except
that the Borrower may
(i) make scheduled payments of interest in respect of
Intercompany Mirror Subordinated Debt at any time after December 31,
2001, so long as no Default has occurred and is continuing at the time
of or after giving effect to any such payment; and
(ii) make a cash distribution to the Parent in respect of tax
obligations of the Parent due in respect of (I) the existence of the
Parent or (II) the activities of the Borrower or any of its
Subsidiaries, but in either case only to the extent that
68
such distribution would be permitted under tax-sharing agreements or
arrangements permitted under Section 5.02(e).
(m) Prepayments of Debt. Prepay:
(i) any Subordinated Debt and Intercompany Mirror Subordinated
Debt, or
(ii) any other Debt, other than Debt permitted under Section
5.02(a)(vi), (x) or (xi), unless the Borrowings and such other Debt
shall be ratably prepaid in accordance with the respective then
outstanding aggregate principal amounts thereof.
(n) Liquidation, Etc. of Business. Wind up, dissolve or liquidate the
Borrower or any of its Subsidiaries except as permitted under Section
5.01(e), or abandon its conduct of its business in the Territory.
(o) Gross PP&E. Make or permit its Subsidiaries to make any Capital
Expenditures that would cause the Gross PP&E of the Borrower and its
Subsidiaries in any period set forth below to exceed the amount set forth
below for such period.
Year Ending In Amount
-------------- ------
12/31/99 $ 52,000,000
12/31/00 $156,500,000
12/31/01 $253,000,000
12/31/02 $377,500,000
12/31/03 $450,500,000
12/31/04 $523,500,000
12/31/05 $616,300,000
12/31/06 $720,300,000
69
(p) Lease Obligations. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist:
(i) any obligations as lessee for the rental or hire of real or
personal property of any kind under leases or agreements to lease
having a term of one year or more from the date of execution thereof
(other than Capitalized Leases) that would cause the direct and
contingent liabilities of it and its Subsidiaries, on a Consolidated
basis, in respect of all such obligations in any period set forth
below to exceed the amount set forth below for such period;
Year Ending In Amount
-------------- ------
12/31/99 $ 7,500,000
12/31/00 $12,500,000
12/31/01 $17,500,000
12/31/02 $22,500,000
12/31/03 $27,500,000
12/31/04 $47,500,000
12/31/05 $57,500,000
12/31/06 $72,500,000
or
(ii) any obligations under Capitalized Leases that would cause
the direct and contingent liabilities of it and its Subsidiaries, on a
Consolidated basis, in respect of all such obligations to exceed at
any time (A) $50,000,000, with respect to indefeasible rights of use
of fiber and (B) $10,000,000, with respect to Capitalized Leases other
than indefeasible rights of use of fiber.
(q) Restrictions on Activities. Conduct any significant business other
than holding Equity Interests of Intermediate Holding Company Subsidiaries
and incurring liabilities and holding Investments permitted under this
Agreement or permit any of its Intermediate Holding Company Subsidiaries
to:
(i) hold any assets that would cause them to fail to qualify as
Intermediate Holding Company Subsidiaries,
(ii) incur debt or other liabilities other than intercompany
loans under Section 5.02(a)(v), and
70
(iii) conduct any significant business other than holding the
capital stock or contributions of, providing managerial oversight for
and supporting and consolidating the corporate functions of, an
Operating Subsidiary or Intermediate Holding Company Subsidiary.
(r) Payment Restrictions Affecting Subsidiaries. Directly or
indirectly, enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement or arrangement
limiting the ability of any of its Subsidiaries to declare or pay dividends
or other distributions in respect of its Equity Interests or repay or
prepay any Debt owed to, make loans or advances to, or otherwise transfer
assets to or invest in, the Borrower or any Subsidiary of the Borrower
(whether through a covenant restricting dividends, loans, asset transfers
or investments, a financial covenant or otherwise), except the Loan
Documents.
(s) Partnerships, Etc. Become a general partner in any general or
limited partnership or joint venture, or permit any of its Subsidiaries to
do so.
(t) Speculative Transactions. Engage, or permit any of its
Subsidiaries to engage, in any transaction involving commodity options or
futures contracts or any similar speculative transactions.
(u) Issuance of Capital Stock or Contributions by Subsidiaries. Permit
any of its Subsidiaries to issue any capital stock or contributions to any
Person other than to the Borrower or a Wholly Owned Subsidiary of such
Subsidiary, except pursuant to any agreement in effect and listed in the
form of Schedule 5.02(u).
(v) Speculative Build-Outs. Install or permit any of its Subsidiaries
to install a portion of any Network intended to provide direct service to
end-user customers (a "Tributary") in any building unless there is at least
one bona fide significant customer using such Tributary in such building,
except that for every 100 buildings in which such a Tributary is installed,
a Tributary may be installed in one building for which there is not any
such customer.
SECTION 5.03. Reporting Requirements. So long as any Advance shall remain
unpaid or any Lender shall have any Commitment hereunder, the Borrower shall
furnish to the Lenders:
(a) as soon as available and in any event within 15 days after the end
of each fiscal month of the Borrower, for a period of 12 months from the
date hereof (i) internal summary financial and operating statements for
such month, prepared by the Borrower's management for its chief executive
officer and (ii) a memorandum or letter discussing such internal summary
financial and operating statements and comparing such financial
71
information to the pro forma financial information for such period set
forth in the business plan delivered pursuant to Section 3.01(i)(ii);
(b) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Borrower (i)
internal summary financial and operating statements for such quarter,
prepared by the Borrower's management for its chief executive officer and
(ii) a memorandum or letter discussing such internal summary financial and
operating statements and comparing such financial information to the pro
forma financial information for such period set forth in the budget for
such period delivered pursuant to Section 5.03(r);
(c) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Borrower,
Consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated and
consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for the period commencing at the end of the previous fiscal
year and ending with the end of such quarter, and, with respect to the
second fiscal quarter of any fiscal year of the Borrower, a certificate of
the chief financial officer of the Borrower (a "Compliance Certificate")
(i) duly certifying (subject to year-end adjustment audits) that such
balance sheets and statements of income and cash flow have been prepared in
accordance with GAAP and stating that, to the knowledge of such chief
financial officer, no Default has occurred and is continuing or, if a
Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take
with respect thereto and (ii) attesting to the number of Voice Grade
Equivalents as of the end of such fiscal quarter;
(d) as soon as available and in any event within 120 days (or, after
the consolidated group of companies of which the Borrower is part is
subject to the reporting requirements of the Securities and Exchange Act of
1934, 90 days) after the end of each fiscal year of the Borrower, a copy of
the annual audit report for such year for the Borrower and its
Subsidiaries, containing Consolidated and consolidating balance sheets of
the Borrower and its Subsidiaries as of the end of such fiscal year and
Consolidated and consolidating statements of income and cash flows of the
Borrower and its Subsidiaries for such fiscal year, in each case
accompanied by (i) an opinion acceptable to the Required Lenders from a
firm of nationally recognized independent certified public accountants,
together with (A) a certificate of such accounting firm to the Lenders
stating that in the course of the regular audit of the business of the
Borrower and its Subsidiaries, which audit was conducted by such accounting
firm in accordance with GAAP, such accounting firm has obtained no
knowledge that would cause them to believe that a Default has occurred and
is continuing, or if, in the opinion of such accounting firm, a Default has
occurred and is continuing, a statement as to the nature thereof and (B) a
schedule in form satisfactory to the Administrative Agent of the
computations used by
72
such accountants in determining, as of the end of such fiscal year,
compliance with the covenants contained in Section 5.04 and (ii) a
certificate of the chief financial officer of the Borrower (A) stating that
to his or her knowledge no Default has occurred and is continuing or, if a
default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take
with respect thereto and (B) attesting to the number of Voice Grade
Equivalents as of the end of such fiscal year;
(e) promptly upon the discovery of the occurrence or existence
thereof, notice of (i) any Default under this Agreement, the Notes or the
Security Agreements, along with a statement of the Chief Executive Officer
or Chief Financial Officer of the Borrower setting forth the details of
such Default and the action that the Borrower has taken and proposes to
take with respect thereto, (ii) any event, development or circumstance
which would cause the financial statements most recently furnished to the
Lenders in accordance with Section 5.03(c) or (d) to fail in any material
respect to fairly present, in accordance with GAAP, the financial condition
and operating results of the Borrower and its Subsidiaries as of the date
of such financial statements, and (iii) the occurrence of a Material
Adverse Effect;
(f) promptly after the commencement thereof, notice of all actions,
suits, investigations, litigation and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting any Loan Party or any of
its Subsidiaries of the type described in Section 3.01(a), and promptly
after the occurrence thereof, notice of any adverse change in the status or
the financial effect on any Loan Party or any of its Subsidiaries of the
Disclosed Litigation from that described on Schedule 3.01(a)(i) hereto;
(g) (i) promptly and in any event within 10 days after the Borrower or
any ERISA Affiliate knows or has reason to know that any ERISA Event has
occurred, a statement of the chief executive officer or chief financial
officer of the Borrower describing such ERISA Event and the action, if any,
that the Borrower or such ERISA Affiliate has taken and proposes to take
with respect thereto and (ii) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant
to Section 4010 of ERISA, a copy of such records, documents and
information;
(h) promptly and in any event within three Business Days after receipt
thereof by the Borrower or any ERISA Affiliate, copies of each notice from
the PBGC stating its intention to terminate any Plan or to have a trustee
appointed to administer any Plan;
(i) promptly and in any event within 30 days after the receipt thereof
by the Borrower or any ERISA Affiliate, a copy of the annual actuarial
report for each Plan the
73
funded current liability percentage (as defined in Section 302(d)(8) of
ERISA) of which is less than 90% or the unfunded current liability of which
exceeds $1,000,000;
(j) promptly and in any event within five Business Days after receipt
thereof by the Borrower or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, copies of each notice concerning (i) the imposition of
Withdrawal Liability by any such Multiemployer Plan, (ii) the
reorganization or termination, within the meaning of Title IV of ERISA, of
any such Multiemployer Plan or (iii) the amount of liability incurred, or
that may be incurred, by the Borrower or any ERISA Affiliate in connection
with any event described in clause (i) or (ii);
(k) as soon as available and in any event not later than 60 days after
the end of each fiscal year of the Borrower, an updated business plan of
the Borrower approved by its Board of Directors, with respect at least to
the period ending on the fifth anniversary of the Tranche A Effective Date,
including projections and budgets and otherwise in substantially the form
and scope of the business plan delivered pursuant to Section 3.01(i)(ii);
(l) promptly after the sending or filing thereof, copies of all proxy
statements, financial statements and reports that any Loan Party or any of
its Subsidiaries sends to its stockholders or partners, and copies of all
regular, periodic and special reports, and all registration statements,
that any Loan Party or any of it Subsidiaries filed with the Securities and
Exchange Commission or any governmental authority that may be substituted
therefor, or with any national securities exchange;
(m) promptly after the furnishing thereof, copies of any statement or
report furnished to any holder of Debt securities of any Loan Party or of
any of its Subsidiaries pursuant to the terms of any indenture, loan or
creditor similar agreement and not otherwise required to be furnished to
the Lender Parties pursuant to any other clause of this Section 5.03;
(n) promptly upon receipt thereof, copies of all notices of default
received by any Loan Party or any of its Subsidiaries under or pursuant to
any License, Material Contract or instrument, indenture, loan or credit or
similar agreement and, from time to time upon request by the Administrative
Agent, such information and reports regarding the Licenses, the Material
Contracts and such instruments, indentures and loan and credit and similar
agreements as the Administrative Agent may reasonably request;
(o) promptly after the assertion or occurrence thereof, notice of any
Environmental Action against or of any noncompliance by any Loan Party or
any of its Subsidiaries with any Environmental Law or Environmental Permit
that could reasonably be expected to have a Material Adverse Effect;
74
(p) promptly after the adoption by the Borrower or any of its
Subsidiaries thereof, notice of any change in the accounting policies and
reporting practices of such Borrower or Subsidiary;
(q) promptly upon receipt thereof, any additional reports, management
letters or other detailed information concerning significant aspects of
Borrower's operations or financial affairs prepared by the Borrower's
independent accounts and provided to the Board of Directors of the Borrower
(and not otherwise contained in other materials provided hereunder);
(r) at least 30 days but not more than 90 days prior to the beginning
of each fiscal year, an annual budget prepared on a monthly basis for the
Borrower for such fiscal year (displaying anticipated statements of income
and cash flows and balance sheets) and any revisions of such annual or
other budgets;
(s) such other information respecting the Borrower or any of its
Subsidiaries as any Lender through the Administrative Agent may from time
to time reasonably request;
(t) (i) for each Core Territory in which the Licenses are not subject
to a perfected Lien in favor of the Collateral Agent, within 30 days after
(A) the date falling 45 days after the beginning of each fiscal quarter and
(B) the end of each fiscal quarter, and (ii) in each other Core Territory,
within 30 days after the end of each fiscal quarter, a list of all real
property with an aggregate value in excess of $50,000 and personal property
with an aggregate value in excess of $10,000 in each case located in such
Core Territory and including in each case, without limitation, all accounts
receivable, assets acquired through capital expenditures and general
intangibles, that have been acquired by the Borrower or any Subsidiary
thereof and not included in any prior report under this Section 5.03(t) and
as to which the Collateral Agent does not have a perfected Lien; and
(u) as of the date of any Advance subsequent to the initial Advance,
amended forms of Schedules 4.01(b), (f), (o), (t), (v), (w), (x), (y) (z),
(dd) and (ii) to the extent necessary to make the representations and
warranties relating to such amended Schedules true and correct as of such
date.
SECTION 5.04. Operational and Financial Covenants. So long as any Advance
shall remain unpaid or any Lender shall have any Commitment hereunder, the
Borrower:
(a) Revenue. Shall not permit its Revenue for the period beginning on
the first day of the Borrower's fiscal year in which a date set forth below
occurs and ending
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on such date to be less than the amount corresponding to such date under
the heading "Revenue" set forth below:
--------------------------------
Date Revenue
--------------------------------
12/31/1999 $650,000
--------------------------------
03/31/2000 $305,000
--------------------------------
06/30/2000 $917,000
--------------------------------
09/30/2000 $3,050,000
--------------------------------
12/31/2000 $6,100,000
--------------------------------
03/31/2001 $3,350,000
--------------------------------
06/30/2001 $7,000,000
--------------------------------
09/30/2001 $15,800,000
--------------------------------
12/31/2001 $28,000,000
--------------------------------
03/31/2002 $17,000,000
--------------------------------
06/30/2002 $41,500,000
--------------------------------
09/30/2002 $74,000,000
--------------------------------
12/31/2002 $122,000,000
--------------------------------
03/31/2003 $50,000,000
--------------------------------
06/30/2003 $103,000,000
--------------------------------
09/30/2003 $165,000,000
--------------------------------
12/31/2003 $239,000,000
--------------------------------
03/31/2004 $80,800,000
--------------------------------
06/30/2004 $165,500,000
--------------------------------
09/30/2004 $265,500,000
--------------------------------
12/31/2004 $385,000,000
--------------------------------
03/31/2005 $125,000,000
--------------------------------
06/30/2005 $255,500,000
--------------------------------
09/30/2005 $397,500,000
--------------------------------
12/31/2005 $567,500,000
--------------------------------
03/31/2006 $179,000,000
--------------------------------
06/30/2006 $366,000,000
--------------------------------
09/30/2006 $561,500,000
--------------------------------
12/31/2006 $780,000,000
--------------------------------
(b) Total Voice Grade Equivalents. Shall not permit the total number
of Voice Grade Equivalents of the Borrower and its Subsidiaries as of any
date set forth below to be less than the number corresponding to such date
under the heading "Number" set forth below:
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Date Number
---- ------
12/31/1999 736
06/30/2000 1,784
12/31/2000 6,230
06/30/2001 21,968
12/31/2001 42,471
06/30/2002 136,555
12/31/2002 241,199
06/30/2003 356,268
12/31/2003 528,939
06/30/2004 645,959
12/31/2004 855,496
06/30/2005 974,049
12/31/2005 1,240,963
06/30/2006 1,364,914
12/31/2006 1,652,157
(c) EBITDA. Shall not permit EBITDA for the four fiscal quarters of
the Borrower immediately preceding any date set forth below to be less than
the amount set forth under the heading "Amount" corresponding to such date:
Date Amount
---- ------
12/31/1999 $(33,400,000)
06/30/2000 $(48,500,000)
12/31/2000 $(50,500,000)
06/30/2001 $(50,500,000)
12/31/2001 $(43,600,000)
06/30/2002 $(19,800,000)
12/31/2002 $16,500,000
06/30/2003 $45,300,000
12/31/2003 $82,500,000
06/30/2004 $108,500,000
12/31/2004 $169,000,000
06/30/2005 $199,000,000
12/31/2005 $269,900,000
06/30/2006 $305,500,000
12/31/2006 $389,000,000
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(d) Total Debt to Contributed Capital. Shall not permit the ratio of
(i) Total Debt outstanding as of any date of determination to (ii)
Contributed Capital as of such date of determination to be greater than the
ratio corresponding to the date set forth below on or at any time during
the 12 months immediately preceding such date:
Date Ratio
---- -----
12/31/1999 4.50x
12/31/2000 4.50x
12/31/2001 4.50x
12/31/2002 4.50x
12/31/2003 4.00x
12/31/2004 3.50x
12/31/2005 3.00x
12/31/2006 2.50x
(e) Total Secured Debt to Contributed Capital. Shall not permit the
ratio of (i) Total Debt owed by the Borrower secured by Shared Liens
outstanding as of any date of determination to (ii) Contributed Capital as
of such date of determination to be greater than the ratio corresponding to
the date set forth below on or immediately preceding such date:
Date Ratio
---- -----
12/31/1999 2.00x
06/30/2000 2.00x
12/31/2000 2.00x
06/30/2001 2.75x
12/31/2001 2.75x
06/30/2002 2.75x
12/31/2002 2.75x
06/30/2003 2.70x
12/31/2003 2.70x
06/30/2004 2.30x
12/31/2004 2.30x
06/30/2005 2.00x
12/31/2005 2.00x
06/30/2006 1.95x
12/31/2006 1.95x
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(f) Total Secured Debt to EBITDA (Cash Flow multiple). Shall not
permit the ratio of (i) Total Debt owed by the Borrower secured by Shared
Liens outstanding at of any date of determination to (ii) EBITDA for the
four consecutive fiscal quarters of the Borrower most recently ended on or
prior to such date of determination to exceed the ratio corresponding to
the date set forth below on or immediately proceeding such date of
determination:
Date Ratio
---- -----
12/31/2002 16.00x
06/30/2003 4.40x
12/31/2003 3.39x
06/30/2004 2.30x
12/31/2004 1.30x
06/30/2005 0.80x
12/31/2005 0.40x
06/30/2006 0.30x
12/31/2006 0.20x
(g) EBITDA to Total Cash Debt Service (Debt service coverage ratio).
Permit the ratio of (i) EBITDA for the four consecutive fiscal quarters
ending on any of the dates set forth below to (ii) Total Cash Debt Service
for the same period to be less than the ratio set forth below opposite such
date:
Date Ratio
---- -----
12/31/2002 0.44x
06/30/2003 0.58x
12/31/2003 0.85x
06/30/2004 1.05x
12/31/2004 1.40x
06/30/2005 1.50x
12/31/2005 2.00x
06/30/2006 3.00x
12/31/2006 5.50x
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ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Advance when
the same becomes due and payable or the Borrower shall fail to pay any
interest on any Advance or make any other payment of fees or other amounts
payable under this Agreement or any Note within three days after the same
becomes due and payable; or
(b) any representation or warranty made by any Loan Party (or any of
its officers) in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; provided that, if such
inaccuracy is capable of remedy and is in respect of any representation and
warranty other than those contained in Sections 4.01(a), (b), (c), (d),
(g), (h), (i), (j), (k), (n) and (y), such inaccuracy shall continue
unremedied for a period of 10 days; or
(c) either:
(i) the Borrower shall fail to perform or observe any term,
covenant or agreement contained in Section 2.13, 5.01(e), (f), (k) or
(n), 5.02 or 5.04, or
(ii) the Borrower shall fail to perform or observe any other
covenant in this Agreement or any Loan Party shall fail to perform or
observe any other covenant to be performed or observed by it in any
other Loan Document, and in any case such failure shall continue
unremedied for a period of 30 days; or
(d) any Security Agreement, once executed and delivered, shall cease
to provide to the Collateral Agent and the Lenders, with the Liens,
priority, security interests, rights, titles, interests, remedies, powers
and privileges intended to be created thereby; or
(e) any of the following shall occur:
(i) any License or portion thereof shall become invalid or
unenforceable or shall terminate or not be renewed and, with respect
to any such portion, such occurrence is reasonably likely to have a
material adverse effect on the ability of the Borrower to perform its
payment obligations under the Loan Documents;
80
(ii) any rights of the Borrower or any of its Subsidiaries
thereunder shall be changed and such change is reasonably likely to
have a material adverse effect on the ability of the Borrower to
perform its payment obligations under the Loan Documents;
(iii) any proceeding shall be commenced with the intention of
revoking the Licenses or a portion thereof that (A) has a reasonable
likelihood of succeeding and could reasonably be expected to prevent
the Borrower from operating a material portion of its Network or does
succeed in revoking all of the Licenses or (B) could reasonably be
expected to result in or which actually results in, a material adverse
effect on the ability of the Borrower to perform its payment
obligations under the Loan Documents; or
(iv) any Core Territory shall impose any obligation on the
Borrower or any of its Subsidiaries in respect of any License that is
reasonably likely to have a material adverse effect on the ability of
the Borrower to perform its payment obligations under the Loan
Documents; or
(f) either:
(i) the Borrower or any of its Subsidiaries shall fail to pay (A)
any principal of or premium or interest on or any other amount payable
in respect of any Debt or (B) any principal of any Subordinated Debt
or Intercompany Mirror Subordinated Debt, in each case that is
outstanding in a principal or notional amount of at least $5,000,000
in the aggregate (but excluding Debt outstanding hereunder) of the
Borrower or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event
shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate, or to permit
the acceleration of, the maturity of such Debt; or any such Debt shall
be declared to be due and payable, or required to be prepaid or
redeemed (other than by a regularly scheduled required prepayment or
redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(ii) the Parent shall fail to pay any principal of or premium or
interest on or any other amount payable in respect of any Debt that is
outstanding in a principal or notional amount of at least $5,000,000
in the aggregate, when the
81
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Debt; or any other event
shall occur or condition shall exist under any agreement or instrument
relating to any such Debt and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if
the effect of such event or condition is to accelerate the maturity of
such Debt; or any such Debt shall be declared to be due and payable,
or required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or redemption), purchased or defeased,
or an offer to prepay, redeem, purchase or defease such Debt shall be
required to be made, in each case prior to the stated maturity
thereof; or
(g) the Parent or any Loan Party shall generally not pay its debts as
such debts become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against the Parent,
any Loan Party or any of its Subsidiaries seeking to adjudicate it as
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
concordato, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency,
reorganization or concordato or relief of debtors, or seeking the entry of
an order for relief or the appointment of a receiver, trustee, custodian or
other similar official for it or for any substantial part of its property
and, in the case of any such proceeding instituted against it (but not
instituted by it) that is being diligently contested by it in good faith,
either such proceeding shall remain undismissed, unvacated or unstayed for
a period of 60 days, or any of the actions sought in such proceeding
(including without limitation the entry of an order for relief against, or
the appointment of a receiver, trustee, custodian or other similar official
for, it or for any substantial part of its property) shall occur; or the
Parent, any Loan Party or any of its Subsidiaries shall take any corporate
action to authorize any of the actions set forth above in this subsection
(g); or
(h) any judgment or order for the payment of money in excess of
$5,000,000 shall be rendered against the Parent, the Borrower or any of its
Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall
be any period of 60 consecutive days during which a stay of enforcement of
such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
(i) any non-monetary judgment or order shall be rendered against the
Borrower or any of its Subsidiaries that could be reasonably expected to
have a Material Adverse Effect, and there shall be any period of 30
consecutive days during which a stay
82
of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(j) the Borrower or any of its ERISA Affiliates shall incur, or in the
reasonable opinion of the Required Lenders shall be reasonably likely to
incur liability in excess of $1,000,000 in the aggregate as a result of one
or more of the following: (i) the occurrence of any ERISA Event; (ii) the
partial or complete withdrawal of the Borrower or any of its ERISA
Affiliates from a Multiemployer Plan; or (iii) the reorganization or
termination of a Multiemployer Plan; or
(k) any provision of any Loan Document after delivery thereof pursuant
to Section 3.01 shall for any reason cease to be valid and binding on or
enforceable against any Loan Party party to it, or any such Loan Party
shall so state in writing; or
(l) any material provisions of this Agreement or any other Loan
Document shall be or become invalid or unenforceable against the Loan
Parties that are parties thereto, or any Loan Party shall so assert; or
(m) a Change of Control shall occur; or the Borrower shall at any time
for any reason cease to be the record and beneficial owner of all of the
outstanding Equity Interests in its Subsidiaries other than any Equity
Interests held by other Persons as of the date hereof; or
83
(n) any Core Territory shall declare a moratorium on the payment of
external debt or impose any restrictions on access to foreign exchange or
transfer of funds, in any case, and such declaration or imposition is
reasonably likely to have a Material Adverse Effect; or
(o) there shall occur any condemnation, taking or expropriation of any
assets of the Borrower or any of its Subsidiaries that is reasonably likely
to result in a Material Adverse Effect; or
(p) in the view of the Lenders, a Material Adverse Change shall occur;
or
(q) any default on the part of the Borrower or any of its Subsidiaries
to comply with its obligations under Section 11.2 of the Supply Agreement
or any payment obligations set forth in any other agreements entered into
by the Borrower or any of its Subsidiaries with the Vendor or its
Affiliates; or
(r) the Parent or any of its direct or indirect Subsidiaries (other
than the Borrower and the other Loan Parties) shall engage to any material
extent in the business of providing data, voice or video services or any
business that competes with the business conducted by the Borrower and the
other Loan Parties, in each case, in any Core Territory;
then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Supermajority Lenders, by written notice to the
Borrower, declare the obligation of each Lender to make Advances to be
terminated, whereupon the same shall forthwith terminate, (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare the Notes, all interest thereon and all other amounts payable
under this Agreement to be forthwith due and payable, whereupon the Notes, all
such interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower, and (iii) shall at the
request, or may with the consent, of the Required Lenders, foreclose on any and
all of the Collateral in accordance with the terms of the relevant Security
Agreements; provided that upon the occurrence of an Event of Default under
clause 6.01(g) above, (A) the obligation of each Lender to make Advances shall
automatically be terminated and (B) the Notes, all such interest and all such
amounts shall automatically become and be due and payable, without presentment,
demand, protest or any notice of any kind, all of which are hereby expressly
waived by the Borrower.
84
ARTICLE VII
THE ADMINISTRATIVE AGENT
SECTION 7.01. Authorization and Action. Each Lender hereby appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers and discretion under this Agreement as are delegated
to the Administrative Agent by the terms hereof, together with such powers and
discretion as are reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement (including without limitation enforcement or
collection of the Notes), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions shall be binding upon all Lenders and all holders of Notes;
provided that the Administrative Agent shall not be required to take any action
that exposes the Administrative Agent to personal liability or that is contrary
to this Agreement or applicable law. The Administrative Agent agrees to give to
each Lender prompt notice of each notice given to it by the Borrower pursuant to
the terms of this Agreement.
SECTION 7.02. Agent's Reliance, Etc. Neither the Administrative Agent nor
any of its respective directors, officers, agents or employees shall be liable
for any action taken or omitted to be taken by it or them under or in connection
with this Agreement, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, the
Administrative Agent: (i) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives and accepts an Assignment and Acceptance
entered into by the Lender that is the payee of such Note, as assignor, and an
Eligible Assignee, as assignee, as provided in Section 8.07; (ii) may consult
with legal counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement on the part of the Borrower or to inspect the
property (including the books and records) of the Borrower; (v) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other instrument or document
furnished pursuant hereto; and (vi) shall incur no liability under or in respect
of this Agreement by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram or telex) believed
by it to be genuine and signed or sent by the proper party or parties.
SECTION 7.03. Agent and Affiliates. With respect to its Commitment, the
Advances made by it and the Note issued to it, if any, the Person serving as the
Administrative Agent hereunder shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the Administrative Agent; and the term
85
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include the
Administrative Agent in its individual capacity. Any Person serving as
Administrative Agent and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the Borrower, any of its
Subsidiaries and any Person who may do business with or own securities of the
Borrower or any such Subsidiary, all as if the Person serving as Administrative
Agent were not the Administrative Agent and without any duty to account therefor
to the Lenders.
SECTION 7.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements referred to in Section 4.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement.
SECTION 7.05. Indemnification. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Notes then held by each of
the Lenders (or if no Notes are at the time outstanding or if the Notes are held
by Persons that are not Lenders, ratably according to the respective amounts of
their Commitments), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever that may be imposed on, incurred
by, or asserted against the Administrative Agent, in any way relating to or
arising out of this Agreement or any action taken or omitted by the
Administrative Agent under this Agreement (collectively, the "Indemnified
Costs"); provided that no Lender shall be liable for any portion of the
Indemnified Costs resulting from the gross negligence or willful misconduct of
the Administrative Agent. Without limitation of the foregoing, each Lender
agrees to reimburse the Administrative Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including counsel fees) incurred by
it in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, to the extent that such agent is not
reimbursed for such expenses by the Borrower. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section 7.05
applies whether any such investigation, litigation or proceeding is brought by
the Administrative Agent, any Lender or a third party.
SECTION 7.06. Successor Agent. The Administrative Agent may resign at any
time by giving written notice thereof to the Lenders and the Borrower and may be
removed at any time with or without cause by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent. If no
86
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after such
retiring agent's giving of notice of resignation or the Required Lenders'
removal of such retiring agent, then such retiring agent may, on behalf of the
Lenders, appoint a successor Administrative Agent, which shall be a commercial
bank organized or licensed to do business under the laws of the United States of
America or of any State thereof and having a combined capital and surplus of at
least $1,000,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, discretion, privileges and duties of the retiring Administrative
Agent and the retiring Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any such retiring agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article VII 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.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided that
(a) no amendment, waiver or consent shall, unless in writing and
signed by all of the Lenders (other than any Lender Party that is, at such
time, a Defaulting Lender), do any of the following at any time:
(i) waive any of the conditions specified in Section 3.01 or, in
the case of the initial Advance, Section 3.02,
(ii) change the number of Lenders or the percentage of (A) the
Commitments, or (B) the aggregate unpaid principal amount of the
Advances that, in each case, shall be required for the Lenders or any
of them to take any action hereunder,
(iii) reduce or limit the obligations of any Guarantor under
Section 1.0 of its Guaranty or otherwise limit any Guarantor's
liability with respect to the Obligations owing to any Agent and the
Lenders,
87
(iv) release any Collateral in any transaction or series of
related transactions or permit the creation, incurrence, assumption or
existence of any Lien on any item of Collateral in any transaction or
series of related transactions to secure any Obligations other than
Obligations owing to the Secured Creditors under the Loan Documents,
(v) amend this Section 8.01,
(vi) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations,
(vii) reduce the principal of, or interest on, the Advances or
any fees or other amounts payable hereunder,
(viii) postpone any date fixed for any payment of principal of,
or interest on, the Borrowings or any fees or other amounts payable,
or
(ix) limit the liability of any Loan Party under any of the Loan
Documents, and
(b) no amendment, waiver or consent shall, unless in writing and
signed by an Agent in addition to the Lenders required above to take such
action, affect the rights or (in the case of the Administrative Agent)
duties of such Agent under this Agreement.
88
SECTION 8.02. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic or telex
communication) and mailed, telecopied, telegraphed, telexed or delivered, if to
the Borrower, at its address at Diginet Americas, Inc.,3201 ▇▇▇ ▇▇▇▇▇▇ ▇▇▇. ▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇; if to the
Initial Lender, at its Lending Office specified opposite its name on the
signature pages hereto; if to any other Lender, at its Lending Office specified
in the Assignment and Acceptance pursuant to which it became a Lender; and if to
the Administrative Agent, at its address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: Assistant Treasurer - Customer Finance, Fax: (▇▇▇) ▇▇▇-▇▇▇▇;
or, as to the Borrower or the Administrative Agent, at such other address as
shall be designated by such party in a written notice to the other parties and,
as to each other party, at such other address as shall be designated by such
party in a written notice to the Borrower and the Administrative Agent. All such
notices and communications shall, when hand delivered, telecopied, telegraphed
or telexed, be effective when hand delivered, telecopied, delivered to the
telegraph company or confirmed by telex answerback, respectively, and when sent
by regular mail, postage prepaid, return receipt requested shall be effective 5
days after the date of its deposit in the mails, except that notices and
communications to the Administrative Agent pursuant to Article II, III or VII
shall not be effective until received by the Administrative Agent. Delivery by
telecopier of an executed counterpart of any amendment or waiver of any
provision of this Agreement or the Notes or of any Exhibit to be executed and
delivered hereunder shall be effective as delivery of a manually executed
counterpart thereof.
SECTION 8.03. No Waiver; Remedies. No failure on the part of any Lender,
the Administrative Agent or the Collateral Agent to exercise, and no delay in
exercising, any right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs and Expenses; Indemnification. (a) The Borrower will
pay on demand
(i) all costs and expenses of the Administrative Agent and the Lenders
in connection with the preparation, execution, delivery, administration,
modification and amendment of the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, syndication,
transportation, computer, duplication, appraisal, audit, insurance,
consultant, search, filing and recording fees and expenses, (B) the
reasonable fees and expenses of a single counsel for the Agents in each
relevant jurisdiction with respect thereto, and (C) the reasonable fees and
expenses of a single counsel for the Agents in each relevant jurisdiction
with respect to advising the Agents as to their respective rights and
responsibilities, or the perfection, protection or preservation of rights
or interests, under the Loan Documents, with respect to negotiations with
any Loan Party or with other creditors of any Loan Party or any of its
Subsidiaries arising out of any Default or any events or circumstances that
may give rise to a Default and with
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respect to presenting claims in or otherwise participating in or monitoring
any bankruptcy, insolvency or other similar proceeding involving creditors'
rights generally and any proceeding ancillary thereto), and
(ii) all costs and expenses of the Administrative Agent and the Lender
Parties in connection with the enforcement of the Loan Documents, whether
in any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally (including,
without limitation, the reasonable fees and expenses of a single counsel
for the Administrative Agent and each Lender Party in each relevant
jurisdiction with respect thereto).
(b) The Borrower will indemnify and hold harmless the Administrative Agent
and each Lender and each of their Affiliates and their officers, directors,
employees, agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses (including without
limitation reasonable fees and expenses of counsel) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case arising in any
way out of or in connection with or by reason of (i) the Notes, this Agreement,
any of the transactions contemplated herein or the actual or proposed use of the
proceeds of the Advances, except to the extent such claim, damage, loss,
liability or expense resulted from such Indemnified Party's gross negligence or
willful misconduct. In the case of an investigation, litigation or other
proceeding to which the indemnity in this Section 8.04(b) applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by the Borrower, its directors, shareholders or creditors
or an Indemnified Party or any other Person or any Indemnified Party is
otherwise a party thereto and whether or not the transactions contemplated
hereby are consummated. The Borrower also agrees not to assert any claim against
the Agent, any Lender, any of their Affiliates, or any of their respective
directors, officers, employees, attorneys and agents, on any theory of
liability, for special, indirect, consequential or punitive damages arising out
of or otherwise relating to the Notes, this Agreement, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Advances.
(c) If any payment of principal of any Advance is made by the Borrower to
or for the account of a Lender other than on the last day of the Interest Period
for such Advance, as a result of a payment pursuant to Section 2.09(c) and (d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, the Borrower shall, upon written demand by such Lender (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Lender any amounts reasonably required to
compensate such Lender for any additional losses, costs or expenses that it may
reasonably incur as a result of such payment, including without limitation any
loss, cost or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such Advance.
The loss to any Lender attributable to any such event shall be deemed to be an
amount determined by such Lender to be equal to the excess, if any, of (i) the
amount of interest that such Lender would pay for a deposit equal to the
principal amount of the applicable Eurodollar Rate Advance so prepaid or
accelerated, as applicable, for the period from the date of such payment or
acceleration to the last day of the then current Interest Period for
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such Eurodollar Rate Advance if the interest rate payable on such deposit were
equal to the Eurodollar Rate for such Interest Period, over (ii) the amount of
interest that such Lender would earn on such principal amount for such period if
such Lender were to invest such principal amount for such period at the interest
rate that would be bid by such Lender (or an Affiliate of such Lender) for
dollar deposits from other banks in the eurodollar market at the commencement of
such period. A certificate as to the amount of such loss, cost or expense,
submitted to the Borrower by such Lender, shall be conclusive and binding for
all purposes, absent manifest error.
(d) If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Agents or any Lender Party, in its sole discretion.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
Sections 2.09, 2.11 and 8.04 shall survive the payment in full of principal,
interest and all other amounts payable hereunder and under the Notes.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender or such Affiliate to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement and the Note held by such Lender,
whether or not such Lender shall have made any demand under this Agreement or
such Note and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower in writing after any such set-off and
application; provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender and its
Affiliates under this Section 8.05 are in addition to other rights and remedies
(including without limitation other rights of set-off) that such Lender and its
Affiliates may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective (other
than Section 2.01(a), which shall only become effective upon satisfaction of the
conditions precedent set forth in Sections 3.01), when (i) this Agreement shall
have been executed by the Borrower, the Administrative Agent and the Initial
Lender, and thereafter this Agreement shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of the Lenders.
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SECTION 8.07. Assignments and Participations. (a) Each Lender may assign to
an Eligible Assignee all or a portion of its rights and obligations under this
Agreement (including without limitation all or a portion of its Commitment, the
Advances owing to it and the Note or Notes held by it and either outstanding
Advances or Commitments); provided that (i) except in the case of an assignment
to a Person that, immediately prior to such assignment, was a Lender or an
assignment of all of a Lender's rights and obligations under this Agreement, the
amount of the Advances and unfunded Commitment of the assigning Lender being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 (except that this clause shall not prohibit the assignment
of a Fronting Commitment as contemplated by Section 2.02 in an amount equal to
the Advance that the Initial Lender would have made but for such assignment) and
(ii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note subject to such assignment
and, except in the case of an assignment by the Initial Lender, a processing and
recordation fee of $3,500. Notwithstanding the foregoing, nothing in this
Section shall be construed to prohibit the assignment of a proportionate part of
all of the assigning Lender's rights and obligations in respect of (A) Advances
separately from (or without assigning) Commitments, (B) Commitments separately
from (or without assigning) Advances, (C) Tranche A Commitments or Tranche A
Advances separately from (or without assigning) Tranche B Commitments or Tranche
B Advances or (D) Tranche B Commitments or Tranche B Advances separately from
(or without assigning) Tranche A Commitments or Tranche A Advances. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, (x) the assignee thereunder shall
be a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it pursuant to such Assignment and Acceptance, have the rights
and obligations of a Lender hereunder and (y) the Lender assignor thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall upon
such assignment cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance, the Lender
assignor thereunder and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) other than as provided in
such Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of, or the perfection or priority of any lien or security interest created
or purported to be created under or in connection with, this Agreement or any
other instrument or document furnished pursuant hereto; (ii) such assigning
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement and the Intercreditor
Agreement, together with copies of the
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financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent and the Collateral Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement as
are delegated to the Administrative Agent and the Collateral Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement and the
Intercreditor Agreement are required to be performed by it as a Lender.
(c) The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Commitment of, and principal amount of the Advances owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent, the Collateral Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note or Notes subject to such assignment, the Administrative
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit C, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii) give
prompt written notice thereof to the Borrower. Within five Business Days after
its receipt of such notice and at the request of such assignee Lender, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent in exchange for any surrendered Note a new Note to the order of such
Assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a Commitment
hereunder, a new Note to the order of the assigning Lender in an amount equal to
the Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of Exhibit A.
(e) Each Lender may sell participations to one or more banks or other
entities (other than the Borrower or any of its Affiliates) in or to all or a
portion of its rights and obligations under this Agreement (including without
limitation all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); provided that (i) such
93
Lender's obligations under this Agreement (including without limitation its
Commitment to the Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) such Lender shall remain the holder of any such Note
for all purposes of this Agreement, (iv) the Borrower, the Administrative Agent,
the Collateral Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of this Agreement or any Note, or any consent to any departure by the
Borrower therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or to the extent that any such
amendment or consent provides for a release of the Borrower's obligations under
the Security Agreements or any Subsidiary's obligations under any Guaranty.
(f) Any Lender may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 8.07, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Lender by or on behalf of the
Borrower; provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing to
preserve the confidentiality of any Confidential Information relating to the
Borrower received by it from such Lender.
(g) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time create a security interest in all or any portion of its
rights under this Agreement (including without limitation the Advances owing to
it and the Note held by it) in favor of any Federal Reserve Bank in accordance
with Regulation A of the Board of Governors of the Federal Reserve System.
SECTION 8.08. Confidentiality. Neither the Administrative Agent nor any
Lender shall disclose any Confidential Information to any other Person without
the consent of the Borrower, other than (a) to the Administrative Agent's, the
Collateral Agent or such Lender's Affiliates and their officers, directors,
employees, agents and advisors and, as contemplated by Section 8.07(f), to
actual or prospective assignees and participants, and then only on a
confidential basis, (b) to any party to the Intercreditor Agreement, (c) as
required by any law, rule or regulation or judicial process and (d) as requested
or required by any state, federal or foreign authority or examiner regulating
banks or banking.
SECTION 8.09. Governing Law. This Agreement and the Notes shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 8.10. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of
94
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by telecopier shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 8.11. Jurisdiction, Judgment Currency, Etc. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City in the
Borough of Manhattan, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the Notes, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that any party may otherwise have to bring any action or
proceeding relating to this Agreement or the Notes in the courts of any
jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that 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 the Notes in any New
York State or federal court. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(c) (i) If, for the purpose of obtaining judgment in any court, it is
necessary to convert a sum due hereunder to any party hereunder in one currency
into another currency, the parties hereto agree, to the fullest extent permitted
by law, that the rate of exchange used shall be that at which in accordance with
its normal banking procedures such party could purchase the first currency with
such other currency on the day which is at least two Business Days prior to the
day on which final judgment is rendered.
(ii) To the fullest extent permitted by law, the obligation of any party in
respect of any sum payable hereunder by it to any other party hereunder shall,
notwithstanding any judgment in a currency (the "Judgment Currency") other than
Dollars (the "Agreement Currency"), be discharged only to the extent that on the
Business Day following receipt by such other party of any sum adjudged to be so
due in the Judgment Currency such other party may in accordance with normal
banking procedures purchase the Agreement Currency with the Judgment Currency;
if the amount of the Agreement Currency which could have been so purchased is
less than the sum originally due to such other party in the Agreement Currency,
such first party agrees, as a separate obligation and notwithstanding any such
judgment, to indemnify such other party against such loss, and, if the amount of
the Agreement Currency which could have been so purchased exceeds the sum
originally due to such other party, such
95
other party agrees to remit to such first party such excess; provided that
neither any Lender nor the Administrative Agent shall have any obligation to
remit any such excess as long as the Borrower shall have failed to pay any
Lender or the Administrative Agent, as the case may be, any obligations due and
payable under this Agreement, in which case such excess may be applied to such
obligations of the Borrower hereunder in accordance with the terms of this
Agreement.
SECTION 8.12. Waiver of Jury Trial. Each of the Borrower, the
Administrative Agent and the Lenders hereby irrevocably waive, to the extent
permitted by 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 this Agreement or the Notes or the actions of any Agent or any
Lender in the negotiation, administration, performance or enforcement thereof.
SECTION 8.13. Intercreditor Arrangements. Each of the Lenders and the
Borrower acknowledge that the Lenders hereunder, together with any Other Secured
Creditors, shall be considered to be joint creditors (credores solidarios) with
respect to the Obligations under the Loan Documents and the obligations owed to
such Other Secured Creditors; provided that if requested by the Borrower, any
Other Secured Creditors or potential Other Secured Creditors, the Lenders and
the Agents agree to negotiate in good faith with a view to agreeing to a
substitute structure governing the equal sharing of Collateral under Brazilian
law and to documentation reflecting such structure.
SECTION 8.14. Intercreditor Agreement; Amendments to Ericsson Credit
Agreement. Except with the consent of the Borrower, the Lenders shall not amend
or modify Section 4.1(a) of the Intercreditor Agreement in a manner that would
add to the limitations set forth therein on the ability of the lenders party to
any Permitted Loan Agreement (as defined in the Intercreditor Agreement) to
agree to amendments to or modifications of such Permitted Loan Agreement. The
Borrower shall not enter into any amendment to or modification of the Ericsson
Credit Agreement unless it shall at the same time have offered to enter into an
amendment to or modification of this Agreement on substantially the same terms.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
DIVEO, INC.
By
-------------------------------------
Title:
LUCENT TECHNOLOGIES INC., as
Administrative Agent and Initial Lender
By
-------------------------------------
Title:
Tranche A Commitment: $62,500,000 LUCENT TECHNOLOGIES INC.
Tranche B Commitment: $37,500,000
(plus undrawn Tranche A Commitments
at the Tranche A Termination Date)
Lending Office and Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Assistant Treasurer - Customer Finance
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
EXECUTION COPY
WAIVER AND AMENDMENT NO. 2
TO THE CREDIT AGREEMENTS
Dated as of March 24, 2000
To: Ericsson Credit AB, as Lender
under the Ericsson Credit Agreement referred to below
Lucent Technologies Inc., as Lender
under the Lucent Credit Agreement referred to below
Ladies and Gentlemen:
We refer to the Amended and Restated Credit Agreement dated as of
November 24, 1999 (as amended pursuant to Waiver and Amendment No.1 to the
Credit Agreements dated as of January 14, 2000 and as otherwise amended or
modified from time to time, the "Ericsson Credit Agreement"), among Diveo, Inc.
-------------------------
(the "Borrower"), Ericsson Credit AB, as Initial Lender, and Ericsson Credit AB,
--------
as Administrative Agent ("Ericsson") and to the Credit Agreement dated as of
--------
November 22, 1999 (as amended pursuant to Waiver and Amendment No.1 to the
Credit Agreements dated as of January 14, 2000 and as otherwise amended or
modified from time to time, the "Lucent Credit Agreement", and together with the
-----------------------
Ericsson Credit Agreement, the "Credit Agreements"), among Diveo, Inc. (the
-----------------
"Borrower"), Lucent Technologies Inc., as Initial Lender, and Lucent
--------
Technologies Inc., as Administrative Agent ("Lucent"). With respect to each
------
Credit Agreement, capitalized terms not otherwise defined in this Waiver and
Amendment No. 2 have the same meanings as specified in such Credit Agreement.
1. We hereby request from Ericsson that the Ericsson Credit Agreement be
amended as follows:
(a) The first paragraph of the recitals to the Agreement be deleted in its
entirety and replaced with the following:
"The Borrower has been formed in order to plan, construct,
operate and maintain digital wireless local loop voice and data
networks and Internet infrastructure for web hosting, collocation and
other enhanced Internet services (each, a "Network") in the United
-------
States of America, Mexico, Central America and South America (the
"Territory") (the planning, construction, operation and maintenance of
---------
the Networks being the "Project")."
-------
(b) The definition of "Blocked Account" be amended by inserting the words
"owing to the Vendor" before the phrase "under the Supply Agreement".
(c) The definition of "Core Territories" be deleted in its entirety and
replaced with the following:
""Core Territories" means the United States of America,
----------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ and Uruguay."
(d) The definition of "Tranche B Commitment" be deleted in its entirety
and replaced with the following:
""Tranche B Commitment" means, with respect to any Lender at any
--------------------
time, the amount set forth opposite such Lender's name on the
signature page hereof or, if such Lender has entered into one or more
Assignment and Acceptances, set forth in the Register maintained by
the Administrative Agent pursuant to Section 8.07(c) as such Lender's
"Tranche B Commitment", as such amount may be reduced from time to
time pursuant to Section 2.04."
(e) The definition of "Tranche B Effective Date" be deleted in its
entirety and replaced with the following:
""Tranche B Effective Date" means, with respect to the Tranche B
------------------------
Commitments of the Lenders, January 1, 2001."
(f) The definition of "Tranche B Termination Date" be deleted in its
entirety and replaced with the following:
""Tranche B Termination Date" means the earlier of the eighteen
--------------------------
month anniversary of the Tranche B Effective Date and the date of
termination in whole of the Tranche B Commitments pursuant to Section
2.04 or 6.01."
(g) Section 2.01 be amended as follows:
(i) The second sentence of Section 2.01(a) be deleted in its entirety
and replaced by the following: "Each Borrowing consisting of
Tranche A Advances shall be in an amount not exceeding (i)
amounts owing under invoices (A) issued or accepted by the Vendor
pursuant to the Supply Agreement during the period from the
16/th/ day of the month preceding the month in which the date of
the proposed Borrowing falls to the 16/th/ day of the month in
which the date of the proposed Borrowing falls and (B) that were
not paid with the proceeds of any prior Borrowing and (ii)
interest owing on Borrowings to be paid with the proceeds
thereof."; and
(ii) The second sentence of Section 2.01(b) be deleted in its entirety
and replaced by the following: "Each Borrowing consisting of
Tranche B Advances shall be in an amount not exceeding (i)
amounts owing under invoices (A) issued or accepted by the Vendor
pursuant to the Supply
Agreement during the period from the 16/th/ day of the month
preceding the month in which the date of the proposed Borrowing
falls to the 16/th/ day of the month in which the date of the
proposed Borrowing falls and (B) that were not paid with the
proceeds of any prior Borrowing and (ii) interest owing on
Borrowings to be paid with the proceeds thereof."
(h) Section 2.02(a) be amended as follows:
(i) Insertion of a new subclause (C): "whether such Borrowing will
be a Tranche A Borrowing or a Tranche B Borrowing,"; and the
renaming of existing subclause (C) as subclause (D); and
(ii) Insertion of a new subclause (E): "the third party invoices for
Ancillary Services (as defined in Annex 6 to the Supply
Agreement) to be paid with the proceeds of such Borrowing, the
respective amounts of such invoices to be paid and the aggregate
amount of such invoices to be paid, and"; and the renaming of
existing subclause (D) as subclause (F).
(i) Section 2.03(b) be amended as follows:
The word "1.10%" contained in the third to last line of Section
2.03(b) be deleted and replaced with the word "1.45%".
(j) Section 2.05(b) be amended as follows:
The first sentence be deleted and replaced with the following:
"The Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders that have made Tranche B Advances the aggregate
outstanding principal amount of the Tranche B Advances in nine
installments (i) the first of which shall be payable on January 1,
2003 and (ii) otherwise payable on the last day of every sixth
calendar month after the twenty-four month anniversary of the Tranche
B Effective Date, each in an amount equal to the product obtained by
multiplying (a) the unpaid principal amount of such Tranche B Advances
outstanding on the Tranche B Termination Date by (b) 11.111%; provided
--------
that the last such installment shall be in an amount necessary to
repay in full the unpaid principal amount of the Tranche B Advances."
(k) Section 2.13 be amended as follows:
(i) deleting the last sentence in its entirety and replacing it with
the following:
"The proceeds of the Advances available to make Back-to-Back
Loans described in clause (a) of the preceding sentence shall be
paid directly to the financial institution providing Back-to-Back
Loans and the proceeds of such Back-to-Back Loans made to
Operating Subsidiaries in Argentina, Brazil, Peru and Uruguay (in
the case of Uruguay, subject to applicable
law) to be used to pay invoices issued by the Vendor under the
Supply Agreement shall at all times be held in Blocked Accounts
until disbursed to pay invoices owing to the Vendor under the
Supply Agreement."; and
(ii) adding after the first paragraph a second paragraph to read as
follows:
"Notwithstanding anything in the Supply Agreement to the
contrary, the Operating Subsidiaries shall use commercially
reasonable efforts to use the proceeds of the Back-to-Back Loans
to pay amounts owing under invoices issued or accepted by the
Vendor pursuant to the Supply Agreement, and as specified in the
related Notice of Borrowing, no later than the last day of the
month in which such proceeds were received."
(l) Section 5.02(a) be amended as follows:
(i) insertion of a new clause (xii) containing the following:
"Debt in the form of promissory notes issued to the selling
stockholders in connection with the acquisition of INEA, S.A.,
in a principal amount not to exceed $2,800,000, and";
(ii) the existing clause (xii) of Section 5.02(a) be renamed clause
(xiii), and the word "(xi)" in the second line of the renamed
clause (xiii) be deleted and replaced with the word "(xii)"; and
(iii) clause (vi) be deleted in its entirety and replaced with the
following:
"(vi) Debt incurred in connection with the entering into by the
Borrower or a Subsidiary thereof of Capitalized Leases in
aggregate principal amount (including any such Debt incurred to
refinance such Debt, as permitted by clause (xii) below) at any
one time outstanding not exceeding (A) $100,000,000, with
respect to any indefeasible rights of use of fiber and (B)
$10,000,000, with respect to Capitalized Leases other than
indefeasible rights of use of fiber,"
(m) Section 5.02(o) be deleted in its entirety and replaced with the
following:
"(o) Gross PP&E. Make or permit its Subsidiaries to make any
----------
Capital Expenditures that would cause the Gross PP&E of the
Borrower and its Subsidiaries in any period set forth below to
exceed the amount set forth below for such period.
Year Ending In Amount
-------------- ------
12/31/99 $ 115,000,000
12/31/00 $ 325,564,000
12/31/01 $ 466,052,000
12/31/02 $ 587,322,000
12/31/03 $ 716,357,000
12/31/04 $ 867,065,000
12/31/05 $1,028,336,000
12/31/06 $1,204,626,000
"
(n) Section 5.02(p) be deleted in its entirety and replaced with the
following:
"(p) Lease Obligations. Create, incur, assume or suffer to exist,
-----------------
or permit any of its Subsidiaries to create, incur, assume
or suffer to exist
(i) any obligations as lessee for the rental or hire of
real or personal property of any kind under leases or
agreements to lease having a term of one year or more
from the date of execution thereof (other than
Capitalized Leases) that would cause the direct and
contingent liabilities of it and its Subsidiaries, on a
Consolidated basis, in respect of all such obligations
in any period set forth below to exceed the amount set
forth below for such period;
Year Ending In Amount
-------------- ------
12/31/99 $ 7,500,000
12/31/00 $12,723,000
12/31/01 $18,283,000
12/31/02 $31,472,000
12/31/03 $42,835,000
12/31/04 $55,702,000
12/31/05 $69,685,000
12/31/06 $86,153,000
or
(ii) any obligations under Capitalized Leases that would
cause the direct and contingent liabilities of it and its
Subsidiaries, on a Consolidated basis, in respect of all
such obligations to exceed at any time (A) $100,000,000,
with respect to indefeasible rights of use of fiber and (B)
$10,000,000, with respect to Capitalized Leases other than
indefeasible rights of use of fiber."
(o) Section 5.04(a) be deleted in its entirety and replaced with the
following:
"(a) Revenue. Shall not permit its Revenue for the
-------
period beginning on the first day of the Borrower's fiscal year
in which a date set forth below occurs and ending on such date to
be less than the amount corresponding to such date under the
heading "Revenue" set forth below:
Date Revenue
-------
----------------------------------------------------
12/31/1999 $ 650,000
----------------------------------------------------
03/31/2000 $ 519,000
----------------------------------------------------
06/30/2000 $ 1,530,000
----------------------------------------------------
09/30/2000 $ 3,165,000
----------------------------------------------------
12/31/2000 $ 6,501,000
----------------------------------------------------
03/31/2001 $ 4,739,000
----------------------------------------------------
06/30/2001 $ 11,659,000
----------------------------------------------------
09/30/2001 $ 21,275,000
----------------------------------------------------
12/31/2001 $ 34,331,000
----------------------------------------------------
03/31/2002 $ 21,066,000
----------------------------------------------------
06/30/2002 $ 52,052,000
----------------------------------------------------
09/30/2002 $ 96,045,000
----------------------------------------------------
12/31/2002 $ 157,550,000
----------------------------------------------------
03/31/2003 $ 69,264,000
----------------------------------------------------
06/30/2003 $ 155,844,000
----------------------------------------------------
09/30/2003 $ 249,350,000
----------------------------------------------------
12/31/2003 $ 346,319,000
----------------------------------------------------
03/31/2004 $ 117,257,000
----------------------------------------------------
06/30/2004 $ 263,828,000
----------------------------------------------------
09/30/2004 $ 422,124,000
----------------------------------------------------
12/31/2004 $ 586,283,000
----------------------------------------------------
03/31/2005 $ 177,795,000
----------------------------------------------------
06/30/2005 $ 389,456,000
----------------------------------------------------
09/30/2005 $ 618,049,000
----------------------------------------------------
12/31/2005 $ 846,643,000
----------------------------------------------------
03/31/2006 $ 239,958,000
----------------------------------------------------
06/30/2006 $ 512,637,000
----------------------------------------------------
09/30/2006 $ 796,223,000
----------------------------------------------------
12/31/2006 $1,090,717,000
----------------------------------------------------
"
(p) Section 5.04(b) be deleted in its entirety and replaced with the
following:
"(b) Total Voice Grade Equivalents. Shall not permit the total
-----------------------------
number of Voice Grade Equivalents of the Borrower and its
Subsidiaries as of any
date set forth below to be less than the number corresponding to such
date under the heading "Number" set forth below:
Date Number
---- ------
12/31/1999 736
06/30/2000 3,071
12/31/2000 9,040
06/30/2001 22,999
12/31/2001 50,859
06/30/2002 154,612
12/31/2002 251,548
06/30/2003 398,177
12/31/2003 544,806
06/30/2004 723,723
12/31/2004 902,639
06/30/2005 1,074,614
12/31/2005 1,246,590
06/30/2006 1,428,556
12/31/2006 1,610,522
"
(q) Section 5.04(c) be deleted in its entirety and replaced with the
following:
"(c) EBITDA. Shall not permit EBITDA for the four fiscal quarters
------
of the Borrower immediately preceding any date set forth below to
be less than the amount set forth under the heading "Amount"
corresponding to such date:
Date Number
---- ------
12/31/1999 $ (33,400,000)
06/30/2000 $ (65,781,000)
12/31/2000 $ (99,000,000)
06/30/2001 $(104,973,000)
12/31/2001 $ (94,147,000)
06/30/2002 $ (70,976,000)
12/31/2002 $ (18,000,000)
06/30/2003 $ 63,982,000
12/31/2003 $ 106,506,000
06/30/2004 $ 174,099,000
12/31/2004 $ 254,406,000
06/30/2005 $ 332,296,000
12/31/2005 $ 404,196,000
$ 482,098,000
Date Number
---- ------
06/30/2006
12/31/2006 $ 543,904,000
"
(r) Section 5.04(d) be deleted in its entirety and replaced with the
following:
"(d) Total Debt to Contributed Capital. Shall not permit the
---------------------------------
ratio of (i) Total Debt outstanding as of any date of
determination to (ii) Contributed Capital as of such date of
determination to be greater than the ratio corresponding to the
date set forth below on or at any time during the 12 months
immediately preceding such date:
Date Ratio
---- -----
12/31/1999 4.50x
12/31/2000 2.50x
12/31/2001 2.50x
12/31/2002 2.50x
12/31/2003 2.50x
12/31/2004 2.50x
12/31/2005 2.50x
12/31/2006 2.50x
"
(s) Section 5.04(e) be deleted in its entirety and replaced with the
following:
"(e) Total Secured Debt to Contributed Capital. Shall not permit
-----------------------------------------
the ratio of (i) Total Debt owed by the Borrower secured by
Shared Liens outstanding as of any date of determination to (ii)
Contributed Capital as of such date of determination to be
greater than the ratio corresponding to the date set forth below
on or immediately preceding such date:
Date Ratio
---- -----
12/31/1999 2.00x
06/30/2000 1.75x
12/31/2000 1.75x
06/30/2001 1.75x
12/31/2001 1.75x
06/30/2002 1.75x
12/31/2002 1.75x
06/30/2003 1.75x
12/31/2003 1.75x
06/30/2004 1.75x
1.75x
Date Ratio
---- -----
12/31/2004
06/30/2005 1.75x
12/31/2005 1.75x
06/30/2006 1.75x
12/31/2006 1.75x
"
(t) Section 5.04(f) be deleted in its entirety and replaced with the
following:
"(f) Total Secured Debt to EBITDA (Cash Flow multiple). Shall not
-------------------------------------------------
permit the ratio of (i) Total Debt owed by the Borrower secured
by Shared Liens outstanding at of any date of determination to
(ii) EBITDA for the four consecutive fiscal quarters of the
Borrower most recently ended on or prior to such date of
determination to exceed the ratio corresponding to the date set
forth below on or immediately proceeding such date of
determination:
Date Ratio
---- -----
12/31/2002 N/A
06/30/2003 6.06x
12/31/2003 3.90x
06/30/2004 2.30x
12/31/2004 1.30x
06/30/2005 0.80x
12/31/2005 0.40x
06/30/2006 0.30x
12/31/2006 0.20x
"
(u) Section 5.04(g) be deleted in its entirety and replaced with the
following:
"(g) EBITDA to Total Cash Debt Service (Debt service coverage
--------------------------------------------------------
ratio). Permit the ratio of (i) EBITDA for the four consecutive
-----
fiscal quarters ending on any of the dates set forth below to
(ii) Total Cash Debt Service for the same period to be less than
the ratio set forth below opposite such date:
Date Ratio
---- -----
12/31/2002 N/A
12/31/2002 0.58x
12/31/2003 0.62x
06/30/2004 1.05x
Date Ratio
---- -----
12/31/2004 1.40x
06/30/2005 1.50x
12/31/2005 2.00x
06/30/2006 3.00x
12/31/2006 3.65x
"
(v) Section 5.02(f) be deleted in its entirety and replaced with the
following:
"(f) Other Business. Engage or permit any Subsidiary to engage,
--------------
directly or indirectly, in any business other than the offering of
data, voice or video services in the Territory, whether as a
competitive access provider, a competitive local exchange carrier,
Internet access provider or provider of enhanced Internet services."
(w) Section 6.01(q) be amended by inserting the words "of Annex 6"
immediately before the phrase "of the Supply Agreement".
(x) The signature page be amended by deleting the words "(plus undrawn
Tranche A Commitments at the Tranche A Termination Date)" from the
Tranche B Commitment language set forth opposite Ericsson's name
thereon.
2. We hereby request from Lucent that the Lucent Credit Agreement be amended
as follows:
(a) The first paragraph of the recitals to the Agreement be deleted in its
entirety and replaced with the following:
"The Borrower has been formed in order to plan, construct,
operate and maintain digital wireless local loop voice and data
networks and Internet infrastructure for web hosting, collocation and
other enhanced Internet services (each, a "Network") in the United
-------
States of America, Mexico, Central America and South America (the
"Territory") (the planning, construction, operation and maintenance of
---------
the Networks being the "Project")."
-------
(b) The definition of "Blocked Account" be amended by inserting the words
"owing to the Vendor" before the phrase "under the Supply Agreement".
(c) The definition of "Core Territories" be deleted in its entirety and
replaced with the following:
""Core Territories" means the United States of America,
----------------
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ and Uruguay."
(d) The definition of "Tranche B Commitment" be deleted in its entirety
and replaced with the following:
""Tranche B Commitment" means, with respect to any Lender at any
--------------------
time, the amount set forth opposite such Lender's name on the
signature page hereof or, if such Lender has entered into one or more
Assignment and Acceptances, set forth in the Register maintained by
the Administrative Agent pursuant to Section 8.07(c) as such Lender's
"Tranche B Commitment", as such amount may be reduced from time to
time pursuant to Section 2.04."
(e) The definition of "Tranche B Effective Date" be deleted in its
entirety and replaced with the following:
""Tranche B Effective Date" means, with respect to the Tranche B
------------------------
Commitments of the Lenders, January 1, 2001."
(f) The definition of "Tranche B Termination Date" be deleted in its
entirety and replaced with the following:
""Tranche B Termination Date" means the earlier of the eighteen
--------------------------
month anniversary of the Tranche B Effective Date and the date of
termination in whole of the Tranche B Commitments pursuant to Section
2.04 or 6.01."
(g) Section 2.01 be amended as follows:
(i) The second sentence of Section 2.01(a) be deleted in its entirety
and replaced by the following: "Each Borrowing consisting of
Tranche A Advances shall be in an amount not exceeding (i)
amounts owing under invoices (A) issued or accepted by the Vendor
pursuant to the Supply Agreement during the period from the 16th
day of the month preceding the month in which the date of the
proposed Borrowing falls to the 16th day of the month in which
the date of the proposed Borrowing falls and (B) that were not
paid with the proceeds of any prior Borrowing and (ii) interest
owing on Borrowings to be paid with the proceeds thereof."; and
(ii) The second sentence of Section 2.01(b) be deleted in its entirety
and replaced by the following: "Each Borrowing consisting of
Tranche B Advances shall be in an amount not exceeding (i)
amounts owing under invoices (A) issued or accepted by the Vendor
pursuant to the Supply Agreement during the period from the 16th
day of the month preceding the month in which the date of the
proposed Borrowing falls to the 16th day of the month in which
the date of the proposed Borrowing falls and (B) that were not
paid with the proceeds of any prior Borrowing and (ii) interest
owing on Borrowings to be paid with the proceeds thereof."
(h) Section 2.02(a)(ii) be amended as follows:
(i) Insertion of a new subclause (C): "whether such Borrowing will
be a Tranche A Borrowing or a Tranche B Borrowing,"; and the
renaming of existing subclauses (C) and (D) as new subclauses (D)
and (E); and
(ii) The newly renamed subclause (D) be deleted in its entirety and
replaced with the following: "(D) the invoices issued or
accepted by the Vendor pursuant to the Supply Agreement to be
paid with the proceeds of such Borrowing, the respective amounts
of such invoices to be paid and the aggregate amount of such
invoices to be paid, and".
(i) Section 2.03(b) be amended as follows:
The word "1.10%" contained in the third to last line of Section
2.03(b) be deleted and replaced with the word "1.45%".
(j) Section 2.05(b) be amended as follows:
The first sentence be deleted and replaced with the following:
"The Borrower shall repay to the Administrative Agent for the ratable
account of the Lenders that have made Tranche B Advances the aggregate
outstanding principal amount of the Tranche B Advances in nine
installments (i) the first of which shall be payable on January 1,
2003 and (ii) otherwise payable on the last day of every sixth
calendar month after the twenty-four month anniversary of the Tranche
B Effective Date, each in an amount equal to the product obtained by
multiplying (a) the unpaid principal amount of such Tranche B Advances
outstanding on the Tranche B Termination Date by (b) 11.111%; provided
--------
that the last such installment shall be in an amount necessary to
repay in full the unpaid principal amount of the Tranche B Advances."
(k) Section 2.13 be amended as follows:
(i) deleting the last sentence in its entirety and replacing it with
the following:
"The proceeds of the Advances available to make Back-to-Back
Loans described in clause (a) of the preceding sentence shall be
paid directly to the financial institution providing Back-to-Back
Loans and the proceeds of such Back-to-Back Loans made to
Operating Subsidiaries in Argentina, Brazil, Peru and Uruguay (in
the case of Uruguay, subject to applicable law) to be used to pay
invoices issued by the Vendor under the Supply Agreement shall at
all times be held in Blocked Accounts until disbursed to pay
invoices owing to the Vendor under the Supply Agreement."; and
(ii) adding after the first paragraph a second paragraph to read as
follows:
"Notwithstanding anything in the Supply Agreement to the
contrary, the
Operating Subsidiaries shall use commercially reasonable efforts
to use the proceeds of the Back-to-Back Loans to pay amounts
owing under invoices issued or accepted by the Vendor pursuant
to the Supply Agreement, and as specified in the related Notice
of Borrowing, no later than the last day of the month in which
such proceeds were received."
(l) Section 5.02(a) be amended as follows:
(i) insertion of a new clause (xii) containing the following:
"Debt in the form of promissory notes issued to the selling
stockholders in connection with the acquisition of INEA, S.A.,
in a principal amount not to exceed $2,800,000, and";
(ii) the existing clause (xii) of Section 5.02(a) be renamed clause
(xiii), and the word "(xi)" in the second line of the renamed
clause (xiii) be deleted and replaced with the word "(xii)"; and
(iii) clause (vi) be deleted in its entirety and replaced with the
following:
"(vi) Debt incurred in connection with the entering into by the
Borrower or a Subsidiary thereof of Capitalized Leases in
aggregate principal amount (including any such Debt incurred to
refinance such Debt, as permitted by clause (xii) below) at any
one time outstanding not exceeding (A) $100,000,000, with
respect to any indefeasible rights of use of fiber and (B)
$10,000,000, with respect to Capitalized Leases other than
indefeasible rights of use of fiber,"
(m) Section 5.02(o) be deleted in its entirety and replaced with the
following:
"(o) Gross PP&E. Make or permit its Subsidiaries to make any
----------
Capital Expenditures that would cause the Gross PP&E of the
Borrower and its Subsidiaries in any period set forth below to
exceed the amount set forth below for such period.
Year Ending In Amount
-------------- ------
12/31/99 $ 115,000,000
12/31/00 $ 325,564,000
12/31/01 $ 466,052,000
12/31/02 $ 587,322,000
12/31/03 $ 716,357,000
12/31/04 $ 867,065,000
12/31/05 $1,028,336,000
12/31/06 $1,204,626,000
(n) Section 5.02(p) be deleted in its entirety and replaced with the
following:
"(p) Lease Obligations. Create, incur, assume or suffer to exist,
-----------------
or permit any of its Subsidiaries to create, incur, assume
or suffer to exist:
(i) any obligations as lessee for the rental or hire of
real or personal property of any kind under leases or
agreements to lease having a term of one year or more from
the date of execution thereof (other than Capitalized
Leases) that would cause the direct and contingent
liabilities of it and its Subsidiaries, on a Consolidated
basis, in respect of all such obligations in any period set
forth below to exceed the amount set forth below for such
period;
Year Ending In Amount
-------------- ------
12/31/99 $ 7,500,000
12/31/00 $12,723,000
12/31/01 $18,283,000
12/31/02 $31,472,000
12/31/03 $42,835,000
12/31/04 $55,702,000
12/31/05 $69,685,000
12/31/06 $86,153,000
or
(ii) any obligations under Capitalized Leases that would
cause the direct and contingent liabilities of it and its
Subsidiaries, on a Consolidated basis, in respect of all
such obligations to exceed at any time (A) $100,000,000,
with respect to indefeasible rights of use of fiber and (B)
$10,000,000, with respect to Capitalized Leases other than
indefeasible rights of use of fiber."
(o) Section 5.04(a) be deleted in its entirety and replaced with the
following:
"(a) Revenue. Shall not permit its Revenue for the period
-------
beginning on the first day of the Borrower's fiscal year in which
a date set forth below
occurs and ending on such date to be less than the amount
corresponding to such date under the heading "Revenue" set forth
below:
Date Revenue
-------
-----------------------------------------------
12/31/1999 $ 650,000
-----------------------------------------------
03/31/2000 $ 519,000
----------------------------------------------
06/30/2000 $ 1,530,000
----------------------------------------------
09/30/2000 $ 3,165,000
----------------------------------------------
12/31/2000 $ 6,501,000
----------------------------------------------
03/31/2001 $ 4,739,000
----------------------------------------------
06/30/2001 $ 11,659,000
----------------------------------------------
09/30/2001 $ 21,275,000
----------------------------------------------
12/31/2001 $ 34,331,000
----------------------------------------------
03/31/2002 $ 21,066,000
----------------------------------------------
06/30/2002 $ 52,052,000
----------------------------------------------
09/30/2002 $ 96,045,000
----------------------------------------------
12/31/2002 $ 157,550,000
----------------------------------------------
03/31/2003 $ 69,264,000
----------------------------------------------
06/30/2003 $ 155,844,000
----------------------------------------------
09/30/2003 $ 249,350,000
----------------------------------------------
12/31/2003 $ 346,319,000
----------------------------------------------
03/31/2004 $ 117,257,000
----------------------------------------------
06/30/2004 $ 263,828,000
----------------------------------------------
09/30/2004 $ 422,124,000
----------------------------------------------
12/31/2004 $ 586,283,000
----------------------------------------------
03/31/2005 $ 177,795,000
----------------------------------------------
06/30/2005 $ 389,456,000
----------------------------------------------
09/30/2005 $ 618,049,000
----------------------------------------------
12/31/2005 $ 846,643,000
----------------------------------------------
03/31/2006 $ 239,958,000
----------------------------------------------
06/30/2006 $ 512,637,000
----------------------------------------------
09/30/2006 $ 796,223,000
----------------------------------------------
12/31/2006 $1,090,717,000
----------------------------------------------
(p) Section 5.04(b) be deleted in its entirety and replaced with the
following:
"(b) Total Voice Grade Equivalents. Shall not permit the total
number of Voice Grade Equivalents of the Borrower and its
Subsidiaries as of any date set forth below to be less than the
number corresponding to such date under the heading "Number" set
forth below:
Date Number
---- ------
12/31/1999 736
Date Number
---- ------
06/30/2000 3,071
12/31/2000 9,040
06/30/2001 22,999
12/31/2001 50,859
06/30/2002 154,612
12/31/2002 251,548
06/30/2003 398,177
12/31/2003 544,806
06/30/2004 723,723
12/31/2004 902,639
06/30/2005 1,074,614
12/31/2005 1,246,590
06/30/2006 1,428,556
12/31/2006 1,610,522
(q) Section 5.04(c) be deleted in its entirety and replaced with the
following:
"(c) EBITDA. Shall not permit EBITDA for the four fiscal
quarters of the Borrower immediately preceding any date set forth
below to be less than the amount set forth under the heading
"Amount" corresponding to such date:
Date Amount
----- ------
12/31/1999 $ (33,400,000)
06/30/2000 $ (65,781,000)
12/31/2000 $ (99,000,000)
06/30/2001 $(104,973,000)
12/31/2001 $ (94,147,000)
06/30/2002 $ (70,976,000)
12/31/2002 $ (18,000,000)
06/30/2003 $ 63,982,000
12/31/2003 $ 106,506,000
06/30/2004 $ 174,099,000
12/31/2004 $ 254,406,000
06/30/2005 $ 332,296,000
12/31/2005 $ 404,196,000
06/30/2006 $ 482,098,000
12/31/2006 $ 543,904,000
(r) Section 5.04(d) be deleted in its entirety and replaced with the
following:
"(d) Total Debt to Contributed Capital. Shall not permit the
---------------------------------
ratio of (i) Total Debt outstanding as of any date of
determination to (ii) Contributed Capital as of such date of
determination to be greater than the ratio corresponding to the
date set forth below on or at any time during the 12 months
immediately preceding such date:
Date Ratio
---- -----
12/31/1999 4.50x
12/31/2000 2.50x
12/31/2001 2.50x
12/31/2002 2.50x
12/31/2003 2.50x
12/31/2004 2.50x
12/31/2005 2.50x
12/31/2006 2.50x
(s) Section 5.04(e) be deleted in its entirety and replaced with the
following:
"(e) Total Secured Debt to Contributed Capital. Shall not permit
-----------------------------------------
the ratio of (i) Total Debt owed by the Borrower secured by
Shared Liens outstanding as of any date of determination to (ii)
Contributed Capital as of such date of determination to be
greater than the ratio corresponding to the date set forth below
on or immediately preceding such date:
Date Ratio
---- -----
12/31/1999 2.00x
06/30/2000 1.75x
12/31/2000 1.75x
06/30/2001 1.75x
12/31/2001 1.75x
06/30/2002 1.75x
12/31/2002 1.75x
06/30/2003 1.75x
12/31/2003 1.75x
06/30/2004 1.75x
12/31/2004 1.75x
06/30/2005 1.75x
12/31/2005 1.75x
06/30/2006 1.75x
12/31/2006 1.75x
(t) Section 5.04(f) be deleted in its entirety and replaced with the
following:
"(f) Total Secured Debt to EBITDA (Cash Flow multiple). Shall not
------------------------------------------------
permit the ratio of (i) Total Debt owed by the Borrower secured
by Shared Liens outstanding at of any date of determination to
(ii) EBITDA for the four consecutive fiscal quarters of the
Borrower most recently ended on or prior to such date of
determination to exceed the ratio corresponding to the date set
forth below on or immediately proceeding such date of
determination:
Date Ratio
---- -----
12/31/2002 N/A
06/30/2003 6.06x
12/31/2003 3.90x
06/30/2004 2.30x
12/31/2004 1.30x
06/30/2005 0.80x
12/31/2005 0.40x
06/30/2006 0.30x
12/31/2006 0.20x
(u) Section 5.04(g) be deleted in its entirety and replaced with the
following:
"(g) EBITDA to Total Cash Debt Service (Debt service coverage
--------------------------------------------------------
ratio). Permit the ratio of (i) EBITDA for the four consecutive
-----
fiscal quarters ending on any of the dates set forth below to
(ii) Total Cash Debt Service for the same period to be less than
the ratio set forth below opposite such date:
Date Ratio
---- -----
12/31/2002 N/A
06/30/2003 0.58x
12/31/2003 0.62x
06/30/2004 1.05x
12/31/2004 1.40x
06/30/2005 1.50x
12/31/2005 2.00x
06/30/2006 3.00x
12/31/2006 3.65x
(v) Section 5.02(f) be deleted in its entirety and replaced with the
following:
"(f) Other Business. Engage or permit any Subsidiary to engage,
directly or indirectly, in any business other than the offering of
data, voice or video services in the Territory, whether as a
competitive access provider, a competitive local exchange carrier,
Internet access provider or provider of enhanced Internet services."
(w) The signature page be amended by deleting the words "(plus undrawn
Tranche A Commitments at the Tranche A Termination Date)" from the
Tranche B Commitment language set forth opposite Lucent's name
thereon.
3. We hereby request that the Administrative Agent under each Credit Agreement
waive:
(a) until April 30, 2000 the requirements of Sections 5.01(k) and
5.02(k)(viii)(B) of such Credit Agreement (and any Default pursuant to
Section 6.01(c) caused by the failure to fulfill such requirements)
with respect to Investments made by the Borrower and its Subsidiaries
pursuant to Section 5.02(k)(viii)(B) in Tellink S.A. and Eritown,
S.A.;
(b) with respect to any Borrowing under such Credit Agreement occurring
prior to April 30, 2000, the requirements of the last sentence of
Section 2.13;
(c) until April 30, 2000 any misrepresentation under Section 4.01(bb) of
such Credit Agreement (and any Default pursuant to Section 6.01(b)
caused by such misrepresentation) due to the existence of undisclosed
taxes, levies, imposts, deductions, charges or withholdings imposed,
levied or made by or in Uruguay or any political subdivision or taxing
authority thereof or therein.
4. We hereby request that Ericsson acknowledge that the requirements of
Section 3.03(h) and 3.03(i)(viii) (with respect to the Ericsson Credit
Agreement) and Lucent acknowledge that the requirements of Section 3.01(h) and
3.01(i)(viii) (with respect to the Lucent Credit Agreement) do not include the
execution and delivery of (i) a pledge of accounts receivable by Diveo do Brasil
Telecomunicacoes Ltda. (or the creation and perfection of any Liens contemplated
thereunder) or (ii) an agreement executed by Diginet Peru Sociedad Comercial de
Responsabilidad Limitada pledging, conveying or otherwise granting Liens upon
substantially all of its assets (or the creation and perfection of any Liens
contemplated thereunder). We hereby further request that each Administrative
Agent waive our obligation set forth in paragraph 4 of Waiver and Amendment No.
1 to the Credit Agreements dated as of January 14, 2000 with respect to the
documents described in clauses (i) and (ii) of the immediately preceding
sentence; we agree to execute and deliver such documents described prior to
April 30, 2000 or the obligation of the Lenders to make Advances under each
Credit Agreement shall terminate. We hereby further request that Lucent waive
our noncompliance with the requirement of Section 2.03(d) under the Lucent
Credit Agreement to pay the Tranche A Facility Fee on the Tranche A
Effective Date, provided that we shall have made payment of the Tranche A
Facility Fee to Lucent on or before the date hereof.
5. We hereby acknowledge and consent that ▇▇▇▇▇▇ Corporation and its
Affiliates shall be considered an "Eligible Assignee" for purposes of each
Credit Agreement and Ericsson or Lucent, as the case may be, may assign to said
party a portion of its rights and obligations under such Credit Agreement in
accordance with Section 8.07 thereof.
6. We hereby agree with Ericsson and Lucent that the amendments set forth in
items 1(m) through (u) (inclusive) and in items 2(m) through (u) (inclusive),
respectively, shall cease to be effective if, within 15 days after the date
hereof, the Parent fails to raise at least $125,000,000 of cash equity capital
in excess of the cash equity capital raised by it prior to the date hereof.
7. This Waiver and Amendment No. 2 shall become effective as of the date first
above written when, and only when, on or before March 29, 2000, the
Administrative Agent under each Credit Agreement shall have received
counterparts of this Waiver and Amendment No. 2 executed by the Required Lenders
or, as to any of the Lenders, advice satisfactory to such Administrative Agent
that such Lender has executed this Waiver and Amendment No. 2. With respect to
each Credit Agreement, this Waiver and Amendment No. 2 is subject to the
provisions of Section 8.01 of such Credit Agreement.
8. Each Credit Agreement, except to the extent of the waivers and amendments
specifically provided above, is and shall continue to be in full force and
effect and is hereby in all respects ratified and confirmed. The execution,
delivery and effectiveness of this Waiver and Amendment No. 2 shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of any Party under any Credit Agreement, nor constitute a waiver of any
provision of any Credit Agreement.
9. On and after the effectiveness of this Waiver and Amendment No. 2, each
reference in each Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to such Credit Agreement, and each reference in
each of the other Loan Documents relating to such Credit Agreement to "the
Credit Agreement", "thereunder", "thereof" or words of like import referring to
such Credit Agreement, shall mean and be a reference to such Credit Agreement,
as amended by this Waiver and Amendment No. 2.
10. If you agree to the terms and provisions of this Waiver and Amendment No.
2, please evidence such agreement by executing and returning at least two
counterparts of this Waiver and Amendment No. 2 to each of (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ at
Shearman & Sterling, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (Telecopier: (212)
▇▇▇-▇▇▇▇; Telephone: (▇▇▇) ▇▇▇-▇▇▇▇) and (ii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ at Cravath, Swaine &
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇;
Telephone (▇▇▇) ▇▇▇-▇▇▇▇).
11. This Waiver and Amendment No. 2 may be executed in any number of
counterparts and by different parties hereto 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. Delivery of an executed
counterpart of a signature page to this Waiver and
Amendment No. 2 by telecopier shall be effective as delivery of a manually
executed counterpart of this Waiver and Amendment No. 2.
12. This Waiver and Amendment No. 2 shall be governed by, and construed in
accordance with, the laws of the State of New York.
DIVEO, INC.
By ______________________________________
Name:
Title:
Agreed as of the date first above written:
ERICSSON CREDIT AB
By________________________
Name:
Title:
LUCENT TECHNOLOGIES INC.
By________________________
Name:
Title:
CONSENT
EACH OF THE UNDERSIGNED, as of the date of the foregoing Amendment,
consents to such Amendment and confirms and agrees that notwithstanding the
effectiveness of such Amendment and any prior amendments to the Credit
Agreement, the Guaranties and each other Loan Document to which it is a party
are, and shall continue to be, in full force and effect and are hereby ratified
and confirmed in all respects, except that, on and after the effectiveness of
such Amendment, each reference in each such Loan Document to the "Credit
Agreement", "thereunder", "thereof" or words of like import shall mean and be a
reference to the Credit Agreement, as amended by such Amendment and all prior
amendments thereto.
DIGINET ARGENTINA, INC. DIGINET BRAZIL, INC.
By_________________________ By_________________________
Title: Title:
DIGINET COLOMBIA, INC. DIGINET PANAMA INC.
By_________________________ By_________________________
Title: Title:
DIGINET VENTURES/MEGALINK, INC. DIGINET PERU INC.
By_________________________ By_________________________
Title: Title:
DIGINET ARGENTINA S.A. DIGINET COMUTACAO DIGITAL LTDA.
By_________________________ By_________________________
Title: Title:
DIVEO DO BRASIL DIGINET TELECOMUNICACIONES DE
TELECOMUNICACOES LTDA. PANAMA S.A.
By_________________________ By_________________________
Title: Title:
DIGINET PERU SOCIEDAD COMERCIAL DE
RESPONSIBILIDA LIMITADA
By_________________________
Title: