1
EXHIBIT 10.20
================================================================================
$100,000,000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF DECEMBER 7, 1999
BETWEEN
TELCO SYSTEMS, INC.
WORLD ACCESS HOLDINGS, INC.
AND
BANK OF AMERICA, N.A.
AS ADMINISTRATIVE AGENT
AND
FLEET NATIONAL BANK
AS SYNDICATION AGENT
AND
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
AS DOCUMENTATION AGENT
AND
BANC OF AMERICA SECURITIES LLC
AS LEAD ARRANGER AND BOOK RUNNING MANAGER
================================================================================
2
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
1.01. Definitions.....................................................................................1
1.02. Accounting and Other Terms.....................................................................25
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.01. The Facility...................................................................................25
2.02. Making Advances................................................................................25
2.03. Evidence of Indebtedness.......................................................................27
2.04. Reduction of Available Commitments.............................................................27
2.05. Prepayments....................................................................................29
2.06. Mandatory Repayment............................................................................30
2.07. Interest.......................................................................................30
2.08. Default Interest...............................................................................31
2.09. Continuation and Conversion Elections..........................................................31
2.10. Fees...........................................................................................32
2.11. Funding Losses.................................................................................32
2.12. Computations and Manner of Payments............................................................33
2.13. Yield Protection...............................................................................34
2.14. Use of Proceeds................................................................................36
2.15. Collateral and Collateral Call.................................................................36
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit..................................................................37
3.02. Letters of Credit Fee..........................................................................37
3.03. Reimbursement Obligations......................................................................38
3.04. Lenders' Obligations...........................................................................39
3.05. Administrative Agent's Obligations.............................................................40
3.06 Reinstatement..................................................................................40
3.07 Survivability of Provisions....................................................................40
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to the Initial Advance....................................................41
4.02. Conditions Precedent to All Advances...........................................................42
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.01. Organization and Qualification.................................................................43
i
3
5.02. Due Authorization; Validity....................................................................44
5.03. Conflicting Agreements and Other Matters.......................................................44
5.04. Financial Statements...........................................................................44
5.05. Litigation.....................................................................................44
5.06. Compliance With Laws Regulating the Incurrence of Debt.........................................45
5.07. Licenses, Title to Properties, and Related Matters.............................................45
5.08. Outstanding Debt and Liens.....................................................................46
5.09. ERISA..........................................................................................46
5.10. Environmental Laws.............................................................................46
5.11. Disclosure.....................................................................................47
5.12. Investments; Restricted Subsidiaries...........................................................47
5.13. Certain Fees...................................................................................47
5.14. Intellectual Property..........................................................................48
5.16. Survival of Representations and Warranties, etc................................................48
5.17. World Access Charitable Trust Transaction......................................................49
ARTICLE VI. AFFIRMATIVE COVENANTS
6.01. Compliance with Laws and Payment of Debt.......................................................49
6.02. Insurance......................................................................................49
6.03. Inspection Rights..............................................................................50
6.04. Records and Books of Account; Changes in GAAP..................................................50
6.05. Reporting Requirements.........................................................................50
6.06. Use of Proceeds................................................................................52
6.07. Maintenance of Existence and Assets............................................................52
6.08. Payment of Taxes...............................................................................53
6.09. Indemnity......................................................................................53
6.10. Management Fees Paid and Earned................................................................54
6.11. Authorizations and Material Agreements.........................................................54
6.12. Further Assurances.............................................................................54
6.13. Year 2000 Compliance...........................................................................54
6.14. Subsidiaries and Other Obligors................................................................55
ARTICLE VII. NEGATIVE COVENANTS
7.01. Financial Covenants............................................................................55
7.02. Debt...........................................................................................55
7.03. Contingent Liabilities.........................................................................56
7.04. Liens..........................................................................................56
7.05. Dispositions of Assets.........................................................................56
7.06. Distributions and Restricted Payments..........................................................56
7.07. Merger; Consolidation..........................................................................57
7.08. Business.......................................................................................57
ii
4
7.09. Transactions with Affiliates...................................................................57
7.10. Loans and Investments..........................................................................57
7.11. Fiscal Year and Accounting Method..............................................................58
7.12. Issuance of Partnership Interest and Capital Stock; Amendment of Articles and By-
Laws...........................................................................................58
7.13. Change of Ownership............................................................................58
7.14. Sale and Leaseback.............................................................................58
7.15. Compliance with ERISA..........................................................................59
7.16. Rate Swap Exposure.............................................................................59
7.17. Restricted Subsidiaries and Other Obligors.....................................................59
7.18. Limitation on Restrictive Agreements...........................................................59
7.19. Amendment of Material Agreements. ............................................................59
ARTICLE VIII. EVENTS OF DEFAULT
8.01. Events of Default..............................................................................60
8.02. Remedies Upon Default..........................................................................63
8.03. Cumulative Rights..............................................................................64
8.04. Waivers........................................................................................64
8.05. Performance by Administrative Agent or any Lender..............................................64
8.06. Expenditures...................................................................................65
8.07. Control........................................................................................65
ARTICLE IX. THE ADMINISTRATIVE AGENT
9.01. Authorization and Action.......................................................................65
9.02. Administrative Agent's Reliance, Etc...........................................................65
9.03. Bank of America, N. A. and Affiliates..........................................................66
9.04. Lender Credit Decision.........................................................................66
9.05. Indemnification by Lenders.....................................................................66
9.06. Successor Administrative Agent.................................................................67
ARTICLE X. MISCELLANEOUS
10.01. Amendments and Waivers.........................................................................67
10.02. Notices........................................................................................68
10.03. Parties in Interest............................................................................70
10.04. Assignments and Participations.................................................................70
10.05. Sharing of Payments............................................................................71
10.06. Right of Set-off...............................................................................71
10.07. Costs, Expenses, and Taxes.....................................................................71
10.08. Indemnification by the Borrower................................................................72
10.09. Rate Provision.................................................................................72
iii
5
10.10. Severability...................................................................................73
10.11. Exceptions to Covenants........................................................................73
10.12. Counterparts...................................................................................73
10.13. GOVERNING LAW; WAIVER OF JURY TRIAL............................................................73
10.14. ENTIRE AGREEMENT...............................................................................74
10.15. Joint and Several Obligations..................................................................74
10.16. No Novation....................................................................................74
iv
6
TABLE OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 1.00 Permitted Dispositions
Schedule 1.01 Restricted Subsidiaries
Schedule 5.01 Organization and Qualification
Schedule 5.01(d) Stock Options & Warrants Outstanding
Schedule 5.03 Consents under Material Agreements
Schedule 5.05 Litigation
Schedule 5.07 Authorizations
Schedule 5.08 Debt, Contingent Liabilities and Liens on the Closing Date
Schedule 5.11 Environmental Liabilities on the Closing Date
Schedule 5.12 Investments
Schedule 7.01(d) Pro Forma Operating Cash Flow
Schedule 7.03 Subordination Terms
Schedule 7.10 Other Acquisitions
EXHIBITS
Exhibit A - Form of Note
Exhibit B - Assignment and Acceptance
Exhibit C - Form of Pledge and Security Agreement
Exhibit D - Form of Compliance Certificate
Exhibit E - Form of Conversion/Continuation Notice
Exhibit F - Form of Borrowing Notice
v
7
TELCO SYSTEMS, INC.
WORLD ACCESS HOLDINGS, INC.
$100,000,000
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
.
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
December 7, 1999 and is between TELCO SYSTEMS, INC. and WORLD ACCESS HOLDINGS,
INC. (collectively, the "Borrower"), the Lenders from time to time party hereto
(the "Lenders") or to an Assignment and Acceptance, and BANK OF AMERICA, N.A.,
successor by merger to NationsBank, N.A., a national banking association ("Bank
of America"), as a Lender and Administrative Agent (the "Administrative Agent"),
FLEET NATIONAL BANK, as Syndication Agent, BANK AUSTRIA CREDITANSTALT CORPORATE
FINANCE, INC., as Documentation Agent and BANC OF AMERICA SECURITIES LLC as Lead
Arranger and Book Running Manager.
BACKGROUND
WHEREAS, on December 30, 1998, the Borrower, the Administrative Agent
and the Lenders entered into that certain credit facility in the original
principal amount of $75,000,000, as amended from time to time (the "Original
Credit Agreement").
WHEREAS, the Borrower, the Administrative Agent and the Lenders desire
to amend and restate the Original Credit Agreement to, among other things,
increase the facility amount to up to $100,000,000.
AGREEMENT
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.01. Definitions. As used in this Agreement, the following terms have
the respective meanings indicated below (such meanings to be applicable equally
to both the singular and plural forms of such terms):
"Administrative Agent" means Bank of America, N. A., successor by
merger to NationsBank, N.A., in its capacity as Administrative Agent hereunder,
or any successor Administrative Agent appointed pursuant to Section 9.06 hereof.
8
"Advance" means an advance made by a Lender to the Borrower pursuant to
Section 2.01 hereof.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled By or is Under Common Control
with another Person, and with respect to the Borrower, "Affiliate" means a
Person that directly or indirectly through one or more intermediaries, Controls
or is Controlled By or is Under Common Control with the Borrower or any
Subsidiary of the Borrower.
"Agreement" means this Credit Agreement, as hereafter amended,
modified, or supplemented in accordance with its terms.
"Annualized Operating Cash Flow" means, as of any date of
determination, (i) for the Borrower and each of its Restricted Subsidiaries
other than World Access Telecommunications Group, Inc. the product of two times
Operating Cash Flow for the two most recently ended fiscal quarters and (ii) for
World Access Telecommunications Group, Inc., the product of four times the
Operating Cash Flow for the most recently ended fiscal quarter
"Applicable Law" means (a) in respect of any Person, all provisions of
Laws of Tribunals applicable to such Person, and all orders and decrees of all
courts and arbitrators in proceedings or actions to which the Person in question
is a party and (b) in respect of contracts made or performed in the State of
Texas, "Applicable Law" also means the laws of the United States of America,
including, without limiting the foregoing, 12 U.S.C. Sections 85 and 86, as
amended to the date hereof and as the same may be amended at any time and from
time to time hereafter, and any other statute of the United States of America
now or at any time hereafter prescribing the maximum rates of interest on loans
and extensions of credit, and the laws of the State of Texas, including, without
limitation, Article 5069-1H, Title 79, Revised Civil Statutes of Texas, 1925,
("Art. 1H"), as amended, if applicable, and if Art. 1H is not applicable,
Article 5069-1D, Title 79, Revised Civil Statutes of Texas, 1925, ("Art. 1D"),
as amended, and any other statute of the State of Texas now or at any time
hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided however, that the Borrower agrees that the provisions of
Chapter 346 of the Texas Finance Code, as amended, shall not apply to Advances
hereunder.
"Applicable Margin" means (i) with respect to the Base Rate Advances
under the Facility, 1.250% per annum and (ii) with respect to LIBOR Advances
under the Facility, 2.250% per annum. Notwithstanding the foregoing, effective
three Business Days after receipt by the Administrative Agent from the Borrower
of a Compliance Certificate delivered to the Lenders for any reason and
demonstrating a change in the Total Leverage Ratio to an amount so that another
Applicable Margin should be applied pursuant to the table set forth below, the
Applicable Margin for each type of Advance shall mean the respective amount set
forth below opposite such relevant Total Leverage Ratio in Columns A and B
below, in each case until the first succeeding Quarterly Date which is at least
three Business Days after receipt by the Administrative Agent from the Borrower
of a Compliance Certificate, demonstrating a change in the Total Leverage Ratio
to an amount so that
2
9
another Applicable Margin shall be applied; provided that, if there exists a
Default or if the Total Leverage Ratio shall at any time be greater than or
equal to 2.50 to 1.00, the Applicable Margin shall again be the respective
amounts first set forth in this definition; provided further, that the
Applicable Margin in effect on the Closing Date shall be determined pursuant to
a Compliance Certificate delivered on the Closing Date, provided, further, that
if the Borrower fails to deliver any financial statements to the Administrative
Agent within the required time periods set forth in Sections 6.05(a) and Section
6.05(b) hereof, the Applicable Margin shall again be the respective amounts
first set forth in this definition until the date which is three Business Days
after the Administrative Agent receives financial statements from the Borrower
which demonstrate that another Applicable Margin should be applied pursuant to
the table set forth below; and provided further, that the Applicable Margin
shall never be a negative number.
COLUMN A COLUMN B
-------- --------
Total Leverage Ratio Base Rate LIBOR
-------------------- --------- -----
Greater than or equal to
2.50 to 1.00 1.250% 2.250%
Greater than or equal to
2.00 to 1.00 but less than
2.50 to 1.00 1.000% 2.000%
Greater than or equal to
1.50 to 1.00 but less than
2.00 to 1.00 0.750% 1.750%
Greater than or equal to
1.00 to 1.00 but less than
1.50 to 1.00 0.500% 1.500%
Less than 0.250% 1.250%
1.00 to 1.00
"Art. 1H" has the meaning specified in the definition herein of
"Applicable Law".
"Art. 1D" has the meaning specified in the definition herein of
"Applicable Law".
"Asset Sale" means any sale, disposition, liquidation, conveyance or
transfer by the Parent, the Borrower, any Restricted Subsidiary or any
Unrestricted Subsidiary of any Property (or portion thereof) or an interest
other than Permitted Dispositions.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by Administrative Agent,
in the form of Exhibit B hereto,
3
10
as each such agreement may be amended, modified, extended, restated, renewed,
substituted or replaced from time to time.
"Assignor" has the meaning ascribed thereto in Section 10.04(a) hereof.
"Auditor" means Ernst & Young LLP, or other independent certified
public accountants selected by the Borrower and acceptable to Administrative
Agent.
"Authorizations" means all filings, recordings and registrations with,
and all validations or exemptions, approvals, orders, authorizations, consents,
Licenses, certificates and permits from, the FCC, applicable public utilities
and other federal, state and local regulatory or governmental bodies and
authorities or any subdivision thereof, including, without limitation, FCC
Licenses.
"Authorized Officer" means any of the President, Executive Vice
President-Chief Financial Officer, Vice President-Chief Accounting Officer, Vice
President-Finance, Secretary, Treasurer, or any other officer authorized by the
Borrower from time to time of which the Administrative Agent has been notified
in writing.
"Available Commitment" means $100,000,000, as such amount may be
reduced from time to time or terminated pursuant to Sections 2.04, 2.06 or 8.02
hereof.
"Bank Affiliate" means the holding company of any Lender, or any wholly
owned direct or indirect subsidiary of such holding company or of such Lender.
"Base Rate Advance" means an Advance bearing interest at the Base Rate.
"Base Rate" means a fluctuating rate per annum as shall be in effect
from time to time equal to the lesser of (a) the Highest Lawful Rate and (b) the
sum of the Applicable Margin plus the greater of (i) the sum of Federal Funds
Rate in effect from time to time plus .50% and (ii) the rate of interest as then
in effect announced publicly by Bank of America, N.A. in Dallas, Texas from time
to time as its U.S. dollar prime commercial lending rate (such rate may or may
not be the lowest rate of interest charged by Bank of America from time to
time). The Base Rate shall be adjusted automatically as of the opening of
business on the effective date of each change in the prime rate to account for
such change.
"Bond Letter of Credit" means the $7,470,934.90 Irrevocable Letter of
Credit issued by Bank Austria AG backing payment of the $7,365,000 Forsyth
County Development Authority Industrial Development Revenue Bonds (World Access,
Inc. Project), Series 1998.
"Borrower" means, collectively, Telco Systems, Inc. and World Access
Holdings, Inc.
"Borrowing" means a borrowing under the Facility of the same Type made
on the same day.
4
11
"Borrowing Notice" has the meaning set forth in Section 2.02(a) hereof.
"Business Day" means a day of the year on which banks are not required
or authorized to close in Dallas, Texas and, if the applicable day relates to
any notice, payment or calculation related to a LIBOR Advance, in London,
England.
"Capital Expenditures" means the aggregate amount of all purchases or
acquisitions of items considered to be capital items under GAAP, and in any
event shall include the aggregate amount of items leased or acquired under
Capital Leases at the cost of the item, and the acquisition of realty, tools,
equipment and fixed assets, and any deferred costs associated with any of the
foregoing.
"Capital Leases" means capital leases and subleases, as defined in
accordance with GAAP, all existing Debt owed to Alcatel USA, as well as an
increase of up to $15,000,000 in switches and transmission equipment acquired by
the Borrower in a one time transaction from Alcatel USA (regardless of how such
switches and transmission equipment are treated under GAAP).
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation and each class of partnership interests
(including, without limitation, general, limited and preference units) in any
Person that is a partnership and membership interests in limited liability
companies.
"Cash Equivalents" means investments (directly or through a money
market fund) in (a) certificates of deposit and other interest bearing deposits
or accounts with United States commercial banks having a combined capital and
surplus of at least $250,000,000, which certificates, deposits and accounts
mature within one year from the date of investment, (b) obligations issued or
unconditionally guaranteed by the United States government, or issued by an
agency thereof and backed by the full faith and credit of the United States
government, which obligations mature within one year from the date of
investment, (c) direct obligations issued by any state or political subdivision
of the United States, which mature within one year from the date of investment
and have the highest rating obtainable from Standard & Poor's Ratings Group or
▇▇▇▇▇'▇ Investors Services, Inc. on the date of investment, and (d) commercial
paper which has one of the three highest ratings obtainable from Standard &
Poor's Ratings Group or ▇▇▇▇▇'▇ Investors Services, Inc.
"Change of Control" means the occurrence of any one or more of the
following events: (i) any "person" or "group" (as such terms are used in Section
13(d) and 14(d) of the Exchange Act) shall become, or obtain rights (whether by
of means or warrants, options or otherwise) to become, the "beneficial owner"
(as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 25% of the outstanding common stock of World Access,
Inc., (ii) the board of directors of the Parent shall cease to consist of a
majority of Continuing Directors, (iii) any event which results in World Access,
Inc.'s failure to own and control 100% of the Capital Stock of WA Telcom
Products Co., Inc. or Telco Systems, Inc., or WA Telcom Products Co., Inc.'s
failure to own or control, 100% of the Capital Stock of World Access Holdings,
Inc., or Telco Systems,
5
12
Inc.'s or World Access Holdings, Inc.'s failure to own and control, directly or
indirectly, 100% of the Capital Stock of the Restricted Subsidiaries, (iv) as
that term is defined in the World Access Indenture, or (v) as that term is
defined in the Series A Certificate of Designation or (vi) as that term is
defined in the FaciliCom Indenture; provided, that a "Change of Control" shall
not be deemed to have occurred as a result of the issuance of the Series C
Preferred or up to 30% of World Access, Inc. Capital Stock as a result of the
conversion of the Series C Preferred in accordance with the Series C Certificate
of Designation or the appointment of up to 4 directors to the board of directors
of World Access, Inc. in connection with the FaciliCom Acquisition.
"Closing Date" means December 7, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations issued thereunder, as from time to time in effect.
"Collateral" means all "collateral" referred to in any Loan Paper and
all other property which is or may be subject to a Lien in favor or for the
benefit of Administrative Agent on behalf of Lenders or any Lender to secure the
Obligations, including, without limitation, "Collateral" as defined in Section
2.15(a) hereof.
"Commitment Fees" means each of the fees described in Sections 2.10(a)
and 2.10(b) hereof.
"Compliance Certificate" means a certificate of an Authorized Officer
of the Borrower acceptable to Administrative Agent, in the form of Exhibit D
hereto, (a) certifying that such individual has no knowledge that a Default or
Event of Default has occurred and is continuing, or if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action being taken or proposed to be taken with respect thereto, and (b)
setting forth detailed calculations with respect to each of the covenants
described in Section 7.01 hereof.
"Consequential Loss," with respect to (a) the Borrower's payment of all
or any portion of the then-outstanding principal amount of a LIBOR Advance on a
day other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) (subject to Administrative Agents' prior consent), a LIBOR Advance
made on a date other than the date on which the Advance is to be made according
to Section 2.02(a) or Section 2.09 hereof, or (c) any of the circumstances
specified in Section 2.04, Section 2.05 and Section 2.06 hereof on which a
Consequential Loss may be incurred, means any loss, cost or expense incurred by
any Lender as a result of the timing of the payment or Advance or in
liquidating, redepositing, redeploying or reinvesting the principal amount so
paid or affected by the timing of the Advance or the circumstances described in
Section 2.04, Section 2.05, and Section 2.06 hereof, which amount shall be the
sum of (i) the interest that, but for the payment or timing of Advance, such
Lender would have earned in respect of that principal amount, reduced, if such
Lender is able to redeposit, redeploy, or reinvest the principal amount, by the
interest earned by such Lender as a result of redepositing, redeploying or
reinvesting the principal amount plus (ii) any expense or penalty incurred by
such Lender by reason of liquidating, redepositing, redeploying or reinvesting
6
13
the principal amount. Each determination by each Lender of any Consequential
Loss is, in the absence of manifest error, conclusive and binding.
"Contingent Liability" means, as to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Debt or obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, any obligation of
such Person, direct or indirect, (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt, (b)
to purchase Property or services for the purpose of assuring the owner of such
Debt of its payment, or (c) to maintain the solvency, working capital, equity,
cash flow, fixed charge or other coverage ratio, or any other financial
condition of the primary obligor so as to enable the primary obligor to pay any
Debt or to comply with any agreement relating to any Debt or obligation, and
shall, in any event, include any contingent obligation under any letter of
credit, application for any letter of credit or other related documentation.
"Continue," "Continuation" and "Continued" each refer to the
continuation pursuant to Section 2.09 hereof of a LIBOR Advance from one
Interest Period to the next Interest Period.
"Continuing Directors" means the directors of World Access, Inc. on the
Closing Date, and each other director, if, in each case, such other director's
nomination for election to the board of directors of World Access, Inc. is
recommended by at least 66 2/3% of the then Continuing Directors.
"Control" or "Controlled By" or "Under Common Control" mean possession,
direct or indirect, of power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise); provided that, in any event (a) it shall include any director (or
Person holding the equivalent position) or executive officer (or Person holding
the equivalent position) of such Person or of any Affiliate of such Person, (b)
any Person which beneficially owns 5% or more (in number of votes) of the
securities having ordinary voting power for the election of directors of a
corporation shall be conclusively presumed to control such corporation, (c) any
general partner of any partnership shall be conclusively presumed to control
such partnership, (d) any other Person who is a member of the immediate family
(including parents, spouse, siblings and children) of any general partner of a
partnership, and any trust whose principal beneficiary is such individual or one
or more members of such immediate family and any Person who is controlled by any
such member or trust, or is the executor, administrator or other personal
representative of such Person, shall be conclusively presumed to control such
Person, and (e) no Person shall be deemed to be an Affiliate of a corporation
solely by reason of his being an officer or director of such corporation.
"Controlled Group" means, as to any Person, all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common control with such Person and which, together with such
Person, are treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
7
14
"Conversion or Continuance Notice" has the meaning set forth in Section
2.09(b) hereof.
"Debt" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified on the balance sheet as
liabilities, and, in any event, includes accrued Earn-Out Liabilities(in
accordance with GAAP), Capital Leases, Contingent Liabilities that are required
to be disclosed and quantified in notes to consolidated financial statements in
accordance with GAAP, and liabilities secured by any Lien on any Property,
regardless of whether such secured liability is with or without recourse.
"Debt for Borrowed Money" means, as to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes, letters of
credit (or applications for letters of credit) or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business and (d) all obligations of such Person secured by a Lien on any assets
or property of any Person.
"Debtor Relief Laws" means applicable bankruptcy, reorganization,
moratorium or similar Laws, or principles of equity, affecting the enforcement
of creditors' rights generally.
"Default" means any event specified in Section 8.01 hereof, whether or
not any requirement in connection with such event for the giving of notice,
lapse of time or happening of any further condition has been satisfied.
"Distribution" means, as to any Person, (a) any declaration or payment
of any distribution or dividend (other than a stock dividend) on, or the making
of any pro rata distribution, loan, advance or investment to or in any holder
(in its capacity as a partner, shareholder or other equity holder) of, any
partnership interest or shares of capital stock or other equity interest of such
Person, or (b) any purchase, redemption or other acquisition or retirement for
value of any shares of partnership interest or capital stock or other equity
interest of such Person.
"Earn-Out Liability" means, with respect to the Borrower and its
Restricted Subsidiaries, any unsecured contingent liability of the Borrower or
any Restricted Subsidiary of the Borrower incurred in connection with any
Permitted Acquisition, which such contingent liability (a) constitutes a portion
of the purchase price for the property acquired but is not an amount certain,
(b) is only payable based on the performance of the acquired property and in an
amount based only on the performance of the acquired property or (c) is not
subject to any acceleration right (other than those rights in existence as of
the date hereof). "Earn-Out Liability" does not include shares of the common
stock of the Parent already issued and paid into escrow in connection with any
Permitted Acquisition.
"Eligible Assignee" means (a) any Bank Affiliate, (b) a commercial bank
organized under the laws of the United States or any state thereof, having total
assets in excess of $500,000,000; (c) a commercial bank organized under the laws
of any other country which is a member of the
8
15
Organization for Economic Cooperation and Development, or a political
subdivision of any such country, and having total assets in excess of
$500,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is
described in this clause; and (d) the central bank of any country which is a
member of the Organization for Economic Cooperation and Development.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss.9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C ss.6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss.1251 et seq.), the Clean Air Act (42 U.S.C.
ss.7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.),
and the Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.) ("OSHA"),
as such laws have been or hereafter may be amended or supplemented, and any and
all analogous future federal, or present or future state or local, Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of the Borrower or any Subsidiary of
the Borrower, or is under common control with the Borrower or any Subsidiary of
the Borrower, within the meaning of Section 414(c) of the Code.
"ERISA Event" means (a) a reportable event, within the meaning of
Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto
has been waived by the PBGC, (b) the issuance by the administrator of any Plan
of a notice of intent to terminate such Plan in a distress situation, pursuant
to Section 4041(a)(2) and 4041(c) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA), (c) the
cessation of operations at a facility in the circumstances described in Section
4062(e) of ERISA, (d) the withdrawal by the Borrower, any Subsidiary of the
Borrower, or an 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, (e) the failure by the Borrower, any Subsidiary of the Borrower or either
Parent, or any ERISA Affiliate to make a payment to a Plan required under
Section 302 of ERISA, (f) the adoption of an amendment to a Plan requiring the
provision of security to such Plan, pursuant to Section 307 of ERISA, or (g) 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 that constitutes
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, a Plan.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
9
16
"Exchange Indenture" means the indenture dated as of December 7, 1999
between World Access, Inc. and First Union National Bank, as trustee, providing
for 13 1/4% senior notes due 2008, as modified from time to time.
"Exchange Notes" means those certain $300,000,000 aggregate principal
amount of 13 1/4% senior notes due 2008 issued by World Access, Inc.
"Event of Default" means any of the events specified in Section 8.01
hereof, provided there has been satisfied any requirement in connection
therewith for the giving of notice, lapse of time, or happening of any further
condition.
"FaciliCom Acquisition" means the acquisition of FaciliCom
International, Inc. and the related entities pursuant to that Agreement and Plan
of Merger dated as of August 17, 1999 among World Access, Inc., FaciliCom
International, Inc., ▇▇▇▇▇▇▇▇▇ International Telecommunications, Inc., Epic
Interests, Inc. and BFV Associates, Inc.
"FaciliCom Indenture" means the indenture dated as of January 28, 1998
between FaciliCom International, Inc. and State Street Bank and Trust Company,
as Trustee, providing for the 10 1/2% senior notes due 2008, as amended,
restated, supplemented or otherwise modified from time to time.
"FaciliCom Notes" means those certain $300,000,000 aggregate principal
amount of 10 1/2% senior notes due 2008 issued by FaciliCom International, Inc.
"FaciliCom Unrestricted Subsidiaries" means each of the non-United
States organized Subsidiaries acquired in the FaciliCom Acquisition.
"Facility" means the revolving credit facility made hereunder.
"FCC" means the Federal Communications Commission and any successor
thereto.
"FCC License" means any community antenna relay service, broadcast
auxiliary license, earth station registration, business radio, microwave or
special safety radio service license issued by the FCC pursuant to the
Communications Act of 1934, as amended, and any other FCC license from time to
time necessary or advisable for the operation of the Parent's, the Borrower's or
any of their Subsidiaries' business.
"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 Dallas, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such date on such
transactions received by Administrative Agent from three federal funds brokers
of recognized standing selected by it.
10
17
"Fee Letters" means that certain letter agreement addressed to the
Borrower and acknowledged by the Borrower, and describing certain fees payable
to the Administrative Agent in connection with this Agreement and the Facility,
and such other fee letter agreements as may be executed from time to time among
the parties hereto, as each may be amended, modified, substituted or replaced by
the parties thereto.
"Fixed Charges" means, for the Parent, the Borrower, and the Restricted
Subsidiaries, for the most recently completed four fiscal quarters, the sum of
(a) cash Total Interest Expense paid or accrued, plus (b) scheduled repayments
of principal of Total Debt (whether by installment or as a result of a scheduled
reduction in a revolving commitment, or otherwise), and accrued Earn-Out
Liabilities(in accordance with GAAP) plus (c) cash taxes paid or accrued, plus
(d) Distributions, plus (e) Capital Expenditures.
"Fixed Charges Coverage Ratio" means the ratio of Operating Cash Flow
for the most recently completed four fiscal quarters, to Fixed Charges.
"Funded Debt" means, without duplication, with respect to any Person,
all Debt of such Person, determined on a consolidated basis and measured in
accordance with GAAP that is either (a) Debt for Borrowed Money, (b) Debt having
a final maturity (or extendable at the option of the obligor for a period
ending) more than one year after the date of creation thereof, notwithstanding
the fact that payments are required to be made less than one year after such
date, (c) Capital Lease obligations (without duplication), (d) reimbursement
obligations relating to letters of credit, without duplication, (e) Contingent
Liabilities relating to any of the foregoing (without duplication), (f)
Withdrawal Liability, (g) Debt, if any, associated with Interest Hedge
Agreements, (h) payments due under Non-Compete Agreements, plus (i) payments due
for the deferred purchase price of property and services (but excluding trade
payables that are less than 90 days old or by that agreement among the parties
are under twelve months old and any thereof that are being contested in good
faith).
"GAAP" means generally accepted accounting principles applied on a
consistent basis. Application on a consistent basis shall mean that the
accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period, except for new
developments or statements promulgated by the Financial Accounting Standards
Board.
"Galaxy Disposition" means the sale by World Access, Inc. to certain
management employees of World Access, Inc. of all of the assets of Galaxy
Personal Communications, Inc., Galaxy Technical Resources, Inc. and Galaxy
Engineering Services, Inc.
"Guarantors" means the Parent, FaciliCom International, LLC and each of
its direct or indirect domestic Subsidiaries, FCI (GP), LLC and each of its
direct or indirect domestic Subsidiaries and each Restricted Subsidiary and each
other Person from time to time guaranteeing payment of the Obligations to the
Administrative Agent and Lenders.
11
18
"Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor or
such other Person against loss, including, without limitation, any agreement
which assures any creditor or such other Person payment or performance of any
obligation, or any take-or-pay contract and shall include, without limitation,
the contingent liability of such Person in connection with any application for a
letter of credit (without duplication of any amount already included in its
Debt).
"Hazardous Materials" means all materials subject to any Environmental
Law, including, without limitation materials, listed in 49 C.F.R. ss. 172.101,
Hazardous Substances, explosive or radioactive materials, hazardous or toxic
wastes or substances, petroleum or petroleum distillates, asbestos or material
containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean
Water Act, 33 U.S.C. ss. 1251 et seq., the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. ss. 9601 et seq., the Resource Conservation
Recovery Act, 42 U.S.C. ss. 6901 et seq., and the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq.
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, Administrative Agent is
then permitted to charge on the Obligations. If the maximum rate of interest
which, under Applicable Law, such Lender is permitted to charge on the
Obligations shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Borrower. For purposes of determining the Highest Lawful Rate under
Applicable Law, the applicable rate ceiling shall be (a) the indicated rate
ceiling described in and computed in accordance with the provisions of Art. lH;
or (b) either the annualized ceiling or quarterly ceiling computed pursuant to
.008 of Art. 1D; provided, however, that at any time the indicated rate ceiling,
the annualized ceiling or the quarterly ceiling, as applicable, shall be less
than 18% per annum or more than 24% per annum, the provisions of Sections
.009(a) and .009(b) of said Art. lD shall control for purposes of such
determination, as applicable.
"Indemnitees" has the meaning ascribed thereto in Section 6.09 hereof.
"Initial Advance" means the initial Advance made in accordance with the
terms hereof, which shall only be after the Borrower has satisfied each of the
conditions set forth in Section 4.01 and Section 4.02 hereof (or any such
condition shall have been waived by each Lender).
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities within the meaning of Section 4001(a)(18) of
ERISA.
12
19
"Interest Coverage Ratio" means as of any date of determination, the
ratio of (a) Operating Cash Flow for the most recently completed four fiscal
quarters, to (b) Total Interest Expense for the most recently completed four
fiscal quarters.
"Interest Hedge Agreements" means any interest rate swap agreements,
interest cap agreements, interest rate collar agreements, or any similar
agreements or arrangements designed to hedge the risk of variable interest rate
volatility, or foreign currency hedge, exchange or similar agreements, on terms
and conditions reasonably acceptable to Administrative Agent (evidenced by
Administrative Agent's consent in writing), as such agreements or arrangements
may be modified, supplemented and in effect from time to time, and
notwithstanding the above, fixed rate Debt for Borrowed Money shall be deemed an
Interest Hedge Agreement.
"Interest Period" means, with respect to any LIBOR Advance, the period
beginning on the date an Advance is made or continued as or converted into a
LIBOR Advance and ending one, two, three or six months thereafter (as the
Borrower shall select) provided, however, that:
(a) the Borrower may not select any Interest Period that
ends after any principal repayment date unless, after giving effect to
such selection, the aggregate principal amount of LIBOR Advances having
Interest Periods that end on or prior to such principal repayment date
shall be at least equal to the principal amount of Advances due and
payable on and prior to such 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, however, 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 first day of any Interest Period occurs
on a day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Interest Reserve Account" means that certain interest reserve account
established pursuant to the terms of the FaciliCom Indenture for the purpose of
the payment of interest on the FaciliCom Notes.
"Investment" means any acquisition of all or substantially all assets
of any Person, or any direct or indirect purchase or other acquisition of, or a
beneficial interest in, capital stock or other securities of any other Person,
or any direct or indirect loan, advance (other than advances to employees for
moving and travel expenses, entertainment expenses, drawing accounts and similar
expenditures in the ordinary course of business), or capital contribution to or
investment in any other
13
20
Person, including without limitation the incurrence or sufferance of Debt or
accounts receivable of any other Person that are not current assets or do not
arise from sales to that other Person in the ordinary course of business.
"Issuing Bank" means Bank Austria AG.
"Law" means any constitution, statute, law, ordinance, regulation,
rule, order, writ, injunction or decree of any Tribunal.
"Lenders" means the lenders listed on the signature pages of this
Agreement, and each Eligible Assignee which hereafter becomes a party to this
Agreement pursuant to Section 10.04 hereof, for so long as any such Person is
owed any portion of the Obligations or obligated to make any Advances.
"Lending Office" means, with respect to each Lender, its branch or
affiliate, (a) initially, the office of such Lender, branch or affiliate
identified as such on the signature pages hereof, and (b) subsequently, such
other office of such Lender, branch or affiliate as such Lender may designate to
the Borrower and Administrative Agent as the office from which the Advances of
such Lender will be made and maintained and for the account of which all
payments of principal and interest on the Advances and the Commitment Fees will
thereafter be made. Lenders may have more than one Lending Office for the
purpose of making Base Rate Advances and LIBOR Advances.
"Letter of Credit" means collectively those direct pay or standby
commercial letters of credit issued pursuant to Article III hereof , the Bond
Letter of Credit, and any other letters of credit issued by Bank Austria AG for
the account of the Parent, the Borrowers, or the Restricted Subsidiaries.
"Letter of Credit Commitment" means, on any date of determination, an
amount equal to the lesser of (a) $25,000,000 and (b) the Available Commitment
minus all outstanding Advances and Letters of Credit.
"LIBOR Advance" means an Advance bearing interest at the LIBOR Rate.
"LIBOR Rate" means a simple per annum interest rate equal to the lesser
of (a) the Highest Lawful Rate, and (b) the sum of the LIBOR Rate Basis plus the
Applicable Margin. The LIBOR Rate shall, with respect to LIBOR Advances subject
to reserve or deposit requirements, be subject to premiums assessed therefor by
each Lender, which are payable directly to each Lender. Once determined, the
LIBOR Rate shall remain unchanged during the applicable Interest Period.
"LIBOR Rate Basis" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the
14
21
term "LIBOR Rate Basis" shall mean, for any LIBOR Advance for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"License" means, as to any Person, any license, permit, certificate of
need, authorization, certification, accreditation, franchise, approval, or grant
of rights by any Tribunal or third person necessary or appropriate for such
Person to own, maintain, or operate its business or Property, including FCC
Licenses.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien, or charge of any kind, including without limitation any agreement to give
or not to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement or other similar form of public notice
under the Laws of any jurisdiction (except for the filing of a financing
statement or notice in connection with an operating lease).
"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation conducted or threatened by or before any Tribunal, including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.
"Loan Papers" means this Agreement; the Notes; Interest Hedge
Agreements executed among any Obligor and any Lender or Bank Affiliate; all
Pledge Agreements; all Letters of Credit; all Guaranties executed by any Person
guaranteeing payment of any portion of the Obligations; all Fee Letters; each
Assignment and Acceptance; all promissory notes evidencing any portion of the
Obligations; assignments, security agreements and pledge agreements granting any
interest in any of the Collateral; stock certificates and partnership agreements
constituting part of the Collateral; mortgages, deeds of trust, financing
statements, collateral assignments, and other documents and instruments granting
an interest in any portion of the Collateral, or related to the perfection
and/or the transfer thereof, all collateral assignments or other agreements
granting a Lien on any intercompany note, including without limitation, all
other documents, instruments, agreements or certificates executed or delivered
by the Borrower or any other Obligor, as security for the Borrower's obligations
hereunder, in connection with the loans to the Borrower or otherwise; as each
such document shall, with the consent of the Lenders pursuant to the terms
hereof, be amended, revised, renewed, extended, substituted or replaced from
time to time.
"Majority Lenders" means any combination of Lenders having at least
66.67% of the aggregate amount of Advances under the Facility; provided,
however, that if no Advances are
15
22
outstanding under this Agreement, such term means any combination of Lenders
having a Specified Percentage equal to at least 66.67% of the Facility.
"Management Fees" means all fees from time to time directly or
indirectly (including any payments made pursuant to guarantees of such fees)
paid or payable by the Borrower, the Parent, or any of the Restricted
Subsidiaries to any Person for management services for managing any portion of
the Borrower's, the Parent's or the Restricted Subsidiaries' business.
"Material Adverse Change" means any circumstance or event that (a) can
reasonably be expected to cause a Default or an Event of Default, (b) otherwise
can reasonably be expected to (i) be material and adverse to the continued
operation of the Parent, the Borrower and the Restricted Subsidiaries taken as a
whole, or (ii) be material and adverse to the financial condition, business
operations, prospects or Properties of the Parent, the Borrower and the
Restricted Subsidiaries taken as a whole, or (c) in any manner whatsoever does
or can reasonably be expected to materially and adversely affect the validity or
enforceability of any of the Loan Papers.
"Maturity Date" means December 4, 2000, or such earlier date all of the
Obligations become due and payable (whether by acceleration, prepayment in full,
scheduled reduction or otherwise).
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, Administrative Agent or any Lender is permitted to charge on the
Obligations.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any Subsidiary of the Borrower 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, such plan being maintained pursuant to one or more
collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the
Borrower, any Subsidiary of the Borrower, or any ERISA Affiliate and at least
one Person other than the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate, or (b) was so maintained and in respect of which the Borrower, any
Subsidiary of the Borrower 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 Proceeds" means the gross proceeds received by the Borrower, the
Parent, any Restricted Subsidiary or any FaciliCom Unrestricted Subsidiary in
connection with or as a result of any Asset Sale, minus (so long as each of the
following are estimated in good faith by the Vice President - Chief Financial
Officer of the Borrower, the Parent, such Restricted Subsidiary or the FaciliCom
Unrestricted Subsidiaries and certified to the Lenders in reasonable detail by
an Authorized Officer) (a) amounts paid or reserved in good faith, if any, for
taxes payable with respect to such Asset Sale in an amount equal to the tax
liability of the Borrower, the Parent, any Restricted Subsidiary or any
FaciliCom Unrestricted Subsidiaries in respect of such sale (taking into account
16
23
all other tax benefits of each of the parties) and (b) reasonable and customary
transaction costs payable by the Borrower, the Parent, any Restricted Subsidiary
or any FaciliCom Unrestricted Subsidiaries related to such sale.
"NewTel Acquisition" means that certain acquisition on terms
substantially similar to the draft LLC Unit Purchase Agreement dated November
24, 1999 among World Access, Inc., NewTel LLC and NewTel, Inc.
"Non-Compete Agreement" means any agreement or related set of
agreements under which the Borrower or any Restricted Subsidiary agrees to pay
money in one or more installments to one or more Persons in exchange for
agreements from such Persons to refrain from competing with the Borrower or such
Restricted Subsidiary in a certain line of business in a specific geographical
area for a certain time period, or pursuant to which any Person agrees to limit
or restrict its right to engage, directly or indirectly, in the same or similar
industry for any period of time for any geographic location.
"Notes" means the promissory notes of the Borrower evidencing the
Advances and obligations owing hereunder to each Lender, in substantially the
form of Exhibit A hereto, each payable to the order of each Lender, as each such
note may be amended, extended, restated, renewed, substituted or replaced from
time to time.
"Obligations" means all present and future obligations, indebtedness
and liabilities, and all renewals and extensions of all or any part thereof, of
the Borrower and each other Obligor to Lenders, the Issuing Bank, and
Administrative Agent arising from, by virtue of, or pursuant to this Agreement,
any of the other Loan Papers and any and all renewals and extensions thereof or
any part thereof, or future amendments thereto, all interest accruing on all or
any part thereof and reasonable attorneys' fees incurred by Lenders, the Issuing
Bank, and Administrative Agent for the administration, execution of waivers,
amendments and consents, and in connection with any restructuring, workouts or
in the enforcement or the collection of all or any part thereof, whether such
obligations, indebtedness and liabilities are direct, indirect, fixed,
contingent, joint, several or joint and several. Without limiting the generality
of the foregoing, "Obligations" includes all amounts which would be owed by the
Borrower, each other Obligor and any other Person (other than Administrative
Agent or Lenders) to Administrative Agent or Lenders under any Loan Paper, but
for the fact that they are unenforceable or not allowable due to the existence
of a bankruptcy, reorganization or similar proceeding involving the Borrower,
any other Obligor or any other Person (including all such amounts which would
become due or would be secured but for the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding of the
Borrower, any other Obligor or any other Person under any Debtor Relief Law).
"Obligor" means the Borrower, the Parent, the Restricted Subsidiaries
and any other Person liable to the Lenders under the Loan Papers.
17
24
"Operating Cash Flow" means, for the Parent, Borrower, the Restricted
Subsidiaries and the FaciliCom Unrestricted Subsidiaries, for any period,
determined in accordance with GAAP, the consolidated net income (loss)
(including, without limitation, 100% of the net income (loss) of NACT
Telecommunications, Inc.) for such period taken as a single accounting period,
excluding extraordinary gains and losses, plus the sum of the following amounts
for such period to the extent included in the determination of such consolidated
net income: (a) depreciation expense, (b) amortization expense and other
non-cash charges reducing income, (c) Total Interest Expense, (d) total cash
income tax expense plus (e) extraordinary losses minus (f) extraordinary gains
and (g) non cash income; provided, the calculation is made after giving effect
to acquisitions and dispositions of assets of the Borrower, any Restricted
Subsidiary or the FaciliCom Unrestricted Subsidiaries during such period as if
such transactions had occurred on the first day of such period, provided
further, that Operating Cash Flow generated from the FaciliCom Acquisition shall
be included in the definition of Operating Cash Flow commencing in the fiscal
quarter ending December 31, 1999.
"Operating Leases" means operating leases, as defined in accordance
with GAAP.
"Parent" means collectively, World Access, Inc. and WA Telecom Products
Co., Inc.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
"Permitted Acquisitions" means cash and/or Capital Stock acquisitions
made by the Borrower or any Restricted Subsidiary of Capital Stock or assets of
Persons engaged in telecommunications equipment manufacturing, long distance and
long-haul carrier and related businesses not in excess of $75,000,000 in the
aggregate (excluding the FaciliCom Acquisition and the NewTel Acquisition), so
long as in each case (a) there exists no Default or Event of Default both before
and after giving effect to any such acquisition, (b) such acquired entity
becomes a Restricted Subsidiary and executes a Guaranty of the Obligations, or
such acquired assets are acquired by a Restricted Subsidiary, (c)(i) in the case
of an acquisition of Capital Stock, 100% of the Capital Stock (or 65% of the
Capital Stock of any entity organized under the laws of a country other than the
United States), and (ii) in all cases, all of the assets of the Person being
acquired, are pledged to the Lenders on a first Lien basis, (d) no more than
$50,000,000 of the Unused Commitment is used to make such acquisition, and (e)
the Borrower provides the Administrative Agent and each Lender with information
demonstrating pro forma compliance with the terms of this Agreement through the
Maturity Date, after giving effect to such Permitted Acquisition, including,
without limitation, each provision of Section 7.01 hereof.
18
25
"Permitted Dispositions" means provided that no Default or Event of
Default exists or would result therefrom (i) the sales of receivables by the
Borrower for the purpose of factoring not to exceed at any one time $16,000,000,
(ii) the sale by the Borrower of certain real property located in Provo, Utah,
(iii) the sale by the Borrower of the RTP operations in Dallas, Texas, (iv) the
sale or issuance of the Capital Stock of any Subsidiary of the Borrower to the
Borrower or to any other Subsidiary of the Borrower, (v) sales in the ordinary
course of business, including, without limitation, dispositions of obsolete or
useless assets, (vi) sales of "discontinued operations" as defined under GAAP
(x) as described on Schedule 1 hereto ("Schedule 1 Sales") and (y) which are not
described on Schedule 1 by the Parent, the Borrower or their Subsidiaries, the
Net Proceeds of which are not in excess of $25,000,000 in the aggregate
throughout the term of this Agreement ("Other Sales"); provided that if the
aggregate amount of Net Proceeds of Schedule 1 Sales are greater than
$25,000,000, the amount of Net Proceeds from Other Sales characterized as
"Permitted Dispositions" hereunder shall be reduced by the amount by which Net
Proceeds of Schedule 1 Sales exceeds $25,000,000; (vii) the Galaxy Disposition,
(viii) the Restor Disposition and (ix) the sale or disposition of the capital
stock of Ciena Corporation pursuant to the World Access Charitable Trust
Transaction.; provided, that the aggregate principal amount of all Permitted
Dispositions pursuant to (vi) above shall not exceed $50,000,000 during the term
of this Agreement.
"Permitted Liens" means
(a) those imposed by the Loan Papers;
(b) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations (which phrase shall
not be construed to refer to ERISA);
(c) deposits, pledges or liens to secure the performance
of bids, tenders, contracts (other than contracts for the payment of borrowed
money), leases, statutory obligations, surety, customs, appeal, performance and
payment bonds and other obligations of like nature arising in the ordinary
course of business;
(d) mechanics', workers', carriers, warehousemen's,
materialmen's, landlords' or other like Liens arising in the ordinary course of
business with respect to obligations which are not due or which are being
contested in good faith and by appropriate proceedings diligently conducted;
(e) Liens for taxes, assessments, fees or governmental
charges or levies not delinquent or which are being contested in good faith and
by appropriate proceedings diligently conducted, and in respect of which
adequate reserves shall have been established in accordance with GAAP on the
books of the Borrower or any Restricted Subsidiary;
(f) Liens or attachments, judgments or awards against the
Borrower with respect to which an appeal or proceeding for review shall be
pending or a stay of execution shall have been obtained, and which are otherwise
being contested in good faith and by appropriate proceedings
19
26
diligently conducted, and in respect of which adequate reserves shall have been
established in accordance with GAAP on the books of the Borrower or any
Restricted Subsidiary; and
(g) Liens in existence on the Closing Date and described
on Schedule 5.08 hereto; and
(h) easements, rights of way, restrictions, leases of
Property to others, easements for installations of public utilities, title
imperfections and restrictions, zoning ordinances and other similar encumbrances
affecting Property which in the aggregate do not materially adversely affect the
value of such Property or materially impair its use for the operation of the
business of the Borrower; and
(i) Lien on Provo Utah property securing Debt For
Borrowed Money in an aggregate principal amount not exceeding $5,000,000.
"Person" means an individual, partnership, joint venture, corporation,
trust, Tribunal, unincorporated organization and government, or any department,
agency or political subdivision thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Pledge Agreement" means each Security Agreement and each Pledge and
Security Agreement, whereby the Pledged Interests are pledged to Administrative
Agent and a security interest is granted in the assets of the Borrower and
Restricted Subsidiaries to secure the Obligations, each substantially in the
form of Exhibit C hereto, as each such agreement may be amended, modified,
extended, renewed, restated, substituted or replaced from time to time.
"Pledged Interests" means (a) a first perfected security interest in
100% of the Capital Stock of the Borrower and WA Telecom Products Co., Inc.; (b)
a first perfected security interest in 100% of the Capital Stock of each
Restricted Subsidiary, if any, now existing or hereafter formed or acquired; and
(c) a first perfected security interest in 65% of the Capital Stock of each
Unrestricted Subsidiary, if any, now existing or hereafter formed or acquired.
"Prohibited Transaction" has the meaning specified therefor in Section
4975 of the Code or Section 406 of ERISA.
"Property" means all types of real, personal, tangible, intangible or
mixed property, whether owned in fee simple or leased.
"Quarterly Date" means the last Business Day of each March, June,
September and December during the term of this Agreement, commencing on December
31, 1998.
"Ratable" means, as to any Lender, in accordance with its Specified
Percentage.
20
27
"Refinancing Advance" means an Advance that is used to pay the
principal amount of an existing Advance (or any performance thereof) at the end
of its Interest Period and which, after giving effect to such application, does
not result in an increase in the aggregate amount of outstanding Advances.
"Regulatory Change" means any change after the date hereof in federal,
state or foreign Laws (including, the introduction of any new Law) or the
adoption or making after such date of any interpretations, directives or
requests of or under any federal, state or foreign Laws (whether or not having
the force of Law) by any Tribunal charged with the interpretation or
administration thereof, applying to a class of financial institutions that
includes any Lender, excluding, however, any such change which results in an
adjustment of the LIBOR Reserve Percentage and the effect of which is reflected
in a change in the LIBOR Rate as provided in the definition of such term.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement under Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard under Section 412 of the Code and under Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waivers in
accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
"Restor Disposition" means the disposition of Restor Telephone
Products, a division of WA Telcom Products Co., Inc. to GTE for aggregate cash
consideration not in excess of $2,375,000.
"Restricted Payments" means (a) any direct or indirect distribution,
Distribution or other payment on account of any general or limited partnership
interest in (or the setting aside of funds for, or the establishment of a
sinking fund or analogous fund with respect to), or shares of Capital Stock or
other securities of, the Borrower, the Parent or any Restricted Subsidiary; (b)
any payments of principal of, or interest on, or fees related to, or any other
payments and prepayments with respect to, or the establishment of, or any
payment to, any sinking fund or analogous fund for the purpose of making any
such payments on, Funded Debt of the Borrower, the Parent or any Restricted
Subsidiary (excluding the Obligations); (c) any Management Fee or any interest
thereon, payable by the Borrower, the Parent, or any Restricted Subsidiary to
any Affiliate of the Borrower or Parent or to any other Person; (d) any
administration fee or any administration, consulting or other similar fees, or
any interest thereon, payable by the Borrower, the Parent or any Restricted
Subsidiary to any Affiliate of Parent or the Borrower or to any other Person,
but not including fees for investment banking or accounting services or other
similar kinds of consulting fees in the ordinary course of business; (e) any
payments of any amounts owing under any Non-Compete Agreements; and (f) fees,
loans or other payments or advances by the Borrower, the Parent or any
Restricted Subsidiary to any Unrestricted Subsidiary or any other Affiliate of
the Parent or the Borrower.
"Restricted Subsidiaries" means all of the direct or indirect
Subsidiaries of the Parent and the Borrower and of their Restricted
Subsidiaries, including without limitation, those described on
21
28
Schedule 1.01 attached hereto as well as any Unrestricted Subsidiary designated
in writing as a Restricted Subsidiary by Borrower from time to time; and
"Restricted Subsidiary" means any one of them, as applicable in the context.
"Rights" means rights, remedies, powers, and privileges.
"Series A Certificate of Designation" means that certain Certificate of
Designation of 4.25% Cumulative Senior Perpetual Convertible Preferred Stock,
Series A, of World Access, Inc., executed by it and filed with Secretary of
State of the State of Delaware.
"Series A Preferred" means 70,000 shares of that 4.25% Cumulative
Senior Perpetual Convertible Preferred Stock, Series A, par value $.01 per
share, designated in the Series A Certificate of Designation and issued by World
Access, Inc. pursuant to the Stock Purchase Agreement (as that term is defined
in the Series A Certificate of Designation).
"Series B Certificate of Designation" means that certain Certificate of
Designation of 4.25% Cumulative Junior Convertible Preferred Stock, Series B, of
World Access, Inc., executed by it and filed with Secretary of State of the
State of Delaware.
"Series B Preferred" means 23,174 shares of that 4.25% Cumulative
Junior Convertible Preferred Stock, Series B, par value $.01 per share,
designated in the Series B Certificate of Designation and issued by World
Access, Inc. pursuant to the Purchase Agreement (as that term is defined in the
Series B Certificate of Designation).
"Series C Certificate of Designation" means that certain Certificate of
Designation of Convertible Preferred Stock, Series C, of World Access, Inc., to
be executed by it and filed with Secretary of State of the State of Delaware.
"Series C Preferred" means 380,000 shares of that Convertible Preferred
Stock, Series C, par value $.01 per share, designated in the Series C
Certificate of Designation and issued by World Access, Inc. pursuant to the
Merger Agreement (as that term is defined in the Series C Certificate of
Designation).
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, other than a Multiple Employer Plan, that is
maintained for employees of the Borrower or any ERISA Affiliate.
"Solvent" means, with respect to any Person, 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) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) 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
22
29
mature, and (d) 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.
"Special Counsel" means the law firm of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇,
P.C., Dallas, Texas, special counsel to Administrative Agent, or such other
counsel selected by Administrative Agent from time to time.
"Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof, or as adjusted or
specified in any Assignment and Acceptance, or amendment to this Agreement.
"Subordinated Debt" means subordinated indebtedness of the Borrower
incurred in accordance with the terms of Section 7.02(e)(ii) hereof.
"Subordinated Notes" means the $115,000,000 4.5% Convertible
Subordinated Notes due 2002.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, trust or estate of which (or in which) more
than 50% of:
(a) the outstanding Capital Stock having voting power to
elect a majority of the Board of Directors of such corporation (or
other Persons performing similar functions of such entity, and
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 or joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by (i) such Person, (ii)
such Person and one or more of its Subsidiaries or (iii) one or more of
such Person's Subsidiaries.
"Taxes" means all taxes, assessments, imposts, fees or other charges at
any time imposed by any Laws or Tribunal.
"Total Debt" means, without duplication, with respect to the Parent,
the Borrower, the Restricted Subsidiaries and the FaciliCom Unrestricted
Subsidiaries, Funded Debt (including, without limitation, recourse factoring and
third- party financing arrangements and any overdue interest on such
indebtedness, but excluding any accrued but not overdue interest on any
indebtedness), calculated on a consolidated basis in accordance with GAAP.
23
30
"Total Interest Expense" means as of any date of determination for any
period of calculation, the Parent's, Borrower's, the Restricted Subsidiaries'
and the FaciliCom Unrestricted Subsidiaries' consolidated interest expense
included in a consolidated income statement (after deduction of interest income)
on Total Debt for such period calculated on a consolidated basis in accordance
with GAAP, including, without limitation or duplication (or, to the extent not
so included, with the addition of), for the Parent, the Borrower, the Restricted
Subsidiaries and the FaciliCom Unrestricted Subsidiaries: (a) the amortization
of Debt discounts; (b) any commitment fees or agency fees related to any Funded
Debt, but specifically excluding any one-time facility and/or arrangement fees
associated with the Facility; (c) any fees or expenses with respect to letters
of credit, bankers' acceptances or similar facilities; (d) fees and expenses
with respect to interest rate swap or similar agreements or foreign currency
hedge, exchange or similar agreements, other than fees or charges related to the
acquisition or termination thereof which are not allocable to interest expense
in accordance with GAAP; (e) preferred stock Distributions for the Borrower, the
Restricted Subsidiaries and the FaciliCom Unrestricted Subsidiaries declared and
payable in cash; and (f) interest capitalized in accordance with GAAP minus
payments made from the Interest Reserve Account.
"Total Leverage Ratio" means as of any date of determination, the ratio
of (a) Total Debt of the Parent, the Borrower, the Restricted Subsidiaries and
the FaciliCom Unrestricted Subsidiaries on such date of determination to (b)
Annualized Operating Cash Flow, all calculated on a consolidated basis in
accordance with GAAP consistently applied.
"Total Senior Debt" means, at any date, the aggregate of all Debt for
Borrowed Money of the Parent, the Borrowers, their Restricted Subsidiaries and
the FaciliCom Unrestricted Subsidiaries (including any overdue interest on such
indebtedness, but excluding any accrued but not overdue interest on any
indebtedness) on a consolidated basis at such date minus the sum of all Debt
under (i) the World Access Indenture, (ii) the FaciliCom Indenture, (iii) the
Exchange Offer Indenture and (iv) any other Debt for Borrowed Money of World
Access, Inc. that is structurally or contractually subordinated to the
Obligations.
"Total Senior Leverage Ratio" means as of any date of determination,
the ratio of (a) Total Senior Debt for the Parent, the Borrower, the Restricted
Subsidiaries and the FaciliCom Unrestricted Subsidiaries on such date of
determination to (b) Annualized Operating Cash Flow, all calculated on a
consolidated basis in accordance with GAAP, consistently applied.
"Tribunal" means any state, commonwealth, federal, foreign, territorial
or other court or government body, subdivision, agency, department, commission,
board, bureau or instrumentality of a governmental body.
"Type" refers to the distinction between Advances bearing interest at
the Base Rate and LIBOR Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of
Texas.
24
31
"Unrestricted Subsidiary" means World Access, Ltd, World Access de
Mexico, S.A., WAXS Limitada, Telco Systems Asia/Pacific Ltd., Telco Indemnity
Corp., Telco Systems, Ltd., TSI Exports Ltd., World Access Telecommunications
Group Limited, and World Access U.K., Ltd., and, with the prior written consent
of the Majority Lenders, any other Subsidiary of the Parent designated as an
"Unrestricted Subsidiary" by the Borrower from time to time.
"Unused Commitment" means, on any date of determination, the Available
Commitment as in effect on such date, minus all outstanding Advances on such
date.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
"World Access Charitable Trust" means that certain trust formed under
Texas law by World Access Investment Corp. pursuant to which (i) World Access
Investment Corp. shall be the present income beneficiary of no less than 75% of
such trust and (ii) a non-profit entity formed under Section 501(c)(3) of the
Code shall be no more than a 25% remainder interest beneficiary.
"World Access Charitable Trust Transaction" means the transaction by
which World Access Investment Corp. will transfer its shares of the capital
stock of Ciena Corporation to a charitable remainder trust, with the World
Access Investment Corp. as the primary beneficiary of the trust, in exchange for
certain cash payments over time.
"World Access Indenture" means the indenture dated as of October 1,
1997 between World Access, Inc. and First Union National Bank, as Trustee,
providing for the Subordinated Notes, as amended, restated, supplemented or
otherwise modified from time to time.
"Year 2000 Compliant" means, with respect to a Person, that all
computer hardware and software that are material to the business and operations
of such Person will on a timely basis be able to perform properly date-sensitive
functions for all dates before and after January 1, 2000, including functions
with respect to any leap year.
1.02. Accounting and Other Terms. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP consistently applied on a consolidated basis for Borrower
and the Restricted Subsidiaries, unless otherwise expressly stated herein.
References herein to one gender shall be deemed to include all other genders.
Except where the context otherwise requires, all references to time are deemed
to be Central Standard time.
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.01. The Facility. Each Lender severally agrees, on the terms and
subject to the conditions hereinafter set forth, from the Closing Date until the
Maturity Date, to make Advances under the Available Commitment to the Borrower
on any Business Day during the period from the Closing Date of this Agreement
until the Maturity Date, in an aggregate principal amount not to exceed at
25
32
any time outstanding such Lender's Specified Percentage of the Available
Commitment. Subject to the terms and conditions of this Agreement, until the
Maturity Date, the Borrower may borrow, repay and reborrow the Advances under
the Available Commitment. The Borrower shall repay all outstanding Obligations
on the Maturity Date.
2.02. Making Advances.
(a) Each Borrowing of Advances shall be made upon the written
notice of the Borrower, received by Administrative Agent not later than (i)
12:00 noon three Business Days prior to the proposed date of the Borrowing, in
the case of LIBOR Advances, and (ii) not later than 10:00 a.m. on the date of
such Borrowing, in the case of Base Rate Advances. Each such notice of a
Borrowing (a "Borrowing Notice") shall be by telecopy, promptly confirmed by
letter, in substantially the form of Exhibit F hereto specifying therein:
(i) the date of such proposed Borrowing, which shall be a
Business Day;
(ii) the amount of such proposed Borrowing which, (A)
shall not when aggregated together with all other outstanding Advances
exceed the Available Commitment, and (B) shall, in the case of a
Borrowing of LIBOR Advances, be in an amount of not less than
$1,000,000 or an integral multiple of $500,000 in excess thereof and,
in the case of a Borrowing of Base Rate Advances, be in an amount of
not less than $500,000 or an integral multiple of $100,000 in excess
thereof;
(iii) the Type of Advances of which the Borrowing is to be
comprised; and
(iv) if the Borrowing is to be comprised of LIBOR
Advances, the duration of the initial Interest Period applicable to
such Advances.
If the Borrowing Notice fails to specify the duration of the initial
Interest Period for any Borrowing comprised of LIBOR Advances, such Interest
Period shall be one month. Each Lender shall, before 1:00 p.m. on the date of
each Advance (other than a Refinancing Advance), make available to
Administrative Agent
Bank of America Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
such Lender's Specified Percentage of the aggregate Advances, to be made on that
day in immediately available funds.
26
33
(b) Unless any applicable condition specified in Article IV hereof
has not been satisfied, Administrative Agent will make the funds on Advances
under the Facility promptly available to the Borrower (other than with respect
to a Refinancing Advance) at such account as shall have been specified by the
Borrower.
(c) After giving effect to any Borrowing, (i) there shall not be
more than ten different Interest Periods in the aggregate in effect under the
Facility and (ii) the aggregate principal of outstanding Advances plus the
undrawn portion of all Letters of Credit shall not exceed the Available
Commitment.
(d) No Interest Period for a Borrowing under the Facility shall
extend beyond the Maturity Date.
(e) Unless a Lender shall have notified Administrative Agent prior
to the date of any Advance that it will not make available its Specified
Percentage of any Advance, Administrative Agent may assume that such Lender has
made the appropriate amount available in accordance with Section 2.02(a), and
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If and to the extent any Lender shall not
have made such amount available to Administrative Agent, such Lender and the
Borrower severally agree to repay to Administrative Agent immediately on demand
such corresponding amount together with interest thereon, from the date such
amount is made available to the Borrower until the date such amount is repaid to
Administrative Agent, at (i) in the case of the Borrower, the Base Rate, and
(ii) in the case of such Lender, the Federal Funds Rate.
(f) The failure by any Lender to make available its Specified
Percentage of any Advance hereunder shall not relieve any other Lender of its
obligation, if any, to make available its Specified Percentage of any Advance.
In no event, however, shall any Lender be responsible for the failure of any
other Lender to make available any portion of any Advance.
(g) The Borrower shall indemnify each Lender against any
Consequential Loss incurred by each Lender as a result of (i) any failure by the
Borrower to fulfill, on or before the date specified for the Advance, the
conditions to the Advance set forth herein or (ii) the Borrower's requesting
that an Advance not be made on the date specified in the Borrowing Notice.
2.03. Evidence of Indebtedness.
(a) The obligations of the Borrower with respect to all Advances
made by each Lender shall be evidenced by a Note and in the amount of such
Lender's Specified Percentage of the Available Commitment (as the same may be
modified pursuant to Section 10.04 hereof).
(b) Absent manifest error, Administrative Agent's and each
Lender's records shall be conclusive as to amounts owed Administrative Agent and
such Lender under the Notes and this Agreement.
27
34
2.04. Reduction of Available Commitments.
(a) Voluntary Commitment Reduction. The Borrower shall have the
right from time to time upon notice by the Borrower to the Administrative Agent
not later than 1:00 p.m., three Business Days in advance, to reduce the
Available Commitment, in whole or in part; provided, however, that the Borrower
shall pay the accrued commitment fee on the amount of each such reduction, if
any, and any partial reduction shall be in an aggregate amount which is not less
than $1,000,000 and an integral multiple of $500,000. Such notice shall specify
the amount of reduction and the proposed date of such reduction.
(b) Mandatory Commitment Reductions.
(i) Scheduled Reductions in the Commitment. The Available
Commitment shall be reduced to zero on the Maturity Date.
(ii) Asset Sales. On the date of any Asset Sale by any of
the Borrowers (other than Asset Sales, the proceeds of which are
reinvested within 180 days after any such Asset Sale by the Borrower in
like or similar assets to those which were disposed of)(this provision
not permitting such Asset Sales), the Available Commitment shall be
automatically and permanently reduced by an amount equal to 100% of the
Net Proceeds from such Asset Sales. On such date, the Borrower shall
deliver to Administrative Agent a certificate of an Authorized Officer
certifying as to the amount of (including the calculation of) the
reduction of the Available Commitment, and, with respect to the Asset
Sale giving rise thereto, the gross proceeds thereof and the costs and
expenses payable as a result thereof which were deducted in determining
the amount of Net Proceeds.
(iii) Debt Issuance. On the date of any issuance of public
or private Funded Debt by the Borrower (this provision not permitting
such Debt issuance) other than Debt For Borrowed Money permitted by
Section 7.02 hereof, the Available Commitment shall be automatically
and permanently reduced by an amount equal to 100% of the net proceeds
from the issuance of such Debt. On such date, the Borrower shall
deliver to the Administrative Agent a certificate of an Authorized
Officer certifying as to the amount of (including the calculation of)
such reduction in the Available Commitment, and, with respect to the
Debt issuance giving rise thereto, the gross proceeds thereof and the
costs and expenses payable as a result thereof which were deducted in
determining the amount of net proceeds of such Debt issuance.
(iv) Change of Control. If a Change of Control occurs, the
Available Commitment shall be automatically and permanently reduced to
zero.
(v) Equity Issuances. On the date of any issuance of
equity by any of the Borrowers or the Parent (other than (i) the
issuance of common stock or options or rights to purchase common stock
of any of the Borrowers to employees and directors pursuant to
28
35
stock purchase plans or grant plans, or otherwise; and provided that no
Default or Event of Default exists or would result from the following
issuances of Capital Stock: (ii) issuances of Capital Stock pursuant to
Earn-Out Liabilities contained in agreements to which the Borrower, the
Parent or any Restricted Subsidiaries is currently a party; (iii)
issuances of common stock in the Parent; and (iv) issuances of
convertible preferred stock of the Parent on terms and provisions
acceptable to the Lenders), the Available Commitment shall be
automatically and permanently reduced by an amount equal to 100% of the
net proceeds from the issuance of such equity. On such date, the
Borrower shall deliver to Administrative Agent a certificate of an
Authorized Officer certifying as to the amount of (including the
calculation of) the reduction of the Available Commitment, and, with
respect to the equity issuance giving rise thereto, the gross proceeds
thereof and the costs and expenses payable as a result thereof which
were deducted in determining the amount of net proceeds of such equity
issuance.
(c) Commitment Reductions, Generally. To the extent the sum of the
aggregate outstanding Advances plus the undrawn portion of all issued and
outstanding Letters of Credit exceed the Available Commitment after any
reduction thereof, the Borrower shall immediately repay on the date of such
reduction, any such excess amount and all accrued interest thereon, together
with any amounts constituting any Consequential Loss. Once reduced or terminated
pursuant to this Section 2.04, the Available Commitment may not be increased or
reinstated.
2.05. Prepayments.
(a) Optional Prepayments. The Borrower may, upon at least three
Business Days prior written notice to Administrative Agent stating the proposed
date and aggregate principal amount of the prepayment, prepay the outstanding
principal amount of any Advances in whole or in part, together with accrued
interest to the date of such prepayment on the principal amount prepaid without
premium or penalty other than any Consequential Loss; provided, however, that in
the case of a prepayment of a Base Rate Advance, the notice of prepayment may be
given by telephone by 11:00 a.m. on the date of prepayment. Each partial
prepayment shall, in the case of Base Rate Advances, be in an aggregate
principal amount of not less than $500,000 or a larger integral multiple of
$100,000 in excess thereof and, in the case of LIBOR Advances, be in an
aggregate principal amount of not less than $1,000,000 or a larger integral
multiple of $500,000 in excess thereof. If any notice of prepayment is given,
the principal amount stated therein, together with accrued interest on the
amount prepaid and the amount, if any, due under Sections 2.11 and 2.13 hereof,
shall be due and payable on the date specified in such notice.
(b) Mandatory Prepayments.
(i) Asset Sales. (A) On the date of any Asset Sale (other
than Asset Sales, the proceeds of which are reinvested within 180 days
after the Asset Sale by the Borrower in like or similar assets to those
which were disposed of), the Borrower shall repay the Obligations by an
amount equal to 100% of the Net Proceeds applied to Advances. On such
date, the
29
36
Borrower shall deliver to Administrative Agent a certificate of an
Authorized Officer certifying as to the amount of (including the
calculation of) such repayment and, with respect to the Asset Sale
giving rise thereto, the gross proceeds thereof and the costs and
expenses payable as a result thereof which were deducted in determining
the amount of Net Proceeds.
(ii) Debt Issuances. On the date of any issuance of public
or private Funded Debt by the Borrower (this provision not permitting
such Debt issuance) other than Debt For Borrowed Money permitted by
Section 7.02 hereof, the Borrower shall repay the Obligations by an
amount equal to 100% of the net proceeds from such issuance, applied to
outstanding Advances. On such date, the Borrower shall deliver to
Administrative Agent a certificate of an Authorized Officer certifying
as to the amount of (including the calculation of) such repayment and,
with respect to the Debt issuance giving rise thereto, the gross
proceeds thereof and the costs and expenses payable as a result thereof
which were deducted in determining the amount of net proceeds of such
Debt issuance.
(iii) Equity Issuances. (A) On the date of any issuance of
equity by Parent or the Borrower (other than (i) the issuance of common
stock or options or rights to purchase common stock of the Parent to
employees and directors pursuant to stock purchase plans or grant
plans, or otherwise; and provided that no Default or Event of Default
exists or would result from the following issuances of Capital Stock:
(ii) issuances of Capital Stock pursuant to Earn-Out Liabilities
contained in agreements to which the Borrower, the Parent or any
Restricted Subsidiaries is currently a party; (iii) issuances of shares
of common stock of the Parent; and (iv) issuances of convertible
preferred stock of the Parent on terms and provisions acceptable to the
Lenders), the Borrower shall repay the Obligations applied to
outstanding Advances. On such date, the Borrower shall deliver to
Administrative Agent a certificate of an Authorized Officer certifying
as to the amount of (including the calculation of) such repayment and,
with respect to the equity issuance giving rise thereto, the gross
proceeds thereof and the costs and expenses payable a s a result
thereof which were deducted in determining the amount of net proceeds
of such equity issuance.
(v) Change of Control. If a Change of Control occurs, the
Borrower shall repay the Obligations in full.
(c) Prepayments, Generally. Any prepayment of Advances pursuant to
this Section 2.05 shall be applied first to Base Rate Advances, if any, then
outstanding under the Facility, second to LIBOR Advances for which the date of
prepayment is the last day of the applicable Interest Period, if any,
outstanding under the Facility and third to LIBOR Advances with the shortest
remaining Interest Periods outstanding under the Facility.
2.06. Mandatory Repayment. The Borrower agrees that all Obligations
are due and payable in full on the Maturity Date.
30
37
2.07. Interest. Subject to Section 2.08 below, the Borrower shall
pay interest on the unpaid principal amount of each Advance from the date of
such Advance until such principal shall be paid in full, at the following rates,
as selected by the Borrower in accordance with the provisions of Section 2.02
hereof:
(a) Base Rate Advances. Base Rate Advances shall bear
interest at a rate per annum equal to the lesser of (i) the Base Rate
as in effect from time to time and (ii) the Highest Lawful Rate. If the
amount of interest payable in respect of any interest computation
period is reduced to the Highest Lawful Rate pursuant to the
immediately preceding sentence and the amount of interest payable in
respect of any subsequent interest computation period would be less
than the Maximum Amount, then the amount of interest payable in respect
of such subsequent interest computation period shall be automatically
increased to the Maximum Amount; provided that at no time shall the
aggregate amount by which interest paid has been increased pursuant to
this sentence exceed the aggregate amount by which interest has been
reduced pursuant to the immediately preceding sentence.
(b) LIBOR Advances. LIBOR Advances shall bear interest at
the rate per annum equal to the LIBOR Rate applicable to such Advance,
which at no time shall exceed the Highest Lawful Rate.
(c) Payment Dates. Accrued and unpaid interest on Base
Rate Advances shall be paid quarterly in arrears on each Quarterly Date
and on the appropriate maturity, repayment or prepayment date. Accrued
and unpaid interest on LIBOR Advances shall be paid on the last day of
the appropriate Interest Period and on the date of any prepayment or
repayment of such Advance; provided, however, that if any Interest
Period for a LIBOR Advance exceeds three months, interest shall also be
paid on each date occurring during the Interest Period which is the
three month anniversary date of the first day of the Interest Period.
2.08. Default Interest. During the continuation of any Event of
Default, the Borrower shall pay, on demand, interest (after as well as before
judgment to the extent permitted by Law) on the principal amount of all Advances
outstanding and on all other Obligations due and unpaid hereunder equal to the
lesser of the (a) the Highest Lawful Rate and (b) the Base Rate (whether or not
in effect) plus 2.00% per annum.
2.09. Continuation and Conversion Elections.
(a) The Borrower may upon irrevocable written notice to
Administrative Agent and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any
portion of outstanding Base Rate Advances (in an aggregate amount not
less than $1,000,000 or a larger integral multiple of $500,000 in
excess thereof) into LIBOR Advances.
31
38
(ii) elect to convert at the end of any Interest Period
therefor, all or any portion of outstanding LIBOR Advances comprised in
the same Borrowing (in an aggregate amount not less than $500,000 or a
larger integral multiple of $100,000 in excess thereof) into Base Rate
Advances; or
(iii) elect to continue, at the end of any Interest Period
therefor, any LIBOR Advances;
provided, however, that if the aggregate amount of outstanding LIBOR Advances
comprised in the same Borrowing shall have been reduced as a result of any
payment, prepayment or conversion of part thereof to an amount less than
$1,000,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Rate Advances at the end of each respective Interest Period.
(b) The Borrower shall deliver a notice of conversion or
continuation (a "Notice of Conversion/Continuation"), in substantially the form
of Exhibit E hereto, to Administrative Agent not later than (i) 12:00 noon three
Business Days prior to the proposed date of conversion or continuation, if the
Advances or any portion thereof are to be converted into or continued as LIBOR
Advances; and (ii) not later than 10:00 a.m. on the proposed date of conversion
or continuation, if the Advances or any portion thereof are to be converted into
Base Rate Advances.
Each such Notice of Conversion/Continuation shall be by telecopy or
telephone, promptly confirmed in writing, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Advances to be converted or
continued;
(iii) the nature of the proposed conversion or
continuation; and
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to
LIBOR Advances, the Borrower shall have failed to select a new Interest Period
to be applicable to such LIBOR Advances or if an Event of Default shall then
have occurred and be continuing, the Borrower shall be deemed to have elected to
convert such LIBOR Advances into Base Rate Advances effective as of the
expiration date of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation,
Administrative Agent shall promptly notify each Lender thereof. All conversions
and continuations shall be made pro rata among Lenders based on their Specified
Percentage of the respective outstanding principal amounts of the Advances with
respect to which such notice was given held by each Lender.
32
39
(e) Notwithstanding any other provision contained in this
Agreement, after giving effect to any conversion or continuation of any
Advances, there shall not be outstanding Advances with more than ten different
Interest Periods in the aggregate under the Facility.
2.10. Fees.
(a) Subject to Section 10.09 hereof, the Borrower agrees to pay to
Administrative Agent, for the account of the Lenders in accordance with their
Specified Percentages, a commitment fee on the average daily amount of the
Unused Commitment, from the Closing Date through the Maturity Date, at the rate
of .75% per annum, payable quarterly in arrears on each Quarterly Date occurring
after the Closing Date, with the last such payment due and owing on the Maturity
Date.
(b) Subject to Section 10.09 hereof, the Borrower agrees to pay to
Administrative Agent for its own account as administrative lender and
underwriter, and to Banc of America Securities LLC, as arranger hereunder, such
fees as agreed to in writing among the Borrower and the Administrative Agent and
Banc of America Securities LLC, payable as set forth in that certain Fee Letter
executed among the Borrower, Administrative Agent and Banc of America Securities
LLC in accordance with the terms of the Fee Letter.
2.11. Funding Losses. If the Borrower makes any payment or
prepayment of principal with respect to any LIBOR Advance (including payments
made after any acceleration thereof) or converts any Advance from a LIBOR
Advance on any day other than the last day of an Interest Period applicable
thereto, or if the Borrower fails to prepay, borrow, convert or continue any
LIBOR Advance after a notice of prepayment, borrowing, conversion or
continuation has been given (or is deemed to have been given) to Administrative
Agent, the Borrower shall pay to each Lender on demand (subject to Section 10.09
hereof) any Consequential Loss. The Borrower agrees that each Lender is not
obligated to actually reinvest the amount prepaid in any specific obligation as
a condition to receiving any Consequential Loss, or otherwise.
2.12. Computations and Manner of Payments.
(a) The Borrower shall make each payment hereunder and under the
other Loan Papers not later than 1:00 p.m. on the day when due in same day funds
to Administrative Agent, for the Ratable account of Lenders unless otherwise
specifically provided herein, at
Administrative Agent
Bank of America Plaza
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
for further credit to the account of the Borrower. No later than the end of each
day when each payment hereunder is made, the Borrower shall notify
Administrative Agent, telephone (800) 880-
33
40
5537, facsimile (▇▇▇) ▇▇▇-▇▇▇▇, or such other Person as Administrative Agent may
from time to time specify.
(b) Unless Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due hereunder that the
Borrower will not make payment in full, Administrative Agent may assume that
such payment is so made on such date and may, in reliance upon such assumption,
make distributions to Lenders. If and to the extent the Borrower shall not have
made such payment in full, each Lender shall repay to Administrative Agent
forthwith on demand the applicable amount distributed, together with interest
thereon at the Federal Funds Rate, from the date of distribution until the date
of repayment. The Borrower hereby authorizes each Lender, if and to the extent
payment is not made when due hereunder, to charge the amount so due against any
account of the Borrower with such Lender.
(c) Subject to Section 10.09 hereof, interest on LIBOR Advances
shall be calculated on the basis of actual days elapsed but computed as if each
year consisted of 360 days. Subject to Section 10.09 hereof, interest on Base
Rate Advances, the Commitment Fees and other amounts due under the Loan Papers
shall be calculated on the basis of actual days elapsed but computed as if each
year consisted of 365 or 366 days, as the case may be. Such computations shall
be made including the first day but excluding the last day occurring in the
period for which such interest, payment or Commitment Fees is payable. Each
determination by Administrative Agent or a Lender of an interest rate, fee or
commission hereunder shall be conclusive and binding for all purposes, absent
manifest error. All payments under the Loan Papers shall be made in United
States dollars and without setoff, counterclaim or other defense.
(d) Notwithstanding anything herein or in any Loan Paper to the
contrary, any payment made by the Borrower in excess of the Available Commitment
or outstanding Advances, shall be applied to outstanding amounts (or to reduce
the commitment) of any other outstanding Obligations.
(e) Reference to any particular index or reference rate for
determining any applicable interest rate under this Agreement is for purposes of
calculating the interest due and is not intended as and shall not be construed
as requiring any Lender to actually fund any Advance at any particular index or
reference rate.
2.13. Yield Protection.
(a) If any Lender determines that either (i) the adoption, after
the date hereof, of any Applicable Law, rule, regulation or guideline regarding
capital adequacy applicable to commercial banks or financial institutions
generally or any change therein, or any change, after the date hereof, in the
interpretation or administration thereof by any Tribunal, central bank or
comparable agency charged with the interpretation or administration thereof, or
(ii) compliance by any Lender (or Lending Office of any Lender) with any request
or directive made after the date hereof applicable to commercial banks or
financial institutions generally regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency has the effect of
34
41
reducing the rate of return on such Lender's capital as a consequence of its
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy (but excluding
consequences of such Lender's negligence or intentional disregard of law or
regulation)) by an amount reasonably deemed by such Lender to be material, then
from time to time, within fifteen days after demand by such Lender, the Borrower
shall pay to such Lender such additional amount or amounts as will adequately
compensate such Lender for such reduction. Each Lender will notify the Borrower
of any event occurring after the date of this Agreement which will entitle such
Lender to compensation pursuant to this Section 2.13(a) as promptly as
practicable after such Lender obtains actual knowledge of such event; provided
that no Lender shall be liable for its failure or the failure of any other
Lender to provide such notification. A certificate of such Lender claiming
compensation under this Section 2.13(a), setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it hereunder and
certifying that such claim is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender shall be conclusive in the absence of manifest error. Each Lender shall
use reasonable efforts to mitigate the effect upon the Borrower of any such
increased costs payable to such Lender under this Section 2.13(a).
(b) If, after the date hereof, any Tribunal, central bank or other
comparable authority, at any time imposes, modifies or deems applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Lender, or imposes on any Lender any other condition affecting a LIBOR Advance,
the Notes or its obligation to make a LIBOR Advance; and the result of any of
the foregoing is to increase the cost to such Lender of making or maintaining
LIBOR Advances, or to reduce the amount of any sum received or receivable by
such Lender under this Agreement or under the Notes or reimbursement obligations
by an amount reasonably deemed by such Lender to be material, then, within five
days after demand by such Lender, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction. Each Lender will (i) notify the Borrower and Administrative
Agent of any event occurring after the date of this Agreement that entitles such
Lender to compensation pursuant to this Section 2.13(b), as promptly as
practicable after such Lender obtains actual knowledge of the event; provided
that no Lender shall be liable for its failure or the failure of any other
Lender to provide such notification and (ii) use good faith and reasonable
efforts to designate a different Lending Office for LIBOR Advances of such
Lender if the designation will avoid the need for, or reduce the amount of, the
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender. A certificate of such Lender claiming
compensation under this Section 2.13(b) setting forth in reasonable detail the
computation of the additional amount or amounts to be paid to it hereunder and
certifying that such claim is consistent with such Lender's treatment of similar
customers having similar provisions generally in their agreements with such
Lender shall be conclusive in the absence of manifest error. If such Lender
demands compensation under this Section 2.13(b), the Borrower may at any time,
on at least five Business Days' prior notice to such Lender, (i) repay in full
the then outstanding principal amount of LIBOR Advances of such Lender, together
with accrued interest thereon, or (ii)
35
42
convert the LIBOR Advances to Base Rate Advances in accordance with the
provisions of this Agreement; provided, however, that the Borrower shall be
liable for the Consequential Loss arising pursuant to those actions.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or administration of
any Law shall make it unlawful, or any central bank or other Tribunal shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
make LIBOR Advances or to continue to fund or maintain LIBOR Advances hereunder,
then, on notice thereof and demand therefor by such Lender to the Borrower, (i)
each LIBOR Advance will automatically, upon such demand, convert into a Base
Rate Advance, and (ii) the obligation of such Lender to make or to convert
Advances into LIBOR Advances shall be suspended until such Lender notifies
Administrative Agent and the Borrower that such Lender has determined that the
circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default
or Event of Default, (i) each LIBOR Advance will automatically, on the last day
of the then existing Interest Period therefor, convert into a Base Rate Advance
and (ii) the obligation of each Lender to make or to convert Advances into LIBOR
Advances shall be suspended.
(e) Failure on the part of any Lender to demand compensation for
any increased costs, increased capital or reduction in amounts received or
receivable or reduction in return on capital pursuant to this Section 2.13 with
respect to any period shall not constitute a waiver of any Lender's right to
demand compensation with respect to such period or any other period, subject,
however, to the limitations set forth in this Section 2.13.
(f) The term "Lender" for purposes of this Section shall include
the Administrative Agent and the Issuing Bank. The obligations of the Borrower
under this Section 2.13 shall survive any termination of this Agreement.
(g) Determinations by Lenders for purposes of this Section 2.13
shall be conclusive, absent manifest error. Any certificate delivered to the
Borrower by a Lender pursuant to this Section 2.13 shall include in reasonable
detail the basis for such Lender's demand for additional compensation and a
certification that the claim for compensation is consistent with such Lender's
treatment of similar customers having similar provisions generally in their
agreements with such Lender.
(h) If any Lender notifies Administrative Agent that the LIBOR
Rate for any Interest Period for any LIBOR Advances will not adequately reflect
the cost to such Lender of making, funding or maintaining LIBOR Advances for
such Interest Period, Administrative Agent shall promptly so notify the
Borrower, whereupon (i) each such LIBOR Advance will automatically, on the last
day of the then existing Interest Period therefor, convert into a Base Rate
Advance and (ii) the obligation of such Lender to make or to convert Advances
into LIBOR Advances shall be suspended until such Lender notifies Administrative
Agent that such Lender has determined that the
36
43
circumstances causing such suspension no longer exist and Administrative Agent
notifies the Borrower of such fact.
2.14. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower shall use such proceeds) to (a) refinance existing
Funded Debt of the Borrower and its Restricted Subsidiaries, (b) fund Capital
Expenditures of the Borrower and the Restricted Subsidiaries permitted by the
terms of this Agreement, and (c) fund certain acquisitions, and (d) use for
general working capital purposes.
2.15. Collateral and Collateral Call.
(a) Collateral. Payment of the Obligations is secured by (i) a
first perfected security interest in 100% of the Capital Stock of the Borrower
and the Restricted Subsidiaries, 100% of the Capital Stock of WA Telecom
Products, Inc., and 65% of the Capital Stock of Unrestricted Subsidiaries, (ii)
subject to Permitted Liens, a first perfected security interest in all of the
accounts, equipment, inventory, chattel paper, general intangibles, and other
assets of the Borrower, the Restricted Subsidiaries and the Guarantors (other
than real property located in Provo, Utah, the real and personal property used
in the operation of the RTP operations in Dallas, Texas, and the leasehold
interests described in Section 2.15(b) hereof), subject to no other Lien, and
(iii) a Guaranty of the Obligations executed by each Guarantor (collectively,
together with all other Properties or assets of the Borrower, the Restricted
Subsidiaries and other Persons securing the Obligations from time to time, the
"Collateral"). The Borrower agrees that it will, and will cause the Restricted
Subsidiaries, the Parent and Affiliates (except the Unrestricted Subsidiaries)
to, execute and deliver, or cause to be executed and delivered, such documents
as Administrative Agent may from time to time reasonably request to create and
perfect a first Lien, and subject to Permitted Liens, for the benefit of
Administrative Agent and the Lenders in the Collateral.
(b) Collateral Call. The Borrower agrees that it will, and will
cause any other Person owning any interest in the Borrower or any Restricted
Subsidiary or the Parent from time to time to immediately pledge such interest
to secure the Obligations, pursuant to a pledge agreement substantially in the
form of the Pledge Agreements. The Borrower agrees to, and agrees to cause the
Parent and Restricted Subsidiaries to, promptly grant Administrative Agent and
the Lenders from time to time at the request of the Lenders a Lien on any of the
Property of the Borrower, the Parent, and the Restricted Subsidiaries not
already constituting Collateral to the extent permitted by the World Access
Indenture, the FaciliCom Indenture and the Exchange Indenture, including,
without limitation (on a best efforts basis), Liens on leasehold estates by no
later than 120 days following the Closing Date. In that regard, the Borrower
shall use best efforts to assist Administrative Agent and the Lenders in
creating and perfecting a first Lien for the benefit of Administrative Agent and
the Lenders securing the Obligations in any such Property of the Borrower, the
Parent and the Restricted Subsidiaries, subject to Permitted Liens, including,
without limitation, providing Administrative Agent with title commitments,
appraisals, surveys (with flood plain certification), mortgagee title insurance,
evidence of insurance, including flood hazard insurance, environmental audits,
UCC-11 searches, Tax and Lien searches, recorded real estate documents,
intellectual
37
44
property documentation and registration and other similar types of documents,
consents, Authorizations, instruments and agreements relating to all Property of
the Borrower, the Parent and the Restricted Subsidiaries as reasonably requested
by Administrative Agent from time to time.
ARTICLE III. LETTERS OF CREDIT
3.01. Issuance of Letters of Credit. The Borrower shall give the
Administrative Agent not less than five Business Days prior written notice of a
request for the issuance of a Letter of Credit, and the Administrative Agent
shall promptly notify each Lender of such request. Upon receipt of the
Borrower's properly completed and duly executed Applications, and subject to the
terms of such Applications and to the terms of this Agreement, the
Administrative Agent agrees to issue Letters of Credit on behalf of the Borrower
in an aggregate face amount not in excess of the lesser of (a) Letter of Credit
Commitment and (b) the remainder of the Available Commitment minus the sum of
all outstanding Advances plus the aggregate face amount of all outstanding
Letters of Credit, including without limitation, the Bond Letter of Credit. No
Letter of Credit shall have a maturity extending beyond the earliest of (i) the
Maturity Date, or (ii) one year from the date of its issuance, or (iii) such
earlier date as may be required to enable the Borrower to satisfy its repayment
obligations under Section 2.06 hereof. Subject to such maturity limitations and
so long as no Default or Event of Default has occurred and is continuing or
would result from the renewal of a Letter of Credit, the Letters of Credit may
be renewed by the Administrative Agent in its discretion. The Lenders shall
participate ratably in any liability under the Letters of Credit and in any
unpaid reimbursement obligations of the Borrower with respect to any Letter of
Credit in their Specified Percentages. The amount of the Letters of Credit
(including, without limitation, the Bond Letter of Credit) issued and
outstanding and the unpaid reimbursement obligations of the Borrower for such
Letters of Credit shall reduce the amount of the Available Commitment available,
so that at no time shall the sum of (i) all outstanding Advances in the
aggregate, plus (ii) the aggregate face amount of all outstanding Letters of
Credit (including, without limitation, the Bond Letter of Credit), plus (iii)
(without duplication) all outstanding reimbursement obligations related to
Letters of Credit, exceed the Available Commitment, and at no time shall the sum
of all Advances by any Lender made plus its ratable share of amounts available
to be drawn under the Letters of Credit (including, without limitation, the Bond
Letter of Credit) and the unpaid reimbursement obligations of the Borrower in
respect of such Letters of Credit exceed its Specified Percentage of the
Available Commitment.
3.02. Letters of Credit Fee. In consideration for the issuance of
each Letter of Credit (including the Bond Letter of Credit), the Borrower shall
pay to (a) the Administrative Agent for its account and for the account of the
Issuing Bank, application and processing fees in the amount of the higher of (i)
$350.00 and (ii) the product of .125% multiplied by the face amount of such
Letter of Credit on each Letter of Credit, due and payable on the date of
issuance of each Letter of Credit (other than the issuance of the Bond Letter of
Credit by Bank Austria AG which has already been issued), and (b) the
Administrative Agent for the account of the Lenders in accordance with their
Specified Percentages or the Issuing Bank, as case may be, a per annum fee for
each Letter of Credit equal to the higher of (i) $350.00 and (ii) the product of
the Applicable Margin for a LIBOR
38
45
Advance in effect on the date of calculation multiplied by the face amount of
each such Letter of Credit. Each fee for each Letter of Credit under subsection
(b) above shall be due and payable to the Administrative Agent or the Issuing
Bank, as the case may be, quarterly as it accrues, on each Quarterly Date during
the term of the Letter of Credit and on the expiration or renewal of each such
Letter of Credit, beginning with the first such Quarterly Date after the
issuance of each Letter of Credit and ending on the expiration date of each such
Letter of Credit.
3.03. Reimbursement Obligations.
(a) The Borrower hereby agrees to reimburse Administrative Agent
and the Issuing Bank immediately upon demand by Administrative Agent, and in
immediately available funds, for any payment or disbursement made by
Administrative Agent or the Issuing Bank under any Letter of Credit. Payment
shall be made by the Borrower with interest on the amount so paid or disbursed
by Administrative Agent or the Issuing Bank from and including the date payment
is made under any Letter of Credit to and including the date of payment, at the
lesser of (i) the Highest Lawful Rate, and (ii) the sum of the Base Rate in
effect from time to time plus 2% per annum; provided, however, that if the
Borrower would be permitted under the terms of Section 2.01, Section 2.02 and
Section 4.02 to borrow Advances in amounts at least equal to their reimbursement
obligation for a drawing under any Letter of Credit, a Base Advance by each
Lender in an amount equal to such Lender's Specified Percentage shall
automatically be deemed made on the date of any such payment or disbursement
made by Administrative Agent or the Issuing Bank in the amount of such
obligation and subject to the terms of this Agreement.
(b) The Borrower hereby also agrees to pay to Administrative Agent
immediately upon demand by Administrative Agent or the Issuing Bank and in
immediately available funds, as security for its reimbursement obligations in
respect of the Letters of Credit under Section 3.03(a) hereof and any other
amounts payable hereunder and under the Notes, an amount equal to the aggregate
amount available to be drawn under Letters of Credit then outstanding,
irrespective of whether the Letters of Credit have been drawn upon, upon an
Event of Default. Any such payments shall be deposited in a separate account
designated "World Access Special Account" or such other designation as
Administrative Agent shall elect. All such amounts deposited with Administrative
Agent shall be and shall remain funds of the Borrower on deposit with
Administrative Agent and may be invested by Administrative Agent as
Administrative Agent shall determine. Such amounts may not be used by
Administrative Agent or the Issuing Bank to pay the drawings under the Letters
of Credit; however, such amounts may be used by Administrative Agent and the
Issuing Bank as reimbursement for Letter of Credit drawings which Administrative
Agent or the Issuing Bank has paid. During the existence of an Event of Default
but after the expiration of any Letter of Credit that was not drawn upon, the
Borrower may direct Administrative Agent or the Issuing Bank to use any cash
collateral for any such expired Letter of Credit, if any, to reduce the amount
of the Obligations. Any amounts remaining in the World Access Special Account
after the date of the expiration of all Letters of Credit and after all
Obligations have been paid in full, shall be repaid to the Borrower promptly
after such expiration and such payment in full.
39
46
(c) The obligations of the Borrower under this Section 3.03 will
continue until all Letters of Credit have expired and all reimbursement
obligations with respect thereto have been paid in full by the Borrower and
until all other Obligations shall have been paid in full.
(d) The Borrower shall be obligated to reimburse Administrative
Agent and the Issuing Bank upon demand for all amounts paid under the Letters of
Credit as set forth in Section 3.03(a) hereof; provided, however, if the
Borrower for any reason fails to reimburse Administrative Agent or the Issuing
Bank in full upon demand, whether by failing to or not being permitted to borrow
Advances to pay such reimbursement obligations or otherwise, the Lenders shall
reimburse Administrative Agent and the Issuing Bank in accordance with each
Lender's Specified Percentage for amounts due and unpaid from the Borrower as
set forth in Section 3.04 hereof; provided, however, that no such reimbursement
made by the Lenders shall discharge the Borrower's obligations to reimburse
Administrative Agent or the Issuing Bank.
(e) The Borrower and the Parent shall indemnify and hold
Administrative Agent, the Issuing Bank, or any Lender, its officers, directors,
representatives and employees harmless from loss for any claim, demand or
liability which may be asserted against Administrative Agent, the Issuing Bank,
or such indemnified party in connection with actions taken under the Letters of
Credit or in connection therewith (INCLUDING LOSSES RESULTING FROM THE
NEGLIGENCE OF ADMINISTRATIVE AGENT OR SUCH INDEMNIFIED PARTY), and shall pay
Administrative Agent and the Issuing Bank for reasonable fees of attorneys (who
may be employees of Administrative Agent and the Issuing Bank) and legal costs
paid or incurred by Administrative Agent and the Issuing Bank in connection with
any matter related to the Letters of Credit, except for losses and liabilities
incurred as a direct result of the gross negligence or wilful misconduct of
Administrative Agent, the Issuing Bank, or such indemnified party. If the
Borrower for any reason fails to indemnify or pay Administrative Agent, the
Issuing Bank or such indemnified party of Administrative Agent as set forth
herein in full, the Lenders shall indemnify and pay Administrative Agent upon
demand, in accordance with each Lender's Specified Percentage of such amounts
due and unpaid from the Borrower. The provisions of this Section 3.03(e) shall
survive the termination of this Agreement.
3.04. Lenders' Obligations. Each Lender agrees, unconditionally and
irrevocably, to reimburse Administrative Agent or the Issuing Bank on demand for
such Lender's Specified Percentage of each draw paid by Administrative Agent or
the Issuing Bank under any Letter of Credit. All amounts payable by any Lender
under this subsection shall include interest thereon at the Federal Funds Rate,
from the date of the applicable draw to the date of reimbursement by such
Lender. No Lender shall be liable for the performance or nonperformance of the
obligations of any other Lender under this Section. The obligations of the
Lenders under this Section shall continue after the Maturity Date and shall
survive termination of any Loan Papers.
40
47
3.05. Administrative Agent's Obligations.
(a) Administrative Agent and the Issuing Bank each makes no
representation or warranty, and assumes no responsibility with respect to the
validity, legality, sufficiency or enforceability of any Application or any
document relative thereto or to the collectibility thereunder. Administrative
Agent and the Issuing Bank each assumes no responsibility for the financial
condition of the Borrower and its Subsidiaries or for the performance of any
obligation of the Borrower. Administrative Agent and the Issuing Bank each may
use its discretion with respect to exercising or refraining from exercising any
rights, or taking or refraining from taking any action which may be vested in it
or which it may be entitled to take or assert with respect to any Letter of
Credit or any Application.
(b) Administrative Agent and Issuing Bank each shall be under no
liability to any Lender with respect to anything Administrative Agent or Issuing
Bank may do or refrain from doing in the exercise of its judgment, the sole
liability and responsibility of Administrative Agent or Issuing Bank being to
handle each Lender's share on as favorable a basis as Administrative Agent or
Issuing Bank handles its own share and to promptly remit to each Lender its
share of any sums received by Administrative Agent under Article III or any
Application. Administrative Agent and Issuing Bank shall have no duties or
responsibilities except those expressly set forth herein, and those duties and
liabilities shall be subject to the limitations and qualifications set forth
herein.
(c) Neither Administrative Agent, Issuing Bank, nor any of its
directors, officers, or employees shall be liable for any action taken or
omitted (whether or not such action taken or omitted is expressly set forth
herein) under or in connection herewith or any other instrument or document in
connection herewith, except for gross negligence or willful misconduct, and no
Lender waives its right to institute legal action against Administrative Agent
or Issuing Bank for wrongful payment of any Letter of Credit due to
Administrative Agent's or Issuing Bank's gross negligence or willful misconduct.
Administrative Agent and Issuing Bank shall incur no liability to any Lender,
the Borrower or any Affiliate of the Borrower or Lender in acting upon any
notice, document, order, consent, certificate, warrant or other instrument
reasonably believed by Administrative Agent and Issuing Bank to be genuine or
authentic and to be signed by the proper party.
3.06 Reinstatement. The provisions of this Article III shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the reimbursement obligations in respect
of Letters of Credit is rescinded or must otherwise be restored or returned by
the Administrative Agent or the Issuing Bank upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrower or any other Obligor,
or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or custodian, trustee or similar officer for, the Borrower or
any other Obligor or any part of its property, or otherwise, all as though such
payments had not been made.
3.07 Survivability of Provisions. The Borrower agrees to replace
the Bond Letter of Credit with a Letter of Credit issued by the Administrative
Agent by no later than September 30, 1999.
41
48
The Borrower agrees to replace all other Letters of Credit issued by the Issuing
Bank with a Letter of Credit issued by the Administrative Agent by no later than
January 15, 1999. Notwithstanding the replacement of, or change in the identity
of, the Issuing Bank hereunder, the provisions of this Agreement relating to the
Issuing Bank shall continue to inure to the benefit of any prior Issuing Bank as
to any actions taken or omitted to be taken by such prior Issuing Bank while it
was Issuing Bank hereunder.
ARTICLE IV. CONDITIONS PRECEDENT
4.01. Conditions Precedent to the Initial Advance. The obligations
of each Lender under this Agreement and the obligation of each Lender to make
the Initial Advance shall be subject to the following conditions precedent. On
the Closing Date:
(a) All terms, conditions and documentation in connection with
this Agreement shall be acceptable to the Lenders.
(b) The making of the Available Commitment shall not contravene
any Law applicable to Administrative Agent or any Lender.
(c) Each Lender shall have received a Certificate from an
Authorized Officer stating that no Material Adverse Change, as determined by the
Lenders, shall have occurred and be continuing in the business, assets,
prospects or financial condition of the businesses of the Borrower, the Parent
and the Restricted Subsidiaries since September 30, 1999.
(d) All proceedings of the Borrower, the Parent and the Restricted
Subsidiaries taken in connection with the transactions contemplated hereby, and
all documents incidental thereto, shall be reasonably satisfactory in form and
substance to the Lenders. Each Lender shall have received copies of all
documents or other evidence that it may reasonably request in connection with
such transactions.
(e) Each Lender shall have received an executed copy of this
Agreement, and all documents required to be delivered pursuant thereto, as well
as its respective Notes, duly completed and correct. The Lenders shall have
received copies of the Fee Letters signed by the Borrower, as applicable. Each
of the following shall have been delivered to Administrative Agent on behalf of
Lenders, in form and substance satisfactory to Administrative Agent, Special
Counsel and each Lender to the extent required by Administrative Agent: each
other Loan Paper requested by Administrative Agent, including, without
limitation, all guarantees, pledge agreements, security agreements, mortgages,
deeds of trust, collateral assignments and other agreements granting any
interest in any Collateral.
(f) The Borrower shall have delivered to each Lender a
Certificate, dated as of the Closing Date, executed by an Authorized Officer on
behalf of the Parent, the Borrower and its Restricted Subsidiaries, certifying
that (i) no Default or Event of Default has occurred and is
42
49
continuing, (ii) the representations and warranties set forth in Article V
hereof are true and correct, (iii) each of the Parent, the Borrower and its
Restricted Subsidiaries has complied with all agreements and conditions to be
complied with by it under the Loan Papers by such date, (iv) that the attached
resolutions for each of the Parent, the Borrower and its Restricted Subsidiaries
are the true, accurate and complete resolutions authorizing the corporate
restructuring, the incurrence and performance of the Facility and the Loan
Papers, (v) that the attached copies of certified articles of incorporation, or
other articles of organization, certificates of good standing, certificates of
existence and incumbency certificates for each of the Parent, the Borrower and
its Restricted Subsidiaries are (A) not more than 30 days old and certified by
the appropriate secretary of state or other governmental organization and (B)
represent the true and accurate certificate for each such entity, and (vi) the
attached copies of by-laws or other organizational documents represent the true
and accurate by-laws or other organizational documents for each of the Parent,
the Borrower and its Restricted Subsidiaries in effect on the Closing Date.
(g) Each Lender shall have received opinions of Long ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, corporate counsel to the Parent, the Borrower and the Restricted
Subsidiaries, dated as of the Closing Date, acceptable to the Lenders and
otherwise in form and substance satisfactory to the Lenders and Special Counsel.
(h) Each Lender shall have evidence satisfactory that the
Borrower, the Parent and each of their Subsidiaries has reasonably anticipated
that all computer applications that are material to their respective businesses
and operations will on a timely basis be able to perform properly date-sensitive
functions and will make an inquiry of each of their key suppliers, vendors and
customers as to whether such Persons will on a timely basis be Year 2000
Compliant in all material respects and, on the basis of that inquiry, believe
that all such Persons will be so compliant;
(i) All proceedings of the Parent, the Borrower and the
Subsidiaries of the Parent and the Borrower taken in connection with the
transactions contemplated hereby, and all documents incidental thereto, shall be
satisfactory in form and substance to each Lender. The Administrative Agent and
each Lender shall have received copies of all documents or other evidence that
it may reasonably request in connection with such transactions. No Material
Adverse Change, as determined by the Lenders, shall have occurred and be
continuing in the financial markets. The Borrower shall have paid all fees,
costs and expenses (including the fees of Special Counsel) incurred by the
Lenders in connection with the closing of the Facility.
4.02. Conditions Precedent to All Advances. The obligation of each
Lender to make each Advance, except for Refinancing Advances, which constitutes
an increase, shall be subject to the further conditions precedent that (a) on
the date of such Advance, the following statements shall be true:
(i) The representations and warranties contained in
Article V hereof are true and correct on such date, as though made on
and as of such date (and the delivery of each Borrowing Notice under
Section 2.02(a), and each Conversion or Continuation Notice under
43
50
Section 2.09(b), or the failure to deliver a Conversion or Continuation
Notice under Section 2.09(b), shall constitute a representation that on
the disbursement date such representations are true (except as to
representations and warranties which (i) refer to a specific date, (ii)
have been modified by transactions permitted pursuant to this Agreement
or any other Loan Paper or (iii) have been specifically waived in
writing by Administrative Agent));
(ii) No event has occurred and is continuing, or would
result from such Advance (including the intended application of the
proceeds of such Advance), that does or could constitute a Default or
Event of Default;
(iii) There shall have occurred no Material Adverse Change,
and the making of such Advance shall not cause or result in a Material
Adverse Change; and
(iv) After giving effect to each such Advance, the
aggregate amount of all outstanding Advances plus the undrawn face
amount of all issued and outstanding Letters of Credit do not exceed
the Available Commitment;
and (b) Administrative Agent shall have received, in form and substance
acceptable to it, such other approvals, documents, certificates, opinions and
information as it may deem necessary or appropriate.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that the following are true and
correct:
5.01. Organization and Qualification. Each of the Borrower, the
Parent and their Restricted Subsidiaries is a corporation or partnership duly
organized, validly existing and in good standing under the Laws of the
jurisdiction of its incorporation or formation, as applicable. Each such Person
is qualified to do business in all jurisdictions where the nature of its
business or Properties require such qualification, except to the extent that any
failure to be so qualified could not, in the aggregate, reasonably be expected
to cause a Material Adverse Change. Set forth on Schedule 5.01 attached hereto
is a complete and accurate listing with respect to the Borrower and each of the
Parent and their Restricted Subsidiaries, showing (a) the jurisdiction of its
organization and its mailing address, which is the principal place of business
and executive offices of each unless otherwise indicated, (b) the classes of
Capital Stock and shares of Capital Stock issued and outstanding in each of the
Parent, the Borrower and the Restricted Subsidiaries and the numbers or amounts
of each of the Parent's, the Borrower's and the Restricted Subsidiaries' Capital
Stock authorized and outstanding, (c) other than with respect to the Parent, the
Borrower and the Restricted Subsidiaries, each record and beneficial owner of
outstanding Capital Stock on the date hereof, indicating the ownership
percentage, and (d) all outstanding options, rights, rights of conversion or
purchase, repurchase, rights of first refusal and similar rights relating to the
Capital Stock of each of the Parent, the Borrower and the Restricted
Subsidiaries. Except as set forth on Schedule 5.01 hereto, neither the Borrower,
the Parent nor any Restricted Subsidiary has agreed to grant or issue
44
51
any options, warrants or similar rights to any Person to acquire any Capital
Stock of the Borrower or any Restricted Subsidiary. All Capital Stock is validly
issued and fully paid. The Borrower has no knowledge of any share of Capital
Stock of it, the Parent or any Restricted Subsidiaries being subject to any
Lien, including any restrictions on hypothecation or transfer, except Liens
described on Schedule 5.08 hereto.
5.02. Due Authorization; Validity. The board of directors of the
Borrower, the Parent and each of their Restricted Subsidiaries, or of their
partners, as applicable, have duly authorized the execution, delivery, and
performance of the Loan Papers to be executed by the Borrower and each of the
Parent or their Restricted Subsidiaries, as appropriate. Each of the Borrower,
the Parent and their Restricted Subsidiaries has full legal right, power and
authority to execute, deliver and perform under the Loan Papers to be executed
and delivered by it. The Loan Papers constitute the legal, valid and binding
obligations of the Borrower, the Parent and their Restricted Subsidiaries, as
appropriate, enforceable in accordance with their terms (subject as to
enforcement of remedies to any applicable Debtor Relief Laws).
5.03. Conflicting Agreements and Other Matters. The execution or
delivery of any Loan Papers, and performance thereunder, does not conflict with,
result in a breach of the terms, conditions or provisions of, or constitute a
default under, result in any violation of or result in the creation of any Lien
(other than in favor of Administrative Agent) upon any Properties of the
Borrower, the Parent or their Restricted Subsidiaries under, or require any
consent, approval or other action by, notice to or filing with, any Tribunal or
Person pursuant to any organizational document, by-laws award of any arbitrator,
or any agreement, instrument or Law to which the Borrower, the Parent or any of
their Restricted Subsidiaries or any of their Properties is subject except as
set forth on Schedule 5.03 hereto.
5.04. Financial Statements. The audited financial statements of the
Parent, the Borrower and the Restricted Subsidiaries dated December 31, 1998 and
previously delivered to Administrative Agent, fairly present its financial
position and the results of operations as of the dates and for the periods
shown, all in accordance with GAAP. Such financial statements reflect all
material liabilities, direct and contingent, of the Parent, the Borrower and
their Restricted Subsidiaries that are required to be disclosed in accordance
with GAAP. As of the date of such financial statements, there were no Contingent
Liabilities, liabilities for Taxes, forward or long-term commitments, or
unrealized or anticipated losses from any unfavorable commitments that are
material in amount and that are not reflected on such financial statements or
otherwise disclosed in writing to Administrative Agent. Since September 30,
1999, there has been no Material Adverse Change. The Borrower, the Parent and
each of the Restricted Subsidiaries is Solvent. The projections of the Borrower,
the Parent, and the Restricted Subsidiaries dated December 1, 1999, previously
delivered to Administrative Agent, were prepared in good faith, and management
believes them to be based on reasonable assumptions (each of which is stated in
such statement) and to provide reasonable estimations of future performance as
of the dates and for the periods shown for the Parent, the Borrower and their
Restricted Subsidiaries, subject to the uncertainty and approximation inherent
in any projections. The Borrower's fiscal year ends on December 31.
45
52
5.05. Litigation. Shown on Schedule 5.05 is all Litigation that is
pending and, to the Borrower's best knowledge, threatened against the Borrower,
the Parent and their Restricted Subsidiaries, and any of their Properties or
assets on the date hereof. There is no pending or, to the Borrower's best
knowledge, threatened Litigation against the Borrower, the Parent or their
Restricted Subsidiaries, any of their Properties that could reasonably be
expected to cause a Material Adverse Change.
5.06. Compliance With Laws Regulating the Incurrence of Debt. No
proceeds of any Advance will be used directly or indirectly to acquire any
security in any transaction which is subject to Sections 13 and 14 of the
Exchange Act. The Borrower is not, nor is any of the Parent or their Restricted
Subsidiaries, engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U issued
by the Board of Governors of the Federal Reserve System), 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. Following
the Borrower's intended use of the proceeds of each Advance, not more than 25%
of the value of the assets of the Borrower will be "margin stock", within the
meaning of Regulation U. The Borrower is not subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940, the Interstate Commerce Act (as any of the
preceding acts have been amended), or any other Law that the incurring of Debt
by the Borrower would violate in any material respect, including, without
limitation, Laws relating to common or contract carriers or the sale of
electricity, gas, steam, water, or other public utility services. None of the
Borrower and its Restricted Subsidiaries, nor any agent acting on their behalf,
has taken or will knowingly take any action which might cause this Agreement or
any Loan Papers to violate any regulation of the Board of Governors of the
Federal Reserve System or to violate the Exchange Act, in each case as in effect
now or as the same may hereafter be in effect.
5.07. Licenses, Title to Properties, and Related Matters. Except as
listed on Schedule 5.07 hereto, the Borrower and each of the Parent and their
Restricted Subsidiaries possess all material Authorizations necessary and
appropriate to own, operate and conduct their business or otherwise for the
operation of their businesses and are not in violation thereof in any material
respect. All Authorizations are in full force and effect, and no event has
occurred that permits, or after notice or lapse of time could permit, the
revocation, termination or material and adverse modification of any such
Authorization, except those which in the aggregate could not reasonably be
expected to cause a Material Adverse Change. Schedule 5.07 shows the expiration
date and/or termination date for each Authorization (including, without
limitation, FCC Licenses) in effect on the Closing Date. The Borrower is not,
nor is any Subsidiary of the Borrower or the Parent, in violation of any
material duty or obligation required by the Communications Act of 1934, as
amended, or any FCC rule or regulation applicable to the operation of any
portion of any of its business. There is not pending or, to the best knowledge
of the Borrower, threatened, any action by the FCC to revoke, cancel, suspend or
refuse to renew any FCC License relating to any of the Borrower's, the Parent's,
or the Restricted Subsidiaries' business. There is not pending or, or to the
best knowledge of the Borrower, threatened, any action by the FCC to modify
adversely, revoke, cancel, suspend or refuse to renew any other Authorization
relating to such business. There is not issued or outstanding or, to the best
46
53
knowledge of the Borrower, threatened, any notice of any hearing, violation or
material complaint against the Borrower, the Parent or any of the Restricted
Subsidiaries with respect to the operation of any portion of such businesses,
and the Borrower has no knowledge that any Person intends to contest renewal of
any Authorization relating to such business. Each of the Borrower, the Parent
and their Restricted Subsidiaries has requisite corporate or partnership power
(as applicable) and legal right to own and operate its Property and to conduct
its business. Each has good and indefeasible title (fee or leasehold, as
applicable) to its Property, subject to no Lien of any kind, except Permitted
Liens. All of the assets of the Borrower, the Parent and each of their
Restricted Subsidiaries are located within the municipalities and borough
locations described on Schedule 5.07. Neither the Borrower, nor the Parent nor
their Restricted Subsidiaries is in violation of its respective articles of
organization or incorporation (as applicable) or bylaws. Neither the Borrower,
nor the Parent nor their Restricted Subsidiaries is in violation of any Law, or
material agreement or instrument binding on or affecting it or any of its
Properties, the effect of which could reasonably be expected to cause a Material
Adverse Change. No business or Properties of the Parent, the Borrower or any
Restricted Subsidiary is affected by any strike, lock-out or other labor
dispute. No business or Properties of the Parent, the Borrower or any Restricted
Subsidiary is affected by any drought, storm, earthquake, embargo, act of God or
public enemy or other casualty, the effect of which could reasonably be expected
to cause a Material Adverse Change.
5.08. Outstanding Debt and Liens. The Borrower, the Parent and their
Restricted Subsidiaries have no outstanding Debt, Contingent Liabilities or
Liens, except Permitted Liens, except as shown on Schedule 5.08 hereto. No
breach, default or event of default exists under any document, instrument or
agreement evidencing or otherwise relating to any Funded Debt of any of the
Borrower, the Parent or their Restricted Subsidiaries.
5.09. ERISA. Each Plan of the Parent, the Borrower and each
Restricted Subsidiary of the Parent and the Borrower has satisfied the minimum
funding standards under all Laws applicable thereto, and no Plan has an
accumulated funding deficiency thereunder. The Borrower has not, and neither has
the Parent nor any Restricted Subsidiary of the Borrower or the Parent, incurred
any material liability to the PBGC with respect to any Plan. No ERISA Event has
occurred with respect to any Plan for which an Insufficiency in excess of
$100,000 exists on the date of such occurrence. None of the Parent, the
Borrower, nor any Restricted Subsidiary of the Parent or the Borrower has
participated in any non-exempt Prohibited Transaction with respect to any Plan
or trust created thereunder. None of the Borrower, the Parent or any Restricted
Subsidiary of the Parent or the Borrower, nor any ERISA Affiliate has incurred
any Withdrawal Liability to any Multiemployer Plan that has not been satisfied.
None of the Borrower, the Parent or any Restricted Subsidiary of the Parent or
the Borrower, 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.
5.10. Environmental Laws. The Borrower, the Parent and each of their
Restricted Subsidiaries have obtained all material environmental, health and
safety permits, licenses and other material authorizations required under all
Applicable Environmental Laws to carry on their
47
54
respective businesses as being conducted. On the Closing Date, there are no
environmental liabilities of the Borrower, the Parent or any other of their
Restricted Subsidiaries (with respect to any fee owned or leased Properties),
except as disclosed and described in detail on Schedule 5.11 hereto. Each of
such permits, licenses and authorizations is in full force and effect, and the
Borrower and each Restricted Subsidiary is in compliance with the terms and
conditions thereof and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply with any thereof could not reasonably be expected to cause a
Material Adverse Change. In addition, no written notice, notification, demand,
request for information, citation, summons or order has been issued, no written
complaint has been filed, no penalty has been assessed and no investigation or
review is pending or, to the best knowledge of the Borrower or any Restricted
Subsidiary, threatened, by any Tribunal or other entity with respect to any
alleged failure by the Borrower or any Restricted Subsidiary to have any
environmental, health or safety permit, license or other authorization required
under any Applicable Environmental Law in connection with the conduct of the
business of the Borrower or any Restricted Subsidiary or with respect to any
generation, treatment, storage, recycling, transportation, discharge, disposal
or release of any Hazardous Materials by the Borrower or any Restricted
Subsidiary. To the best knowledge of the Borrower and each Restricted
Subsidiary, there are no material environmental liabilities of the Borrower or
any Restricted Subsidiary, except as previously disclosed in writing to the
Lenders. To the best knowledge of the Borrower and each Restricted Subsidiary,
there are no environmental liabilities of the Borrower or any Restricted
Subsidiary which could reasonably be expected to cause a Material Adverse
Change. The Borrower has delivered to Administrative Agent copies of all
environmental studies and reports conducted or received by the Borrower or any
Restricted Subsidiary in connection with real Property. Such studies cover all
real Property, if any, owned in fee by the Borrower and each Restricted
Subsidiary. No Hazardous Materials are generated or produced at or in connection
with the Properties and operations of the Borrower or any Restricted Subsidiary,
nor have any Hazardous Materials been disposed of or otherwise released on or to
any Property on which any operations of the Borrower or any Restricted
Subsidiaries are conducted, except in compliance with Applicable Environmental
Laws.
5.11. Disclosure. Neither the Borrower, nor the Parent, nor any
Restricted Subsidiary has made a material misstatement of fact or failed to
disclose any material fact necessary to make the facts disclosed not misleading
in light of the circumstances under which they were made, to Administrative
Agent or any Lender during the course of application for and negotiation of any
Loan Papers or otherwise in connection with any Advances. There is no fact known
to the Borrower, the Parent or any other Restricted Subsidiary that materially
adversely affects any of the Borrower's, the Parent's or any Restricted
Subsidiary's Properties or business, or that could constitute a Material Adverse
Change, and that has not been set forth in the Loan Papers or in other documents
furnished to Administrative Agent or to any Lender.
48
55
5.12. Investments; Restricted Subsidiaries. The Parent, the Borrower
and the Restricted Subsidiaries have no Investments except as described on
Schedule 5.12 hereto and as permitted by Section 7.10 hereof. Schedule 5.12 is a
complete and accurate listing with respect to each of the Parent, the Borrower
and the Restricted Subsidiaries showing (a) its complete name, (b) its
jurisdiction of organization, (c) its capital structure, (d) its street and
mailing address, which is its principal place of business and executive office,
and (e) all interests in the Parent, the Borrower and the Restricted
Subsidiaries.
5.13. Certain Fees. No broker's, finder's, management fee or other
fee or commission will be payable by the Borrower with respect to the making of
the Available Commitment or Advances hereunder other than fees payable
hereunder. The Borrower, the Parent and each Restricted Subsidiary hereby agree
to indemnify and hold harmless Administrative Agent and each Lender from and
against any claims, demand, liability, proceedings, costs or expenses asserted
with respect to or arising in connection with any such fees or commissions.
5.14. Intellectual Property. The Borrower, the Parent and each
Restricted Subsidiary have obtained all patents, trademarks, service-marks,
trade names, copyrights, licenses and other rights, free from material
restrictions, which are necessary for the operation of their respective
businesses as presently conducted and as proposed to be conducted. Nothing has
come to the attention of the Borrower, the Parent or any Restricted Subsidiary
to the effect that (a) any process, method, part or other material presently
contemplated to be employed by the Borrower, the Parent or any other Restricted
Subsidiary may or could reasonably be alleged to infringe any patent, trademark,
service-▇▇▇▇, trade name, license or other right (except copyright) owned by any
other Person, or (b) except as shown on Schedule 5.05 attached hereto, there is
not pending or threatened any claim or litigation against or affecting the
Borrower, the Parent or any other Restricted Subsidiary contesting its right to
sell or use any such process, method, part or other material. Nothing has come
to the attention of the Borrower, the Parent or any Restricted Subsidiary to the
effect that any material presently contemplated to be employed by the Borrower,
the Parent or any Restricted Subsidiary may or could reasonably be alleged to
infringe any copyright owned by any other Person, except to the extent that any
such infringement, when aggregated with all other copyright infringements, could
not reasonably be expected to cause a Material Adverse Change.
5.15. Year 2000 Compliance.
(a) Any reprogramming required to permit the proper functioning,
in and following the year 2000, of (i) the computer systems used by the
Borrower, the Parent and their Subsidiaries and (ii) equipment containing
embedded microchips (including systems and equipment supplied by others or with
which any of such systems interface) and the testing of all such material
systems and equipment, as so reprogrammed, will be completed by September 30,
1999. The cost to the Borrower, the Parent and the Restricted Subsidiaries of
such reprogramming and testing and of the reasonably foreseeable consequences of
year 2000 to the Borrower, the Parent and the Restricted Subsidiaries
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or Event of Default or cause
a Material Adverse Change.
49
56
Except for such of the reprogramming referred to in the immediately preceding
sentence as may be necessary, the computer and management information systems of
the Borrower, the Parent and their Subsidiaries are and, with ordinary course
upgrading and maintenance, will continue for the term of this Agreement to be,
sufficient to permit the Borrower, the Parent and their respective Subsidiaries
to conduct their respective businesses without causing a Material Adverse
Change.
(b) Each of the Borrower, the Parent and their Subsidiaries is in
the process of making inquiry of each of its key suppliers, vendors and
customers as to whether such Person will on a timely basis be Year 2000
Compliant in all material respects. "Key suppliers, vendors and customers"
refers to those suppliers, vendors and customers of the Borrower, the Parent and
their Subsidiaries, the business failure of which could result in a Material
Adverse Change.
5.16. Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the Closing Date and at and as of the date of each Advance,
except for Refinancing Advances, and each shall be true and correct when made,
except to the extent (a) previously fulfilled in accordance with the terms
hereof, (b) subsequently inapplicable, or (c) previously waived in writing by
Administrative Agent and Lenders with respect to any particular factual
circumstance. The representations and warranties made under this Agreement shall
be deemed applicable to each Restricted Subsidiary as of the formation or
acquisition of such Restricted Subsidiary and at and as of each date the
representations and warranties are remade pursuant to this provision. All
representations and warranties made under this Agreement shall survive, and not
be waived by, the execution hereof by Administrative Agent and Lenders, any
investigation or inquiry by Administrative Agent or any Lender, or by the making
of any Advance under this Agreement.
5.17. World Access Charitable Trust Transaction. The World Access
Charitable Trust Transaction will not result in a breach of the terms,
conditions or provisions of any material agreement to which the Borrower or any
Restricted Subsidiary is a party. The World Access Charitable Trust Transaction
will not result in a breach of any Applicable Law.
ARTICLE VI. AFFIRMATIVE COVENANTS
So long as the Available Commitment, any Advance, any Letter of Credit
or any portion of the Obligations is outstanding, or the Borrower, the Parent or
any other Restricted Subsidiary owes any other amount hereunder or under any
other Loan Paper:
6.01. Compliance with Laws and Payment of Debt. The Borrower shall,
and shall cause the Parent and all Restricted Subsidiaries to, comply in all
material respects with all Applicable Laws, including, without limitation,
compliance with ERISA and all applicable federal and state securities Laws. The
Borrower shall, and shall cause the Parent and all Restricted Subsidiaries to,
pay its (a) Funded Debt as and when due (or within any applicable grace period),
unless payment thereof is being contested in good faith by appropriate
proceedings and adequate reserves have been established therefor, and (b) trade
debt in accordance with its past practices, and in any event before
50
57
any trade creditor takes any action or terminates any relationship, except those
disputes diligently contested in good faith by the Borrower, the Parent and
their Restricted Subsidiaries for which appropriate reserves have been
established in accordance with GAAP.
6.02. Insurance. The Borrower shall, and shall cause the Parent and
each Restricted Subsidiaries to, (a) keep its offices and other insurable
Properties adequately insured at all times by reputable insurers to such extent
and against such risks, including fire and other risks insured against by
extended coverage, as is customary with companies similarly situated and in the
same or similar businesses, (b) maintain in full force and effect public
liability (including liability insurance for all vehicles and other insurable
Property) and workers' compensation insurance, in amounts customary for such
similar companies to cover normal risks, by insurers satisfactory to
Administrative Agent, (c) maintain business interruption insurance for such
business in amounts satisfactory to the Lenders, and (d) maintain other
insurance as may be required by Law or reasonably requested by Administrative
Agent, provided that such insurance policies will show Administrative Agent, on
behalf of the Lenders, as additional insured or loss payee, as appropriate. The
Borrower shall deliver evidence of renewal of each insurance policy on or before
the date of its expiration, and from time to time shall deliver to
Administrative Agent, upon demand, evidence of the maintenance of such
insurance.
6.03. Inspection Rights. The Borrower shall, and shall cause the
Parent and each Restricted Subsidiary to, permit Administrative Agent or any
Lender, upon one day's notice or such lesser notice as is reasonable under the
circumstances, to examine and make copies of and abstracts from their records
and books of account, to visit and inspect their Properties and to discuss their
affairs, finances, and accounts with any of their directors, officers,
employees, accountants, attorneys and other representatives, all as
Administrative Agent or any Lender may reasonably request.
6.04. Records and Books of Account; Changes in GAAP. The Borrower
shall, and shall cause the Parent and each Subsidiary of the Parent and the
Borrower to, keep adequate records and books of account in conformity with GAAP.
The Borrower shall not, nor shall the Borrower permit the Parent or any
Restricted Subsidiary of the Borrower or the Parent to change its fiscal year or
its method of financial accounting except in accordance with GAAP. In connection
with any such change after the date hereof, the Borrower and Lenders shall
negotiate in good faith to make appropriate alterations to the covenants set
forth in Section 7.01 hereof, reflecting such change.
6.05. Reporting Requirements. The Borrower shall furnish to the
Administrative Agent:
(a) As soon as available and in any event within 75 days after the
end of the Borrower's fiscal quarters, (i) consolidated balance sheets of
Parent, the Borrower, and the Restricted Subsidiaries and consolidating balance
sheets of the Borrower and its Subsidiaries, as of the end of such quarter, and
consolidated statements of income and statements of cash flows of the Parent,
the Borrower, and each of the Restricted Subsidiaries and consolidating
statements of income and statements of cash flows of the Parent, the Borrower
and the Restricted Subsidiaries, for the portion of the fiscal year ending with
such quarter, setting forth, in comparative form, figures for the
51
58
corresponding periods in the previous fiscal year, all in reasonable detail, and
certified by an Authorized Officer as prepared in accordance with GAAP, and
fairly presenting the financial position and results of operations of the
Parent, the Borrower and the Restricted Subsidiaries, subject to normal year-end
adjustments, (ii) for the Parent, the Borrower and the Restricted Subsidiaries,
comparisons and reconciliations of actual results to the budget delivered
pursuant to Section 6.05(e) below for the fiscal quarter most recently ended, in
reasonable detail and satisfactory to the Administrative Agent, and (iii) for
the Parent, the Borrower and the Restricted Subsidiaries, all information set
forth in (i) and (ii) above in a separate presentation;
(b) As soon as available, and in any event within 120 days after
the end of each fiscal year, (i) consolidated balance sheets of the Parent, the
Borrower and the Restricted Subsidiaries, and consolidating balance sheets of
the Parent, the Borrower and the Restricted Subsidiaries, as of the end of such
fiscal year, and consolidated statements of income and cash flows of the Parent,
the Borrower and the Restricted Subsidiaries, and consolidating statements of
income and cash flows of the Parent, the Borrower and the Restricted
Subsidiaries, for such fiscal year, all in reasonable detail, prepared in
accordance with GAAP, and accompanied by an unqualified opinion of the Auditor,
which opinion shall state that such financial statements were prepared in
accordance with GAAP, that the examination by the Auditor in connection with
such financial statements was made in accordance with generally accepted
auditing standards, and that such financial statements present fairly the
financial position and results of operations of the Parent, the Borrower and the
Restricted Subsidiaries, and (ii) for the Parent, the Borrower and the
Restricted Subsidiaries, all information set forth in (i) above in a separate
presentation;
(c) Promptly upon receipt thereof, (i) copies of all material
reports or letters submitted to the Borrower, the Parent or any Subsidiary of
the Borrower or the Parent by the Auditor or any other accountants in connection
with any annual, interim, or special audit, including without limitation, the
comment letter submitted to management in connection with any such audit, (ii)
each financial statement, report, notice or proxy statement sent by the Parent,
the Borrower or any Restricted Subsidiary in writing to stockholders generally,
(iii) each regular or periodic report and any registration statement or
prospectus (or material written communication in respect of any thereof) filed
by the Parent, the Borrower or any Restricted Subsidiary with any securities
exchange, with the Securities and Exchange Commission or any successor agency,
and (iv) all press releases concerning material financial aspects of the Parent,
the Borrower or any Restricted Subsidiary;
(d) Together with each set of financial statements delivered
pursuant to subsections (a) and (b) above, a Compliance Certificate executed by
an Authorized Officer, (i) certifying that there has occurred no Default or
Event of Event of Default, (ii) computing the Applicable Margin, and (iii)
setting forth the detailed calculations with respect to the financial covenants
required by Section 7.01 hereof;
(e) As soon as available, and in any event not later than 45 days
after the beginning of each fiscal year of the Borrower, the annual operating
and Capital Expenditure budgets of the Borrower and the Restricted Subsidiaries
for such fiscal year;
52
59
(f) Promptly upon knowledge by the Borrower, the Parent or any
Restricted Subsidiary of the occurrence of any Default or Event of Default, a
notice from an Authorized Officer, setting forth the details of such Default or
Event of Default and the action being taken or proposed to be taken with respect
thereto;
(g) As soon as possible, and in any event within five Business
Days after knowledge thereof by the Borrower, the Parent or any Restricted
Subsidiary, notice of any Litigation pending or threatened against the Borrower,
the Parent or any Restricted Subsidiary which, if determined adversely, could
reasonably be expected to result in a judgment, penalties or damages in excess
of $5,000,000, together with a statement of an Authorized Officer describing the
allegations of such Litigation and the action being taken or proposed to be
taken with respect thereto;
(h) Promptly following notice or knowledge thereof by the
Borrower, the Parent or any other Restricted Subsidiaries, notice of any actual
or threatened loss or termination of any material Authorization of the Borrower,
the Parent or any Restricted Subsidiary, together with a statement of an
Authorized Officer describing the circumstances surrounding the same and the
action being taken or proposed to be taken with respect thereto;
(i) Promptly after filing or receipt thereof, copies of all
reports and notices that the Parent, the Borrower or any Restricted Subsidiary
(i) files or receives in respect of any Plan with or from the Internal Revenue
Service, the PBGC or the United States Department of Labor, or (ii) furnishes to
or receives from any holders of any Debt or Contingent Liability, if in either
case, any information or dispute referred to therein either causes a Default or
Event of Default or could reasonably be expected to cause or result in a Default
or an Event of Default;
(j) Within 30 days after renewal or issuance of any hazard, public
liability, business interruption or other insurance policy maintained by the
Borrower, the Parent or any Restricted Subsidiary, a copy of the binder or
insurance certificate (showing Administrative Agent, on behalf of the Borrower,
the Parent or any Restricted Subsidiary, as loss payee or additional insured, as
appropriate);
(k) As soon as possible and in any event within 10 days after the
Borrower, the Parent or any Restricted Subsidiary knows that any Reportable
Event has occurred with respect to any Plan, a statement, signed by an
Authorized Officer, describing said Reportable Event and the action which the
such Person proposes to take with respect thereto;
(l) As soon as possible, and in any event within 10 days after
receipt by the Borrower, the Parent or any Restricted Subsidiary thereof, a copy
of (a) any notice or claim to the effect that the Borrower, the Parent or any
Restricted Subsidiary is or may be liable to any Person as a result of the
release by the Borrower, the Parent, any Restricted Subsidiary or any other
Person of any toxic or hazardous waste or substance into the environment, and
(b) any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Borrower, the
53
60
Parent or any Restricted Subsidiary, which, in either case, could reasonably be
expected to cause a Material Adverse Change;
(m) Promptly upon the filing thereof, copies of all material
registration statements and all annual, quarterly, monthly or other regular
reports which the Parent, the Borrower or any Restricted Subsidiary files with
the FCC or the Securities and Exchange Commission; and
(n) Promptly upon request, such other information concerning the
condition or operations of the Borrower, the Parent and any of the Restricted
Subsidiaries and any of their Affiliates, financial or otherwise, as
Administrative Agent or any Lender may from time to time reasonably request.
6.06. Use of Proceeds. The proceeds of the Advances shall be
available (and the Borrower shall use such proceeds) to (a) refinance existing
Funded Debt of the Borrower and its Restricted Subsidiaries, (b) fund Capital
Expenditures of the Borrower and the Restricted Subsidiaries permitted by the
terms of this Agreement, and (c) fund certain acquisitions, and (d) use for
general working capital purposes.
6.07. Maintenance of Existence and Assets. The Borrower shall
maintain, and shall cause the Parent and each Restricted Subsidiary to maintain,
its corporate existence, authority to do business in the jurisdictions in which
it is necessary for the Borrower, the Parent or each Restricted Subsidiary to do
so, and all Authorizations necessary for the operation of any of their
businesses. The Borrower shall maintain, and shall cause the Parent and each
other Restricted Subsidiary to maintain, the assets necessary for use in their
respective businesses in good repair, working order and condition (normal wear
and tear excepted), and make all such repairs, renewals and replacements thereof
as may be reasonably required.
6.08. Payment of Taxes. The Borrower will, and will cause the Parent
and all Subsidiaries of the Parent and the Borrower to, promptly pay and
discharge all lawful Taxes imposed upon it or upon its income or profit or upon
any Property belonging to it, unless such Tax shall not at the time be due and
payable, or if the validity thereof shall currently be contested on a timely
basis in good faith by appropriate proceedings (provided that the enforcement of
any Liens arising out of any such nonpayment shall be stayed or bonded during
the proceedings) and adequate reserves with respect to such Tax shall have been
established in accordance with GAAP.
6.09. INDEMNITY.
(A) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD
HARMLESS ADMINISTRATIVE AGENT AND EACH LENDER, EACH OF THEIR RESPECTIVE
AFFILIATES, AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH AFFILIATES') OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, SHAREHOLDERS AND CONSULTANTS
(INCLUDING, WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION WITH THE
SATISFACTION OR ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET FORTH
HEREIN) OF EACH OF THE FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST
ANY AND ALL LIABILITIES, OBLIGATIONS,
54
61
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, CLAIMS, COSTS, EXPENSES
AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT
LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH
INDEMNITEES IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
PROCEEDING, WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO
OR SUCH PROCEEDING SHALL HAVE ACTUALLY BEEN INSTITUTED), IMPOSED ON, INCURRED
BY, OR ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT OR
CONSEQUENTIAL AND WHETHER BASED ON ANY FEDERAL, STATE, OR LOCAL LAWS AND
REGULATIONS, UNDER COMMON LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR
OTHERWISE), ARISING FROM OR CONNECTED WITH THE PAST, PRESENT OR FUTURE
OPERATIONS OF THE PARENT, THE BORROWER, ANY RESTRICTED SUBSIDIARY OF THE
BORROWER OR THE PARENT, ANY OTHER RESTRICTED SUBSIDIARY, ANY AFFILIATE OR ANY
PREDECESSORS IN INTEREST, OR THE PAST, PRESENT OR FUTURE ENVIRONMENTAL CONDITION
OF PROPERTY OF THE PARENT, THE BORROWER, ANY RESTRICTED SUBSIDIARY OF THE
BORROWER OR PARENT, ANY OTHER RESTRICTED SUBSIDIARY, ANY AFFILIATE OR ANY
PREDECESSORS IN INTEREST, IN EACH CASE RELATING TO OR ARISING OUT OF THIS
AGREEMENT, THE LOAN PAPERS OR ANY ACT, EVENT OR TRANSACTION OR ALLEGED ACT,
EVENT OR TRANSACTION RELATING OR ATTENDANT THERETO AND THE MANAGEMENT OF THE
ADVANCES BY THE ADMINISTRATIVE AGENT, INCLUDING IN CONNECTION WITH, OR AS A
RESULT, IN WHOLE OR IN PART, OF ANY NEGLIGENCE OF ADMINISTRATIVE AGENT OR ANY
LENDER (OTHER THAN THOSE MATTERS INVOLVING A CLAIM BY A PARTICIPANT PURCHASER
AGAINST ANY LENDER AND NOT THE BORROWER), OR THE USE OR INTENDED USE OF THE
PROCEEDS OF THE ADVANCES HEREUNDER, OR IN CONNECTION WITH ANY INVESTIGATION OF
ANY POTENTIAL MATTER COVERED HEREBY, BUT EXCLUDING ANY CLAIM OR LIABILITY THAT
ARISES AS THE RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY
INDEMNITEE, AS FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT
JURISDICTION (COLLECTIVELY, "INDEMNIFIED MATTERS").
(B) IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL REASONABLE
EXPENSES (INCLUDING THE COST OF ANY INVESTIGATION AND PREPARATION) INCURRED IN
CONNECTION WITH ANY INDEMNIFIED MATTER. IF FOR ANY REASON THE FOREGOING
INDEMNIFICATION IS UNAVAILABLE TO ANY INDEMNITEE OR INSUFFICIENT TO HOLD ANY
INDEMNITEE HARMLESS WITH RESPECT TO INDEMNIFIED MATTERS, THEN THE BORROWER SHALL
CONTRIBUTE TO THE AMOUNT PAID OR PAYABLE BY SUCH INDEMNITEE AS A RESULT OF SUCH
LOSS, CLAIM, DAMAGE OR LIABILITY IN SUCH PROPORTION AS IS APPROPRIATE TO REFLECT
NOT ONLY THE RELATIVE BENEFITS RECEIVED BY THE BORROWER AND THE HOLDERS OF THE
CAPITAL STOCK OF THE BORROWER ON THE ONE HAND, AND SUCH INDEMNITEE ON THE OTHER
HAND, BUT ALSO THE RELATIVE FAULT OF THE BORROWER AND SUCH INDEMNITEE, AS WELL
AS ANY OTHER RELEVANT EQUITABLE CONSIDERATIONS. THE REIMBURSEMENT, INDEMNITY AND
CONTRIBUTION OBLIGATIONS UNDER THIS SECTION SHALL BE IN ADDITION TO ANY
LIABILITY WHICH THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME
TERMS AND CONDITIONS TO EACH INDEMNITEE AND SHALL BE BINDING UPON AND INURE TO
THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES, AS
THE CASE MAY BE, OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND ALL
OTHER INDEMNITEES. THE OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 6.09 SHALL
SURVIVE (I) THE EXECUTION OF THIS AGREEMENT AND (II) ANY TERMINATION OF THIS
AGREEMENT AND PAYMENT OF THE OBLIGATIONS.
6.10. Management Fees Paid and Earned. The Borrower agrees that no
Management Fees will be paid by the Borrower or any Restricted Subsidiary to any
Person at any time.
55
62
6.11. Authorizations and Material Agreements. The Borrower shall,
and shall cause the Parent and the Restricted Subsidiaries to, obtain and comply
in all material respects with all FCC Licenses relating to the Borrower's, the
Parent's or the Subsidiaries' businesses. The Borrower shall, and shall cause
the Parent and the Restricted Subsidiaries to, obtain and comply in all material
respects with all Authorizations relating to such businesses, except to the
extent that a failure to do so could not reasonably be expected to cause or
result in a Material Adverse Change. The Borrower shall, and shall cause the
Parent and all other Restricted Subsidiaries to, maintain and comply in all
material respects with all agreements necessary or appropriate for any of them
to own, maintain or operate any of their businesses or Properties.
6.12. Further Assurances. The Borrower shall, and shall cause the
Parent and each other Restricted Subsidiary to, make, execute or endorse and
acknowledge and deliver or file or cause the same to be done, all such vouchers,
invoices, notices, certifications and additional agreements, undertakings,
conveyances, deeds of trust, mortgages, security agreements, transfers,
assignments, financing statements and other assurances, and take any and all
such other action, as Administrative Agent may, from time to time, deem
reasonably necessary or proper in connection with the Parent or any Restricted
Subsidiary's obligations under any of the Loan Papers and the obligations of the
Borrower thereunder, or for better assuring and confirming unto Administrative
Agent all or any part of the security for any of the Obligations.
6.13. Year 2000 Compliance. The Borrower will promptly notify
Administrative Agent if the Borrower discovers or determines that any computer
application (including those of its suppliers and vendors) that is material to
its or any of the Parent's or any of the Borrower's and/or the Parent's
Subsidiaries' businesses and operations will not be Year 2000 Compliant on a
timely basis, except to the extent that such failure could not be reasonably
expected to cause a Material Adverse Change.
6.14. Subsidiaries and Other Obligors. The Borrower shall cause each
of the Restricted Subsidiaries and the Parent to comply with each provision of
this Article VI.
ARTICLE VII. NEGATIVE COVENANTS
So long as the Available Commitment, any Advance, or any portion of the
Obligations is outstanding, or the Borrower, the Parent or any Restricted
Subsidiary owes any other amount hereunder or under any other Loan Paper:
7.01. Financial Covenants. The Borrower and the Restricted
Subsidiaries shall comply with the following covenants:
(a) Total Senior Leverage Ratio. At all times during the term
hereof, the Total Senior Leverage Ratio shall not be greater than (i) for the
period from the Closing Date through June 29, 2000, 2.00 to 1.00, (ii) for the
period from June 30, 2000 through September 29, 2000, 1.50 to 1.00, and (iii)
for the period from September 30, 2000 through the Maturity Date, 1.25 to 1.00.
56
63
(b) Interest Coverage Ratio. At all times during the term hereof,
the Interest Coverage Ratio shall not be less than 2.50 to 1.00.
(c) Fixed Charges Coverage Ratio. At all times during the term
hereof, the Fixed Charges Coverage Ratio shall not be less than 1.25 to 1.00.
(d) Minimum Operating Cash Flow. The Operating Cash Flow for the
immediately preceding two fiscal quarters shall not be less than the Operating
Cash Flow amounts for such period as set forth below:
Six Month Period Ending Minimum Operating Cash Flow
----------------------- ---------------------------
September 30, 1999 $38,300,000
December 31, 1999 $37,400,000
March 31, 2000 $32,600,000
June 30, 2000 $38,800,000
September 30, 2000 $49,600,000
7.02. Debt. The Borrower shall not, and shall not permit the Parent,
any of the other Restricted Subsidiaries or any of the FaciliCom Unrestricted
Subsidiaries to, create, incur, assume, become or be liable in any manner in
respect of or suffer to exist, any Debt, except (a) Debt under the Loan Papers,
(b) Debt under the Subordinated Notes and other Debt in existence on the date
hereof as shown on Schedule 5.08 hereto, and renewals, extensions (but not
increases) and refinancings thereof on terms substantially similar thereto and
on terms no more restrictive, (c) trade payables incurred and paid in the
ordinary course of business, (d) Debt between the Borrower and its Restricted
Subsidiaries, and (e) so long as there exists no Default or Event of Default in
existence at the time incurred and none is caused thereby, (i) $100,000,000 in
Debt constituting Capital Leases outstanding in the aggregate at any one time,
(ii) unsecured subordinated Debt of the Borrower on terms and conditions
acceptable to the Administrative Agent and each Lender, subordinated to the
Facility pursuant to the subordination language set forth on Schedule 7.02
hereto and not in excess of $25,000,000 at any one time outstanding, (iii) with
respect to the Borrower Debt of the Borrower under Interest Hedge Agreements,
(iv) Debt For Borrowed Money not in excess of $5,000,000 secured by a Lien on
the Provo, Utah property, (v) no more than $25,000,000 in recourse third- party
financing and factoring arrangements outstanding at any one time, (vi) accrued
but unpaid Earn-Out Liabilities, (vii) Debt under the FaciliCom Notes and (viii)
Debt under the Exchange Indenture issued in exchange for the FaciliCom Notes
pursuant to an offer to exchange on terms and conditions acceptable to
Administrative Agent.
57
64
7.03. Contingent Liabilities. The Borrower shall not, and shall not
permit the Parent, or any of the Restricted Subsidiaries to, create, incur,
assume, become or be liable in any manner in respect of, or suffer to exist, any
Contingent Liabilities, except Contingent Liabilities under or relating to the
Loan Papers, Contingent Liabilities incurred in the ordinary course of business,
and Contingent Liabilities described on Schedule 7.03 hereof, and Contingent
Liabilities in respect of the World Access Charitable Trust Transaction.
7.04. Liens. The Borrower shall not, and shall not permit the
Parent, or any of the Restricted Subsidiaries to, create or suffer to exist any
Lien upon any of its Properties, except Permitted Liens and Liens securing Debt
permitted under Section 7.02(e)(i) and (v) hereof. It is specifically
acknowledged and agreed that the Borrower shall not, and shall not permit the
Parent or any of the Restricted Subsidiaries to, hereafter agree with any Person
(other than Administrative Agent) not to ▇▇▇▇▇ ▇ ▇▇▇▇ on any of its assets.
7.05. Dispositions of Assets. Except for Permitted Dispositions, the
Borrower shall not, and shall not permit the Parent or any of the Restricted
Subsidiaries to, sell, lease, assign, or otherwise dispose of any assets of the
Borrower or any Restricted Subsidiary, or otherwise consummate any Asset Sale.
7.06. Distributions and Restricted Payments. The Borrower shall not,
and shall not permit the Parent, any Restricted Subsidiary or the FaciliCom
Unrestricted Subsidiaries to, make any Restricted Payments, other than (a) any
Restricted Payment in the form of a Distribution made by any Restricted
Subsidiary or the FaciliCom Unrestricted Subsidiaries to any other Restricted
Subsidiary or to the Borrower, (b) other than so long as there exists no Default
or Event of Default both before and after giving effect to any such Restricted
Payment, (i) scheduled cash interest payments required to be paid by WA Telcom
Products Co., Inc. under the Subordinated Notes, (ii) issuances of common stock
by the Parent in connection with its Earn-Out Liabilities and (iii) Restricted
Payments required to be made by the Series A Certificate of Designation as in
effect on April 21, 1999, by the Series B Certificate of Designation, and by the
Series C Certificate of Designation in the form presented to the Administrative
Agent and the Lenders; (iv) issuances of common stock pursuant to Section 8,
Section 10, or Section 11 of the Series A Certificate of Designation, pursuant
to Section 8, Section 9, or Section 10 of the Series B Certificate of
Designation (and the payment of cash in lieu of fractional shares in each case)
and pursuant to Section 6 and Section 7 of the Series C Certificate of
Designation (and the payment of cash in lieu of fractional shares in each case)
and (v) scheduled cash interest payments required to be paid by World Access,
Inc. under the Exchange Notes and (c) other than so long as there exists no
Default or Event of Default both before and after giving effect to any such
Restricted Payment, the issuance of Common Stock pursuant to Section 6 or
Section 7 of the Series C Certificate of Designation (and the payment of cash in
lieu of fractional shares in each case). To the extent required by the terms of
the Credit Agreement (including without limitation Sections 2.04, 2.05, and
7.12), the Lenders consent to the execution by the Parent of the Purchase
Agreement and the Registration Rights Agreement (as that term is defined in the
Series B Certificate of Designation), the Stock Purchase Agreement, Registration
Rights Agreement (as that term is defined in the Stock Purchase
58
65
Agreement), the Series A Certificate of Designation, the Series B Certificate of
Designation, the Series C Certificate of Designation, the FaciliCom Acquisition
and the related Agreement and Plan of Merger dated as of August 17, 1999 and the
related registration rights agreement as defined in such Agreement and Plan of
Merger and to the performance by the Parent of all of its obligations
thereunder. Nothing contained in this Section however shall be construed to
permit the Parent to redeem the outstanding shares of Series A Preferred or the
Series B Preferred or the Series C Preferred pursuant to Section 5 of the Series
A Certificate of Designation or the Series B Certificate of Designation or the
Series C Certificate of Designation, or to issue Subordinated Notes pursuant to
Section 10 of the Series A Certificate of Designation.
7.07. Merger; Consolidation. The Borrower shall not, and shall not
permit the Parent or any of the Restricted Subsidiaries to, merge into or
consolidate with any Person; provided that any Restricted Subsidiary may be
merged or consolidated with or into any other Restricted Subsidiary or with or
into the Borrower (so long as the Borrower shall be continuing or surviving
corporation).
7.08. Business. The Borrower shall not, and shall not permit the
Parent or any of the other Restricted Subsidiaries to, change the nature of its
business as now conducted. The Borrower shall not conduct any business except
the ownership and operation of telecommunications equipment manufacturing, long
distance, and long-haul carrier businesses. WA Telecom Products Co, Inc. shall
not conduct any business except the ownership of Capital Stock of World Access
Holdings, Inc. World Access, Inc. shall not conduct any business except the
ownership of Capital Stock of WA Telecom Products Co., Inc. and Telco Systems,
Inc.
7.09. Transactions with Affiliates. The Borrower shall not, and
shall not permit the Parent or any of the Restricted Subsidiaries to, enter into
or be party to a transaction with any Affiliate, except on terms no less
favorable than could be obtained on an arms'-length basis with a Person that is
not an Affiliate.
7.10. Loans and Investments. The Borrower shall not, and shall not
permit the Parent or any of the Restricted Subsidiaries to, make any loan,
advance, extension of credit or capital contribution to, or make or have any
Investment in, any Person, or make any commitment to make any such extension of
credit or Investment, or make any acquisition, except (a) Investments in Cash
Equivalents, (b) Permitted Acquisitions, (c) provided no Default or Event of
Default exists or would result therefrom, Investments in Restricted Subsidiaries
that have executed or will execute Loan Papers required by the Administrative
Agent, and (d) provided no Default or Event of Default exists or would result
therefrom, and with respect to Unrestricted Subsidiaries for which (i) 100% of
the Capital Stock of such Unrestricted Subsidiary has not been pledged as
Collateral to secure this Agreement and (ii) an opinion of counsel in a form
satisfactory to Administrative Agent with respect to the pledge of such
Collateral has not been delivered to Administrative Agent, Investments of up to
$1,000,000 in any Unrestricted Subsidiary individually and of up to $5,000,000
in the aggregate in all Unrestricted Subsidiaries, (e) provided no Default or
Event of Default exists or would result therefrom, Investments of not more than
$5,000,000 individually or $25,000,000 in the aggregate (not including any
Investments pursuant to the World Access Charitable Trust Transaction) in
59
66
companies in similar lines of business to those of the Borrower, the Parent or
the Restricted Subsidiaries, (f) Investments in Omnia Communications, Inc. and
any successor thereto, (g) any Investments pursuant to the World Access
Charitable Trust Transaction, (h) other acquisitions described on Schedule 7.10
hereof and (i) Investments up to $30,000,000 in the aggregate over the term of
this Agreement in the FaciliCom Unrestricted Subsidiaries.
7.11. Fiscal Year and Accounting Method. The Borrower shall not, and
shall not permit the Parent or any of the Restricted Subsidiaries to, change its
fiscal year or method of accounting, except as may be required by GAAP.
7.12. Issuance of Partnership Interest and Capital Stock; Amendment
of Articles and ByLaws. Except in connection with the transactions consummated
on or prior to the Closing Date, the Borrower shall not, and shall not permit WA
Telecom Products, Inc. or any of the Restricted Subsidiaries to, issue, sell or
otherwise dispose of any Capital Stock in such Person, or any options or rights
to acquire such partnership interest or capital stock not issued and outstanding
on the Closing Date. The Borrower shall not amend its articles of organization
or bylaws and the Borrower shall not permit the Parent or any of the other
Restricted Subsidiaries to amend its articles of organization or bylaws or
partnership agreement, as applicable, except, so long as there exists no Default
or Event of Default both prior to and after giving effect to such amendment, and
after written notice to the Administrative Agent, the Borrower, the Parent, or
any of the other Restricted Subsidiaries may make (i) changes to comply with
applicable Law and (ii) changes which would not result in a Material Adverse
Change.
7.13. Change of Ownership. The Borrower shall not, and shall not
permit the Borrower or any Restricted Subsidiary to, permit any change in the
ownership of the Borrower and each Guarantor (other than World Access, Inc.)
from the ownership thereof as of the date hereof as disclosed on Schedule 5.01
hereto other than a transfer to the Borrower or any other Restricted Subsidiary
in which the Borrower or such Restricted Subsidiary is the surviving entity.
7.14. Sale and Leaseback. Other than a transaction with respect to
the Borrower's real property located at Provo, Utah, the Borrower shall not, and
shall not permit any of the Parent, or the Restricted Subsidiaries to, enter
into any arrangement whereby it sells or transfers any of its assets, and
thereafter rents or leases such assets.
7.15. Compliance with ERISA. The Borrower shall not, and shall not
permit the Parent or any Subsidiary of the Borrower or the Parent to, directly
or indirectly, or permit any member of such Person's Controlled Group to
directly or indirectly, (a) terminate any Plan so as to result in any material
(in the opinion of Administrative Agent) liability to any of the Borrower, the
Parent or any Subsidiary of the Borrower or the Parent, or any member of their
Controlled Group, (b) permit to exist any ERISA Event, or any other event or
condition, which presents the risk of any material (in the opinion of
Administrative Agent) liability of any of the Parent, the Borrower or any
Subsidiary of the Parent or the Borrower, or any member of their Controlled
Group, (c) make a complete or partial withdrawal (within the meaning of Section
4201 of ERISA) from any Multiemployer Plan
60
67
so as to result in any material (in the opinion of Administrative Agent)
liability to any of the Borrower, the Parent or any Subsidiary of the Parent or
the Borrower, or any member of their Controlled Group, (d) enter into any new
Plan or modify any existing Plan so as to increase its obligations thereunder
(except in the ordinary course of business consistent with past practice) which
could result in any material (in the opinion of Administrative Agent) liability
to any of the Parent, the Borrower or any Subsidiary of the Parent or the
Borrower, or any member of their Controlled Group, or (e) permit the present
value of all benefit liabilities, as defined in Title IV of ERISA, under each
Plan of each of the Parent, the Borrower or any Subsidiary of the Parent or the
Borrower, or any member of their Controlled Group (using the actuarial
assumptions utilized by the PBGC upon termination of a Plan) to materially (in
the opinion of Administrative Agent) exceed the fair market value of Plan assets
allocable to such benefits all determined as of the most recent valuation date
for each such Plan.
7.16. Rate Swap Exposure. The Borrower shall not enter into or
become liable in respect of any Interest Hedge Agreement pursuant to which the
aggregate amount subject to such Interest Hedge Agreements exceeds the aggregate
principal amount of all Advances.
7.17. Restricted Subsidiaries and Other Obligors. The Borrower shall
not permit the Parent or any of its Restricted Subsidiaries to violate any
provision of this Article VII.
7.18. Limitation on Restrictive Agreements. The Borrower shall not,
and shall not permit the Parent or any Restricted Subsidiary to, other than in
connection with the Subordinated Notes and the FaciliCom Notes, or the World
Access Charitable Trust Transaction, enter into any indenture, agreement,
instrument, financing document or other arrangement which, directly or
indirectly, prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon: (a) the incurrence
of Debt, (b) the granting of Liens, (c) the making or granting of Guarantees,
(d) the payment of dividends or Distributions, (e) the purchase, redemption or
retirement of any Capital Stock, (f) the making of loans or advances, (g)
transfers or sales of property or assets (including Capital Stock) by the
Parent, the Borrower or any of the Restricted Subsidiaries, or (h) the making of
Investments or acquisitions.
7.19. Amendment of Material Agreements. The Borrower and the Parent
shall not, and shall not permit any Restricted Subsidiary to, amend, waive or
consent to any deviation from any provision of any documentation or agreements
of the (i) World Access Indenture in any manner that is both material and
adverse to the interests of the Lenders, (ii) Subordinated Notes in any manner
that is both material and adverse to the interests of the Lenders, (iii)
FaciliCom Indenture in any manner that is both material and adverse to the
interests of the Lenders, (iv) Series A Certificate of Designation in any manner
that is both material and adverse to the interests of the Lenders, (v) Series B
Certificate of Designation in any manner that is both material and adverse to
the interests of the Lenders, (vi) Series C Certificate of Designation in any
manner that is both material and adverse to the interests of the Lenders, (vii)
FaciliCom Notes in any manner that is both material and adverse to the interests
of the Lenders, (viii) Exchange Indenture in any manner that is both material
61
68
and adverse to the interests of the Lenders, or (vii) Exchange Notes in any
manner that is both material and adverse to the interests of the Lenders.
ARTICLE VIII. EVENTS OF DEFAULT
8.01. Events of Default. Any one or more of the following shall be
an "Event of Default" hereunder, if the same shall occur for any reason
whatsoever, whether voluntary or involuntary, by operation of Law or otherwise:
(a) The Borrower shall fail to pay (i) any principal on any Note
when due; or (ii) any interest on any Note within three days after the same
becomes due; or (iii) any Commitment Fees, other fees, or other amounts payable
under any Loan Paper within five days after the same becomes due;
(b) Any representation or warranty made or deemed made by the
Borrower, the Parent or any Restricted Subsidiary (or any of its officers or
representatives) under or in connection with any Loan Papers shall prove to have
been incorrect or misleading in any material respect when made or deemed made;
(c) The Borrower, the Parent or any Restricted Subsidiary shall
fail to perform or observe any term or condition contained in Article VI hereof
(except Section 6.05(f) hereof) which is not remedied within thirty days after
the earlier of (i) actual knowledge of such breach by the Parent, the Borrower
or any of the Restricted Subsidiaries of such breach and (ii) written notice
from the Administrative Agent or any Lender of such breach;
(d) The Borrower, the Parent or any Restricted Subsidiary shall
fail to perform or observe any term or covenant contained in Article VII hereof
or in Section 6.05(f) hereof;
(e) The Borrower, the Parent or any Restricted Subsidiary shall
fail to perform or observe any other term or covenant contained in any Loan
Paper, other than those described in Sections 8.01(a), (b), (c) and (d) hereof
which is not remedied within thirty days after the earlier of (i) actual
knowledge of such breach by the Borrower, the Parent or any of the Restricted
Subsidiaries of such breach and (ii) written notice from Administrative Agent or
any Lender of such breach;
(f) (i) Any Loan Paper or material provision thereof shall, for
any reason, not be valid and binding on the Borrower, the Parent or any
Restricted Subsidiary signatory thereto, or not be in full force and effect, or
shall be declared to be null and void; (ii) the validity or enforceability of
any Loan Paper shall be contested by the Borrower, the Parent, or any Restricted
Subsidiary; (iii) the Borrower, the Parent or any Restricted Subsidiary shall
deny that it has any or further liability or obligation under its respective
Loan Papers; or(iv) any default or breach under any provision of any Loan Papers
shall continue after the applicable grace period, if any, specified in such Loan
Paper;
62
69
(g) Any of the following shall occur: (i) any of the Parent, the
Borrower or any Subsidiary of the Parent or the Borrower shall make an
assignment for the benefit of creditors or be unable to pay its debts generally
as they become due; (ii) any of the Parent, the Borrower or any Subsidiary of
the Parent or the Borrower shall petition or apply to any Tribunal for the
appointment of a trustee, receiver or liquidator of it or of any substantial
part of its assets, or shall commence any proceedings relating to any of the
Parent, the Borrower or any Subsidiary of the Parent or the Borrower under any
Debtor Relief Law, whether now or hereafter in effect; (iii) any such petition
or application shall be filed, or any such proceedings shall be commenced,
against any of the Parent, the Borrower or any Subsidiary of the Parent or the
Borrower, or an order, judgment or decree shall be entered appointing any such
trustee, receiver or liquidator, or approving the petition in any such
proceedings and such petition, application or proceedings shall continue
undismissed for 30 days or such order, judgment or decree shall continue
unstayed and in effect for 30 days; (iv) any final order, judgment or decree
shall be entered in any proceedings against any of the Parent, the Borrower or
any Subsidiary of the Parent or the Borrower decreeing its dissolution; (v) any
final order, judgment or decree shall be entered in any proceedings against any
of the Parent, the Borrower or any Subsidiary of the Parent or the Borrower
decreeing its split-up which requires the divestiture of a substantial part of
its assets; or (vi) any of the Parent, the Borrower or any Subsidiary of the
Parent or the Borrower shall petition or apply to any Tribunal for the
appointment of a trustee, receiver or liquidator of it or of any substantial
part of its assets, or shall commence any proceedings relating to any of the
Parent, the Borrower or any Subsidiary of the Parent or the Borrower under any
Debtor Relief Law, whether now or hereafter in effect;
(h) (i) Any of the Borrower, the Parent or any Restricted
Subsidiary shall fail to pay any Debt or Contingent Liability of $5,000,000 or
more when due (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 Contingent Liability; (ii) any of the Borrower, the Parent or any Restricted
Subsidiary shall fail to perform or observe any term or covenant contained in
any agreement or instrument relating to any such Debt or Contingent Liability,
when required to be performed or observed, and such failure shall continue after
the applicable grace period, if any, specified in such agreement or instrument,
and can result in acceleration of the maturity of such Debt or Contingent
Liability; or (iii) any such Debt or Contingent Liability shall be declared to
be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof;
(i) Any of the Borrower, the Parent or Restricted Subsidiary shall
have any judgment(s) outstanding against it for the payment of $5,000,000 or
more, and such judgment(s) shall remain unstayed, in effect, uncontested and
unpaid for a period of 30 days;
(j) (i) Any Authorization necessary for the ownership or essential
for the operation of any of the interstate or intrastate telecommunications
systems or networks operated by the Parent, the Borrower or any Restricted
Subsidiary shall expire, and on or prior to such expiration, the same shall not
have been renewed or replaced by another Authorization authorizing substantially
the same operations; (ii) any Authorization necessary for the ownership or
essential for the operation of any
63
70
of the Parent's, the Borrower's or the Restricted Subsidiaries' businesses shall
be canceled, revoked, terminated, rescinded, annulled, suspended or modified in
a materially adverse respect, or shall no longer be in full force and effect, or
the grant or the effectiveness thereof shall have been stayed, vacated, reversed
or set aside, and such action shall be no longer subject to further
administrative or judicial review; (iii) the FCC shall have issued, on its own
initiative and not upon the complaint of or at the request of a third party, any
hearing designation order in any non-comparative license renewal proceeding or
any license revocation proceeding involving any License or Authorization
necessary for the ownership or essential for the operation of the Borrower's,
the Parent's or the Restricted Subsidiaries' businesses, or (iv) in any
non-comparative license renewal proceeding or license revocation proceeding
initiated by the FCC upon the complaint of or at the request of a third party or
any comparative (i.e., multiple applicant) license renewal proceeding, in each
case involving any License or Authorization necessary for the ownership or
essential for the operation of such business; or (v) any administrative law
judge of the FCC (or successor to the functions of an administrative law judge
of the FCC) shall have issued an initial decision to the effect that the Parent,
the Borrower or any Restricted Subsidiary lacks the basic qualifications to own
or operate its business or is not deserving of a renewal expectancy, and such
initial decision shall not have been timely appealed or shall otherwise have
become an order that is final and no longer subject to further administrative or
judicial review;
(k) Any of the Parent, the Borrower or any Subsidiary of the
Parent or the Borrower or any ERISA Affiliate shall have committed a failure
described in Section 302(f)(l) of ERISA, and the amount determined under Section
302(f)(3) of ERISA is equal to or greater than $5,000,000;
(l) The Parent, the Borrower, any Subsidiary of the Parent or the
Borrower, or any ERISA Affiliate, shall have been notified by the sponsor of a
Multiemployer Plan that such Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result thereof, the aggregate
annual contributions to all Multiemployer Plans in reorganization or being
terminated is increased over the amounts contributed to such Plans for the
preceding Plan year by an amount exceeding $5,000,000;
(m) The Borrower, the Parent or any Restricted Subsidiary shall be
required under any Environmental Law (i) to implement any remedial,
neutralization or stabilization process or program, the cost of which could
constitute a Material Adverse Change, or (ii) to pay any penalty, fine or
damages in an aggregate amount of $5,000,000 or more;
(n) (i) Any Property (whether leased or owned) of any of the
Borrower, the Parent or any Restricted Subsidiary, or the operations conducted
thereon by any of them or any current or prior owner or operator thereof (in the
case of real Property), shall violate or have violated any applicable
Environmental Law, if such violation could constitute a Material Adverse Change;
or (ii) any of the Borrower, the Parent, or any Restricted Subsidiary shall not
obtain or maintain any License required to be obtained or filed under any
Environmental Law in connection with the use of such Property and assets,
including, without limitation, past or present treatment, storage, disposal or
release of
64
71
Hazardous Materials into the environment, if the failure to obtain or maintain
the same could constitute a Material Adverse Change;
(o) Any Collateral Document shall for any reason (other than
pursuant to the terms thereof) cease to create a valid and perfected first
priority Lien in the Collateral (subject to Permitted Liens) purported to be
covered thereby, and the value of such Collateral, singly or in the aggregate,
equals or exceeds $5,000,000;
(p) The occurrence of any Change of Control;
(q) (i) A petition or complaint is filed before or by the Federal
Trade Commission, the United States Justice Department, or any other Tribunal,
seeking to cause the Borrower, the Parent or any Restricted Subsidiary to divest
a significant portion of its assets or the Capital Stock of any of the Parent,
the Borrower or any Restricted Subsidiary pursuant to any antitrust, restraint
of trade, unfair competition or similar Laws, and such petition or complaint is
not dismissed or discharged within 60 days of the filing thereof, which such
divestiture could reasonably be expected to cause a Material Adverse Change, or
(ii) a warrant of attachment or execution or similar process shall be issued or
levied against Property of the Parent, the Borrower or any Restricted Subsidiary
which, together with all other such Property of the Borrower, the Parent and the
Restricted Subsidiaries subject to other such process, exceeds in the aggregate
$5,000,000 in value, and if such judgment or award is not insured or, within 60
days after the entry, issue or levy thereof, such judgment, warrant or process
shall not have been paid or discharged, bonded or stayed pending appeal, or if,
after the expiration of any such stay, such judgment, warrant or process shall
not have been paid or discharged;
(r) (i) Any civil action, suit or proceeding shall be commenced
against any of the Borrower, the Parent or any Restricted Subsidiary under any
federal or state racketeering statute (including, without limitation, the
Racketeer Influenced and Corrupt Organization Act of 1970)("RICO"), and such
suit shall be adversely determined by a court of applicable jurisdiction
resulting in a judgment against the Borrower, the Parent or any Restricted
Subsidiary in excess of $5,000,000; or (ii) any criminal action or proceeding
shall be commenced against any of the Borrower, the Parent or any Restricted
Subsidiary under any federal or state racketeering statute (including, without
limitation, RICO);
(s) There shall exist any Event of Default relating to the
Subordinated Notes, the FaciliCom Notes, under the World Access Indenture or the
FaciliCom Indenture; or
(t) Any of the Parent, the Borrower or any of their Subsidiaries
shall fail to be Year 2000 Compliant.
8.02. Remedies Upon Default. If an Event of Default described in
Section 8.01(g) hereof shall occur with respect to the Parent, the Borrower or
any Subsidiary of the Parent or the Borrower, the Available Commitment shall be
immediately terminated and the aggregate unpaid principal
65
72
balance of and accrued interest on all Advances shall, to the extent permitted
by applicable Law, thereupon become due and payable concurrently therewith,
without any action by Administrative Agent or any Lender, and without diligence,
presentment, demand, protest, notice of protest or intent to accelerate, or
notice of any other kind, all of which are hereby expressly waived. Subject to
the immediately foregoing sentence, if any Event of Default shall occur and be
continuing, then no LIBOR Advances shall be available to the Borrower, and
Administrative Agent may at its election, and shall at the direction of Majority
Lenders, do any one or more of the following:
(a) Declare the entire unpaid balance of all Advances immediately
due and payable, whereupon it shall be due and payable without diligence,
presentment, demand, protest, notice of protest or intent to accelerate or
notice of any other kind (except notices specifically provided for under Section
8.01), all of which are hereby expressly waived (except to the extent waiver of
the foregoing is not permitted by applicable Law);
(b) Terminate the Available Commitment;
(c) Reduce any claim of Administrative Agent and Lenders to
judgment; or
(d) Exercise any Rights afforded under any Loan Papers or by Law,
including, without limitation to the UCC, in equity or otherwise.
8.03. Cumulative Rights. All Rights available to Administrative
Agent and Lenders under the Loan Papers shall be cumulative of and in addition
to all other Rights granted thereto at Law or in equity, whether or not amounts
owing thereunder shall be due and payable and whether or not Administrative
Agent or any Lender shall have instituted any suit for collection or other
action in connection with the Loan Papers.
8.04. Waivers. The acceptance by Administrative Agent or any Lender
at any time and from time to time of partial payment of any amount owing under
any Loan Papers shall not be deemed to be a waiver of any Default or Event of
Default then existing. No waiver by Administrative Agent or any Lender of any
Default or Event of Default shall be deemed to be a waiver of any Default or
Event of Default other than such Default or Event of Default. No delay or
omission by Administrative Agent or any Lender in exercising any Right under the
Loan Papers shall impair such Right or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such Right
preclude other or further exercise thereof or the exercise of any other Right
under the Loan Papers or otherwise.
8.05. Performance by Administrative Agent or any Lender. Should any
covenant of any of the Borrower, the Parent or the Restricted Subsidiaries fail
to be performed in accordance with the terms of the Loan Papers, Administrative
Agent may, at its option, perform or attempt to perform such covenant on behalf
of such Person. Notwithstanding the foregoing, it is expressly understood that
neither Administrative Agent nor any Lender assumes, and neither shall ever
have, except by express written consent of Administrative Agent or such Lender,
any liability or responsibility for
66
73
the performance of any duties or covenants of any of the Borrower, the Parent or
the Restricted Subsidiaries.
8.06. Expenditures. The Borrower shall reimburse Administrative
Agent and each Lender for any sums spent by it in connection with the exercise
of any Right provided herein. Such sums shall bear interest at the lesser of (a)
the Base Rate in effect from time to time, plus 2.0%, and (b) the Highest Lawful
Rate, from the date spent until the date of repayment by the Borrower.
8.07. Control. None of the covenants or other provisions contained
in this Agreement shall, or shall be deemed to, give Administrative Agent or any
Lender any Rights to exercise control over the affairs and/or management of any
of the Borrower, the Parent or the Restricted Subsidiaries, the power of
Administrative Agent and each Lender being limited to the Rights to exercise the
remedies provided in this Article; provided, however, that if Administrative
Agent or any Lender becomes the owner of any partnership, stock or other equity
interest in any Person, whether through foreclosure or otherwise, it shall be
entitled to exercise such legal Rights as it may have by being an owner of such
stock or other equity interest in such Person.
ARTICLE IX. THE ADMINISTRATIVE AGENT
9.01. Authorization and Action. Each Lender hereby appoints and
authorizes Administrative Agent to take such action as Administrative Agent
deems appropriate on its behalf and to exercise such powers under this Agreement
and the other Loan Papers as are delegated to the Administrative Agent by the
terms of the Loan Papers, together with such powers as are reasonably incidental
thereto. As to any matters not expressly provided for by this Agreement and the
other Loan Papers (including, without limitation, enforcement or collection of
the Notes), 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 Majority Lenders (or all Lenders, if required under
Section 10.01), and such instructions shall be binding upon all Lenders;
provided, however, that Administrative Agent shall not be required to take any
action which exposes Administrative Agent to personal liability or which is
contrary to any Loan Papers or applicable Law. Administrative Agent agrees to
give to each Lender notice of each notice given to it by the Borrower pursuant
to the terms of this Agreement and to distribute to each applicable Lender in
like funds all amounts delivered to Administrative Agent by the Borrower for the
Ratable or individual account of any Lender.
9.02. Administrative Agent's Reliance, Etc. Neither Administrative
Agent, nor any of its directors, officers, agents, employees, or representatives
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or any other Loan Paper, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Administrative Agent (a) may treat the payee of any
Note as the holder thereof until Administrative Agent receives written notice of
the assignment or transfer thereof signed by such payee and in form satisfactory
to Administrative Agent; (b) may consult with legal counsel (including counsel
for the Borrower or any of the Restricted Subsidiaries), independent
67
74
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; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Papers; (d) shall not have any duty to ascertain or
to inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or any other Loan Papers on the part of the
Borrower, the Parent or the Restricted Subsidiaries or to inspect the Property
(including the books and records) of the Borrower, the Parent or the Restricted
Subsidiaries; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement, any other Loan Papers, or any other instrument or document furnished
pursuant hereto; and (f) shall incur no liability under or in respect of this
Agreement or any other Loan Papers by acting upon any notice, consent,
certificate or other instrument or writing believed by it to be genuine and
signed or sent by the proper party or parties.
9.03. Bank of America, N. A. and Affiliates. With respect to its
Available Commitment, its Advances, its Specified Percentage and any Loan
Papers, Bank of America, N. A. has the same Rights under this Agreement as any
other Lender and may exercise the same as though it were not Administrative
Agent. Bank of America, N. A. and its Affiliates may accept deposits from, lend
money to and generally engage in any kind of business with, any of the Borrower,
the Parent or the Restricted Subsidiary, any Affiliate thereof, and any Person
who may do business therewith, all as if Bank of America, N. A. were not
Administrative Agent and without any duty to account therefor to any Lender.
9.04. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on the financial statements referred to in Section 5.04 hereof
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
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 and the
other Loan Papers.
9.05. Indemnification by Lenders. Lenders shall indemnify
Administrative Agent, Ratable, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against Administrative Agent in any way relating to
or arising out of any Loan Papers or any action taken or omitted by
Administrative Agent thereunder, including any negligence of Administrative
Agent; provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements resulting from Administrative Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, Lenders
shall reimburse Administrative Agent, Ratable, promptly upon demand for any
out-of-pocket expenses (including reasonable attorneys'
68
75
fees) incurred by Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiation, legal proceedings or otherwise) of, or legal and
other advice in respect of rights or responsibilities under, the Loan Papers.
The indemnity provided in this Section 9.05 shall survive the termination of
this Agreement.
9.06. Successor Administrative Agent. Administrative Agent may
resign at any time by giving written notice thereof to Lenders and the Borrower,
and may be removed at any time with or without cause by the action of all
Lenders (other than Administrative Agent, if it is a Lender). Upon any such
resignation, Majority Lenders shall have the right to appoint a successor
Administrative Agent. If no successor Administrative Agent shall have been so
appointed and shall have accepted such appointment within thirty days after the
retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank organized under the Laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $50,000,000. 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 and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Papers, provided that if the retiring or removed
Administrative Agent is unable to appoint a successor Administrative Agent,
Administrative Agent shall, after the expiration of a sixty day period from the
date of notice, be relieved of all obligations as Administrative Agent
hereunder. Notwithstanding any Administrative Agent's resignation or removal
hereunder, the provisions of this Article IX shall continue to 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 X. MISCELLANEOUS
10.01. Amendments and Waivers. No amendment or waiver of any
provision of this Agreement, or any other Loan Papers, nor consent to any
departure by the Borrower, the Parent or the Restricted Subsidiaries therefrom,
shall be effective unless the same shall be in writing and signed by
Administrative Agent with the consent of Majority Lenders, and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall (and the result of action or failure to take action shall not),
unless in writing and signed by all of Lenders and Administrative Agent, (a)
increase the Available Commitment or the Letter of Credit Commitment, (b) reduce
any principal, interest, fees or other amounts payable hereunder, or waive or
result in the waiver of any Event of Default under Section 8.01(a) hereof, or
change the pro rata sharing of payments, (c) postpone any date fixed for any
payment of principal, interest, fees or other amounts payable hereunder, (d)
release any Collateral or Guaranties securing any Person's obligations
hereunder, other than releases specifically contemplated hereby and by the Loan
Papers, including, without limitation, releases of assets that have been sold or
transferred as specifically permitted hereby or by the Loan Papers, or (e)
change the meaning of Specified Percentage or the number of Lenders required to
take
69
76
any action hereunder. No amendment, waiver or consent shall affect the Rights or
duties of Administrative Agent under any Loan Papers, unless it is in writing
and signed by Administrative Agent in addition to the requisite number of
Lenders.
10.02. Notices.
(a) Manner of Delivery. All notices communications and other
materials to be given or delivered under the Loan Papers shall, except in those
cases where giving notice by telephone is expressly permitted, be given or
delivered in writing. All written notices, communications and materials shall be
sent by registered or certified mail, postage prepaid, return receipt requested,
by telecopier or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Agent, any Lender or the Borrower has acted in reliance on such
telephonic notice.
(b) Addresses. All notices, communications and materials to be
given or delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
If to the Borrower:
c/o World Access, Inc.
2240 Resurgens Plaza
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Treasurer
Telephone No.: (▇▇▇)▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇)▇▇▇-▇▇▇▇
With a Copy to:
Long ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Suite 5300
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: H. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
70
77
If to Administrative Agent:
Bank of America, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a Copy to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
3400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender, to its address set forth below opposite its signature or on
any Assignment and Acceptance or amendment to this Agreement or at such other
address or, telecopier or telephone number or to the attention of such other
individual or department as the party to which such information pertains may
hereafter specify for the purpose in a notice to the other specifically
captioned "Notice of Change of Address".
(d) Effectiveness. Each notice, communication and any material to
be given or delivered to any party pursuant to this Agreement shall be effective
or deemed delivered or furnished (i) if sent by mail, on the fifth Business Day
after such notice, communication or material is deposited in the mail, addressed
as above provided, (ii) if sent by telecopier, when such notice, communication
or material is transmitted to the appropriate number determined as above
provided in this Section 10.02 and the appropriate receipt is received or
otherwise acknowledged, (iii) if sent by hand delivery or overnight courier,
when left at the address of the addressee addressed as above provided, and (iv)
if given by telephone, when communicated to the individual or any member of the
department specified as the individual or department to whose attention notices,
communications and materials are to be given or delivered except that notices of
a change of address, telecopier or telephone number or individual or department
to whose attention notices, communications and materials are to be given or
delivered shall not be effective until received; provided, however, that notices
to Administrative Agent pursuant to Article II shall be effective when received.
The Borrower agrees that Administrative Agent shall have no duty or obligation
to verify or otherwise confirm telephonic notices given pursuant to Article II
and agrees to indemnify and hold harmless Administrative Agent
71
78
and Lenders for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs and expenses resulting,
directly or indirectly, from acting upon any such notice.
10.03. Parties in Interest. All covenants and agreements contained in
this Agreement and all other Loan Papers shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto. Each Lender may
from time to time assign or transfer its interests hereunder pursuant to Section
10.04 hereof. Neither the Borrower, the Parent or any Restricted Subsidiary may
assign or transfer its Rights or obligations under any Loan Paper without the
prior written consent of Administrative Agent.
10.04. Assignments and Participations.
(a) Subject to the following sentence, each Lender (an "Assignor")
may assign its Rights and obligations as a Lender under the Loan Papers to one
or more Eligible Assignees pursuant to an Assignment and Acceptance, so long as
(i) each assignment shall be of a constant, and not a varying, percentage of all
Rights and obligations thereunder, (ii) each Assignor shall obtain in each case
the prior written consent of Administrative Agent (and, so long as the Bond
Letter of Credit is outstanding and issued by Bank Austria AG, the prior written
consent of Bank Austria Creditanstalt Corporate Finance, Inc.), which consent
shall not be unreasonably withheld, (iii) each Assignor shall in each case pay a
$3,500 processing fee to Administrative Agent, and (iv) no such assignment is
for an amount less than the lesser of the total amount of the Available
Commitment or $5,000,000. Within five Business Days after Administrative Agent
receives notice of any such assignment, the Borrower shall execute and deliver
to Administrative Agent, in exchange for the Notes issued to Assignor, new Notes
to the order of such Assignor and its assignee in amounts equal to their
respective Specified Percentages of the Available Commitment. Such new Notes
shall be dated the effective date of the assignment. It is specifically
acknowledged and agreed that on and after the effective date of each assignment,
the assignee shall be a party hereto and shall have the Rights and obligations
of a Lender under the Loan Papers.
(b) Each Lender may sell participations to one or more Persons in
all or any of its Rights and obligations under the Loan Papers; provided,
however, that (i) such Lender's obligations under the Loan Papers 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 its Notes for all purposes of the Loan Papers, (iv) the
participant shall be granted the Right to vote on or consent to only those
matters described in Sections 10.01(a), (b), (c) and (d), (v) each of the
Borrower, the Parent, Restricted Subsidiaries, Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with its Rights and obligations under the Loan Papers, and (vi) no
such participation is for an amount less than the lesser of the total amount of
the Available Commitment or $5,000,000.
72
79
(c) Any Lender may, in connection with any assignment or
participation, or proposed assignment or participation, disclose to the assignee
or participant, or proposed assignee or participant, any information relating to
the Borrower, the Parent or any Restricted Subsidiary furnished to such Lender
by or on behalf of any of the Borrower, the Parent or any Restricted Subsidiary.
(d) Notwithstanding any other provision set forth in this
Agreement, each 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 or Notes 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.
10.05. Sharing of Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any Right of set-off,
or otherwise) on account of its Advances in excess of its Ratable share of
payments made by the Borrower, such Lender shall forthwith purchase
participations in Advances made by the other Lenders as shall be necessary to
share the excess payment Ratable with each of them; provided, however, that if
any of such excess payment is thereafter recovered from the purchasing Lender,
its purchase from each Lender shall be rescinded and each Lender shall repay the
purchase price to the extent of such recovery together with a Ratable share 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 Lender so
purchasing a participation from another Lender pursuant to this Section 10.05
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.
10.06. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by Law, to set-off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of the Borrower against any and all
of the obligations of the Borrower now or hereafter existing under this
Agreement and the other Loan Papers, whether or not Administrative Agent or any
Lender shall have made any demand under this Agreement or the other Loan Papers,
and even if such obligations are unmatured. Each Lender shall promptly notify
the Borrower 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 under this Section 10.06 are in addition
to other Rights (including, without limitation, other Rights of set-off) which
such Lender may have.
10.07. Costs, Expenses, and Taxes.
(a) The Borrower agrees to pay on demand (i) all costs and
expenses of Administrative Agent and the Issuing Bank (with respect solely to
the Letters of Credit issued by it) in connection with the preparation and
negotiation of all Loan Papers, including, without limitation, the reasonable
73
80
fees and out-of-pocket expenses of Special Counsel and (ii) all costs and
expenses (including reasonable attorneys' fees and expenses) of Administrative
Agent and each Lender in connection with administration, interpretation,
modification, amendment, waiver, or release of any Loan Papers and any
restructuring, work-out or collection of any portion of the Obligations or the
enforcement of any Loan Papers.
(b) In addition, the Borrower shall pay any and all stamp, debt
and other Taxes payable or determined to be payable in connection with any
payment hereunder (other than Taxes on the overall net income of Administrative
Agent or any Lender or franchise Taxes or Taxes on capital or capital receipts
of Administrative Agent or any Lender), or the execution, delivery or
recordation of any Loan Papers, and agrees to save Administrative Agent and each
Lender harmless from and against any and all liabilities with respect to, or
resulting from, any delay in paying or omission to pay any Taxes in accordance
with this Section 10.07, including any penalty, interest and expenses relating
thereto. All payments by the Borrower or any Restricted Subsidiary under any
Loan Papers shall be made free and clear of and without deduction for any
present or future Taxes (other than Taxes on the overall net income of
Administrative Agent or any Lender of any nature now or hereafter existing,
levied or withheld, or franchise Taxes or Taxes on capital or capital receipts
of Administrative Agent or any Lender), including all interest, penalties or
similar liabilities relating thereto. If the Borrower shall be required by Law
to deduct or to withhold any Taxes from or in respect of any amount payable
hereunder, (i) the amount so payable shall be increased to the extent necessary
so that, after making all required deductions and withholdings (including Taxes
on amounts payable to Administrative Agent or any Lender pursuant to this
sentence), Administrative Agent or any Lender receives an amount equal to the
sum it would have received had no such deductions or withholdings been made,
(ii) the Borrower shall make such deductions or withholdings, and (iii) the
Borrower shall pay the full amount deducted or withheld to the relevant taxing
authority in accordance with applicable Law. Without prejudice to the survival
of any other agreement of the Borrower hereunder, the agreements and obligations
of the Borrower contained in this Section 10.07 shall survive the execution of
this Agreement, termination of the Available Commitment, repayment of the
Obligations, satisfaction of each agreement securing or assuring the Obligations
and termination of this Agreement and each other Loan Paper.
10.08. Indemnification by the Borrower. The Borrower shall indemnify,
defend and hold harmless Administrative Agent, each Lender and their respective
Affiliates, directors, officers, agents, employees and representatives, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements of any kind
or nature whatsoever which may be imposed on, incurred by or asserted against
any of them in any way relating to or arising out of any Loan Papers (including
in connection with or as a result, in whole or in part, of the negligence of any
of them), any transaction related hereto or thereto, or any act, omission or
transaction of the Borrower, the Parent or any Restricted Subsidiary and their
respective Affiliates, or any of their directors, partners, officers, agents,
employees or representatives; provided, however, that neither Administrative
Agent nor any Lender shall be indemnified, defended and held harmless pursuant
to this Section 10.08 to the extent of any losses
74
81
or damages which the Borrower proves were caused by the indemnified party's
willful misconduct or gross negligence.
10.09. Rate Provision. It is not the intention of any party to any
Loan Papers to make an agreement violative of the Laws of any applicable
jurisdiction relating to usury. In no event shall the Borrower or any other
Person be obligated to pay any amount in excess of the Maximum Amount. If
Administrative Agent or any Lender ever receives, collects or applies, as
interest, any such excess, such amount which would be excessive interest shall
be deemed a partial repayment of principal and treated hereunder as such, and if
principal is paid in full, any remaining excess shall be paid to the Borrower or
the other Person entitled thereto. In determining whether or not the interest
paid or payable, under any specific contingency, exceeds the Maximum Amount,
each of the Borrower, the Parent or any Restricted Subsidiary, Administrative
Agent and each Lender shall, to the maximum extent permitted under Applicable
Law, (a) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest, (b) exclude voluntary prepayments and the effect
thereof, and (c) amortize, prorate, allocate and spread in equal parts, the
total amount of interest throughout the entire contemplated term of the
Obligations so that the interest rate is uniform throughout the entire term of
the Obligations; provided that if the Obligations are paid and performed in full
prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Amount,
Administrative Agent or Lenders, as appropriate, shall refund to the Borrower
the amount of such excess or credit the amount of such excess against the total
principal amount owing, and, in such event, neither Administrative Agent nor any
Lender shall be subject to any penalties provided by any Laws for contracting
for, charging or receiving interest in excess of the Maximum Amount. This
Section 10.09 shall control every other provision of all agreements among the
parties to the Loan Papers pertaining to the transactions contemplated by or
contained in the Loan Papers.
10.10. Severability. If any provision of any Loan Papers is held to
be illegal, invalid or unenforceable under present or future Laws during the
term thereof, such provision shall be fully severable, the appropriate Loan
Paper shall be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part thereof, and the remaining
provisions thereof shall remain in full force and effect and shall not be
affected by the illegal, invalid, or unenforceable provision or by its severance
therefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as a part of such Loan Paper a
legal, valid and enforceable provision as similar in terms to the illegal,
invalid or unenforceable provision as may be possible.
10.11. Exceptions to Covenants. Neither the Borrower, nor the Parent,
nor any Restricted Subsidiary shall be deemed to be permitted to take any action
or to fail to take any action that is permitted as an exception to any covenant
in any Loan Papers, or that is within the permissible limits of any covenant, if
such action or omission would result in a violation of any other covenant in any
Loan Papers.
75
82
10.12. Counterparts. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
10.13. GOVERNING LAW; WAIVER OF JURY TRIAL.
(A) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE
CONTRACTS MADE IN DALLAS, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO
CONFLICT OF LAWS) AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING ANY OTHER
JURISDICTION AND NOT AS A LIMITATION OF SECTION 10.14 HEREOF, THE BORROWER
AGREES THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS, WILL
HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION HEREWITH. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, THE BORROWER HEREBY WAIVES ANY RIGHT THAT IT MAY HAVE TO A
TRIAL BY JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY OR
OTHERWISE) ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER LOAN PAPERS OR
ANY RELATED MATTERS AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A
JUDGE SITTING WITHOUT A JURY.
(B) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL
PROCESS UPON IT. THE BORROWER AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT
BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT, AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED FIVE BUSINESS DAYS AFTER DEPOSIT IN THE UNITED STATES
MAIL. NOTHING IN THIS SECTION 10.13 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE
AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
10.14. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
10.15. Joint and Several Obligations. The Borrower and the Lenders
agree that the obligations and duties of the Borrower hereunder and under the
Loan Papers shall be joint and several in all instances.
76
83
10.16. No Novation. The Agreement is a renewal, extension, amendment
and restatement of the Existing Credit Agreement, and is not a novation of the
Obligations (as defined in the Existing Credit Agreement). The execution,
delivery and effectiveness of this Agreement and the other Loan Papers shall not
discharge or release the Lien or priority of any of the Loan Papers (as defined
in the Existing Credit Agreement) which shall remain valid, binding and
enforceable Liens against the Borrower and each of the other Persons which
granted such Liens.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
77
84
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
THE BORROWER:
WORLD ACCESS HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Its:Vice President and Treasurer
----------------------------
TELCO SYSTEMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------
Its:Vice President and Treasurer
----------------------------
78
85
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative
Agent
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Its: Managing Director
SYNDICATION AGENT:
FLEET NATIONAL BANK, as Syndication Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Its: Vice President
-----------------------------------
DOCUMENTATION AGENT:
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., as Documentation
Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its: Vice President
-----------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Its: Executive Vice President
-----------------------------------
79
86
LENDERS:
BANK OF AMERICA, N.A.,
individually as Lender
Specified Percentage: 60.0000000000%
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Its: Managing Director
80
87
FLEET NATIONAL BANK,
individually as Lender
Specified Percentage: 25.0000000000%
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Its: Vice President
-----------------------------------
81
88
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC., individually as
Lender
Specified Percentage: 15.0000000000%
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
-----------------------------------
Its: Vice President
-----------------------------------
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Its: Executive Vice President
-----------------------------------
82