Exhibit 4.8
LOAN AGREEMENT
for a
MULTI-CURRENCY FACILITY
to
CARRIER 1 INTERNATIONAL S.A.
as Borrower
with
NORTEL NETWORKS INC.
as Agent
FOR THE PURPOSES OF ARTICLE 1 OF THE PROTOCOL ANNEXED TO THE CONVENTION ON
JURISDICTION AND THE ENFORCEMENT OF JUDGMENTS IN CIVIL AND COMMERCIAL MATTERS
SIGNED AT BRUSSELS ON SEPTEMBER 27, 1968, CARRIER 1 INTERNATIONAL
S.A. EXPRESSLY AND SPECIFICALLY AGREES TO CLAUSE 19 OF THIS LOAN AGREEMENT
XXXXX XXXXXXX KEES VAN OPHEM
CARRIER 1 INTERNATIONAL X.X.
XXXXXX XXXX
London
CONTENTS
CLAUSE HEADING PAGE
1 Purpose and definitions.......................................................................6
1.1 Purpose..............................................................................6
1.2 Definitions..........................................................................6
1.3 Headings............................................................................36
1.4 Construction of certain terms.......................................................37
1.5 Majority Lenders....................................................................38
1.6 Agent's opinion.....................................................................38
1.7 Unrestricted Subsidiary.............................................................38
1.8 Restricted Subsidiary...............................................................39
1.9 Guarantee of Unrestricted Subsidiary................................................39
1.10 Currency Exchange Calculations......................................................39
2 The Facility.................................................................................41
2.1 Amount..............................................................................41
2.2 Obligations several.................................................................41
2.3 Interests several...................................................................42
3 Conditions...................................................................................43
3.1 Documents and evidence..............................................................43
3.2 General conditions precedent........................................................43
3.3 Waiver of conditions precedent......................................................43
3.4 Notification........................................................................43
4 Advances; currencies.........................................................................44
4.1 Maximum outstandings................................................................44
4.2 Purpose of Advances.................................................................44
4.3 Drawdown............................................................................44
4.4 Amount..............................................................................45
4.5 Selection of currencies.............................................................46
4.6 Currency Amounts....................................................................46
4.7 Notification to Lenders.............................................................47
4.8 Application of proceeds.............................................................47
5 Interest; alternative interest rates.........................................................48
5.1 Normal interest rate................................................................48
5.2 Selection of Interest Periods.......................................................48
5.3 Determination of Interest Periods...................................................48
5.4 Default Interest....................................................................48
5.5 Notification of interest rate.......................................................49
5.6 Reference Bank quotations...........................................................49
5.8 Secured/ Unsecured Advances and Calculation of Margin...............................50
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6 Repayment, prepayment and cancellation.......................................................52
6.1 Repayment...........................................................................52
6.2 Voluntary prepayment................................................................52
6.3 Application of prepayments..........................................................52
6.4 Amounts payable on prepayment.......................................................52
6.5 Notice of prepayment................................................................52
6.6 Cancellation of Commitments.........................................................52
6.7 Termination of Commitments..........................................................53
6.8 Mandatory Prepayments/Cancellation..................................................53
6.9 Additional Mandatory Prepayments....................................................56
7 Fees and expenses............................................................................57
7.1 Fees................................................................................57
7.2 Expenses............................................................................57
7.3 Value Added Tax.....................................................................57
7.4 Stamp and other duties..............................................................58
8 Payments and Taxes; accounts and calculations................................................59
8.1 No set-off or counterclaim; distribution to the Lenders.............................59
8.2 Payments by the Lenders.............................................................59
8.3 Non-Banking Days....................................................................59
8.4 Agent may assume receipt............................................................59
8.5 Grossing-up for Taxes...............................................................60
8.6 Qualifying Persons..................................................................60
8.7 Claw-back of Tax benefit............................................................61
8.8 Rules Concerning Additional Amounts.................................................61
8.9 Bank accounts.......................................................................62
8.10 Partial payments....................................................................62
8.11 Calculations........................................................................63
8.12 Certificates prima facie............................................................63
8.13 Effect of monetary union............................................................63
9 Subsidiary Guarantee.........................................................................65
10 Representations and warranties...............................................................66
10.1 Repeated representations and warranties.............................................66
10.2 Repetition..........................................................................69
11 Undertakings.................................................................................70
11.1 Positive Covenants..................................................................70
11.2 Negative covenants..................................................................72
11.3 No Consolidations etc...............................................................88
11.4 Consolidations......................................................................89
11.5 Further Restrictions on Consolidations..............................................89
12 Events of Default............................................................................90
12.1 Events of Default...................................................................90
12.2 Acceleration........................................................................91
12.3 Demand basis........................................................................92
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13 Indemnities..................................................................................93
13.1 Miscellaneous indemnities...........................................................93
13.2 Currency of account; currency indemnity.............................................93
13.3 ECB Reserve Requirements............................................................94
14 Unlawfulness and increased costs; mitigation.................................................95
14.1 Unlawfulness........................................................................95
14.2 Increased costs.....................................................................95
14.3 Exceptions..........................................................................97
14.4 Mitigation..........................................................................97
15 Set-off and pro rata payments................................................................99
15.1 Set-off.............................................................................99
15.2 Pro rata payments...................................................................99
15.3 No release.........................................................................100
15.4 No charge..........................................................................100
16 Assignment, substitution and lending offices................................................101
16.1 Benefit and burden.................................................................101
16.2 No assignment by Obligors..........................................................101
16.3 Substitution.......................................................................101
16.4 Reliance on Transfer Certificate...................................................102
16.5 Authorisation of Agent.............................................................102
16.6 Construction of certain references.................................................102
16.7 Lending offices....................................................................103
16.8 Disclosure of information..........................................................103
16.9 Confidentiality undertaking........................................................103
16.10 Restrictions on transfers..........................................................104
17 Agent, Security Trustee and Reference Bank..................................................105
17.1 Appointment of Agent...............................................................105
17.2 Agent's actions....................................................................105
17.3 Agent's duties.....................................................................105
17.4 Agent's rights.....................................................................106
17.5 No liability of Security Trustee and Agent.........................................107
17.6 Non-reliance on Security Trustee or Agent.........................................108
17.7 No Responsibility on Security Trustee or Agent for any Security
Provider's performance.............................................................108
17.8 Reliance on documents and professional advice......................................108
17.9 Other dealings.....................................................................109
17.10 Rights of Agent and Security Trustee as Lender; no partnership.....................109
17.11 Amendments; waivers................................................................109
17.12 Reimbursement and indemnity by Lenders.............................................110
17.13 Retirement of Agent................................................................111
17.14 Security Trustee as Joint Creditor.................................................111
18 Notices and other matters...................................................................114
18.1 Notices............................................................................114
18.2 Notices through the Agent..........................................................115
18.3 No implied waivers, remedies cumulative............................................115
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18.4 English translations...............................................................115
18.5 Counterparts.......................................................................115
19 Governing law and jurisdiction..............................................................116
19.1 Law................................................................................116
19.2 Submission to jurisdiction.........................................................116
19.3 Agent for service of process.......................................................116
SCHEDULE
1 The Lenders and their Commitments...........................................................117
2 Part A Form of Drawdown Notice - Supplier Financing........................................118
Part B Form of Drawdown Notice - Supplier Re-financing..................................120
Part C Form of Drawdown Notice - Non-Supplier Financing.................................122
Part D Form of Drawdown Notice - Non-Supplier Refinancing...............................124
3 Part A - Documents and evidence required as conditions precedent to the first Advance.......126
Part B - Documents and evidence to be delivered by the Borrower.........................129
4 Calculation of Additional Cost..............................................................130
5 Form of Transfer Certificate................................................................132
6 Documents and Evidence to be delivered by a Guarantor.......................................135
7 Agent's Letter..............................................................................136
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THIS AGREEMENT is dated 25 June 1999 and is made BETWEEN:
(1) CARRIER 1 INTERNATIONAL S.A. as Borrower;
(2) THE LENDERS AND FINANCIAL INSTITUTIONS whose names and addresses are
set out in schedule 1;
(3) NORTEL NETWORKS INC. as Agent; and
(4) any person who may, from time to time, accede to this Agreement as
security trustee for the Finance Parties under the Security Trust Deed
as Security Trustee.
IT IS AGREED as follows:
1 PURPOSE AND DEFINITIONS
1.1 PURPOSE
This Agreement sets out the terms and conditions upon and subject to
which the Lenders agree, according to their several obligations, to
make available to the Borrower a senior revolving credit facility for
the purposes set out in clause 4.2.
1.2 DEFINITIONS
In this Agreement, subject to clause 1.4(k) and unless the context
otherwise requires:
"ACQUIRED INDEBTEDNESS" means Indebtedness of a Person existing at the
time such Person becomes a Restricted Subsidiary or is merged with or
consolidated with a Restricted Subsidiary or assumed in connection with
an Asset Acquisition by a Restricted Subsidiary and not Incurred in
connection with, or in anticipation of, such Person becoming a
Restricted Subsidiary or such Asset Acquisition;
"ADDITIONAL COST" means in relation to any period relating to any
Advance a percentage calculated for such period at an annual rate
determined in accordance with schedule 4;
"ADDITIONAL NOTES" means Notes which may, from time to time, be issued
pursuant to section 2.15 of either Indenture after the Closing Date
(other than Exchange Notes, as defined in either Indenture);
"ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS" means the total amount of
assets of the Borrower and its Restricted Subsidiaries (less applicable
depreciation, amortisation and other valuation reserves), except to the
extent resulting from write-ups of capital assets (excluding write-ups
in connection with accounting for acquisitions in conformity with
GAAP), after deducting therefrom:
(a) all current liabilities of the Borrower and its Restricted
Subsidiaries (excluding inter-company items); and
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(b) all goodwill, trade names, trademarks, patents, unamortised
debt discount and expenses and other like intangibles,
all as set forth in the most recent quarterly or annual consolidated
balance sheet of the Borrower and its Restricted Subsidiaries, prepared
in conformity with GAAP and filed with the Commission and provided to
the Agent;
"ADJUSTED CONSOLIDATED NET INCOME" means, for any period, the aggregate
net income (or loss) of the Borrower and its Restricted Subsidiaries
for such period determined on a consolidated basis in conformity with
GAAP provided that the following items shall be excluded in computing
Adjusted Consolidated Net Income (without duplication):
(a) the net income (or loss) of any Person that is not a
Restricted Subsidiary, except (x) with respect to net income,
to the extent of the amount of dividends or other
distributions actually paid to the Borrower or any of its
Restricted Subsidiaries by such Person during such period and
(y) with respect to net losses, to the extent of the amount of
Investments made by the Borrower or any Restricted Subsidiary
in such Person during such period;
(b) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to paragraph (C)
of clause 11.2(b) (and in such case, except to the extent
included pursuant to paragraph (a) above), the net income (or
loss) of any Person accrued prior to the date it becomes a
Restricted Subsidiary or is merged into or consolidated with
the Borrower or any of its Restricted Subsidiaries or all or
substantially all of the property and assets of such Person
are acquired by the Borrower or any of its Restricted
Subsidiaries;
(c) the net income of any Restricted Subsidiary other than a
Permanent Guarantor to the extent that the declaration or
payment of dividends or similar distributions by such
Restricted Subsidiary of such net income is not at the time
permitted (after giving effect to any effective waiver,
consent or approval) by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to such
Restricted Subsidiary;
(d) any gains or losses attributable to Asset Sales (without
regard to paragraph (iii) or (iv) in the proviso to the
definition thereof);
(e) solely for purposes of calculating the amount of Restricted
Payments that may be made pursuant to paragraph (C) of clause
11.2(b), any amount paid or accrued as dividends on Preferred
Stock of the Borrower or any Restricted Subsidiary owned by
Persons other than the Borrower and any of its Restricted
Subsidiaries;
(f) all extraordinary gains and extraordinary losses or
extraordinary charges;
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(g) any compensation expense to the extent paid or payable solely
with Capital Stock (other than Disqualified Stock) of the
Borrower or any options, warrants or other rights to acquire
Capital Stock (other than Disqualified Stock) of the Borrower;
and
(h) the cumulative effect of a change in accounting principles;
"ADVANCE" means each borrowing of a portion of the Commitments by a
Borrower by way of advance or (as the context may require) the
principal amount of such borrowing for the time being;
"AFFILIATE" means, as applied to any Person, any other Person directly
or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person;
"AGENT" means Nortel Networks Inc. of Delaware, USA whose registered
office is at CT Corporation System, Corporate Trust Ctr, 0000 Xxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxxxxxx, XX 00000 or such other person as may be
appointed agent for the Lenders pursuant to clause 17;
"ASSET ACQUISITION" means:
(a) an investment by the Borrower or any of its Restricted
Subsidiaries in any other Person pursuant to which such Person
shall become a Restricted Subsidiary or shall be merged into
or consolidated with the Borrower or any of its Restricted
Subsidiaries provided that such Person's primary business is
related, ancillary or complementary to the businesses of the
Borrower and its Restricted Subsidiaries on the date of such
investment, as determined in good faith by the Board of
Directors (whose determination shall be conclusive and
evidenced by a Board Resolution); or
(b) an acquisition by the Borrower or any of its Restricted
Subsidiaries of the property and assets of any Person other
than the Borrower or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business
of such Person provided that the property and assets acquired
are related, ancillary or complementary to the businesses of
the Borrower and its Restricted Subsidiaries on the date of
such acquisition, as determined in good faith by the Board of
Directors (whose determination shall be conclusive and
evidenced by a Board Resolution);
"ASSET DISPOSITION" means the sale or other disposition by the Borrower
or any of its Restricted Subsidiaries (other than to the Borrower or
another Restricted Subsidiary) of:
(a) all or substantially all of the Capital Stock of any
Restricted Subsidiary; or
(b) all or substantially all of the assets that constitute a
division or line of business of the Borrower or any of its
Restricted Subsidiaries;
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"ASSET SALE" means any sale, transfer or other disposition (including
by way of merger, consolidation or sale-leaseback transaction) in one
transaction or a series of related transactions by the Borrower or any
of its Restricted Subsidiaries to any Person other than the Borrower or
any of its Restricted Subsidiaries of:
(a) all or any of the Capital Stock of any Restricted Subsidiary;
(b) all or substantially all of the property and assets of an
operating unit or business of the Borrower or any of its
Restricted Subsidiaries; or
(c) any other property and assets (other than the Capital Stock of
or any other Investment in an Unrestricted Subsidiary) of the
Borrower or any of its Restricted Subsidiaries outside the
ordinary course of business of the Borrower or such Restricted
Subsidiary,
provided that "ASSET SALE" shall not include:
(i) sales, transfers or other dispositions of Temporary
Cash Investments, inventory, receivables and other
current assets;
(ii) sales, transfers or other dispositions of assets
constituting a Restricted Payment (or a transaction
excluded from the definition of the term "Restricted
Payments") permitted to be made under clause 11.2(b);
(iii) sales, transfers or other dispositions of assets with
a fair market value (as certified in a Certificate)
not in excess of $2 million in any transaction or
series of related transactions; or
(iv) sales or other dispositions of assets for
consideration at least equal to the fair market value
of the assets sold or disposed of, to the extent that
the consideration received would constitute property
or assets of the kind described in sub-paragraph 2)
of paragraph (A) of the proviso to paragraph (ii) of
clause 11.2(j);
"ASSOCIATED COMPANY" of a person means:
(a) any other person which is directly or indirectly controlled
by, under common control with or controlling such person; or
(b) any other person owning beneficially and/or legally, directly
or indirectly, 10 per cent. or more of the equity interest in
such person or 10 per cent. of whose equity interest is owned
beneficially and/or legally directly or indirectly by such
person,
and for the purposes of this definition the term "control" means
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a person whether through
the ownership of interests or voting securities, by contract or
otherwise;
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"AUTHORISED OFFICER" means that officer or officers of the relevant
Obligor authorised to sign Certificates, Drawdown Notices and other
notices, requests, or confirmations referred to in this Agreement or
relating to the Facility;
"AVAILABLE FACILITY AMOUNT" means at any time the amount by which the
Facility Amount exceeds the aggregate Dollar Amount of the Loan (the
Dollar Amount of the Loan being calculated in accordance with clause
4.6(c));
"AVERAGE LIFE" means, at any date of determination with respect to any
Indebtedness, the quotient obtained by dividing
(a) the sum of the products of (i) the number of years from such
date of determination to the dates of each successive
scheduled principal payment of such Indebtedness and (ii) the
amount of such principal payment; by
(b) the sum of all such principal payments;
"BANKING DAY" means a day (other than Saturday or Sunday) on which
dealings in deposits in the relevant Optional Currency are carried on
in the London Interbank Market and (if any calculation in respect of,
or transfer of funds in an Optional Currency is required to be made on
such day) on which banks and foreign exchange markets are open for
business in the City of London, New York City and the principal
financial centre in the jurisdiction of the Optional Currency
concerned;
"BOARD OF DIRECTORS" means the Board of Directors of the Borrower;
"BOARD RESOLUTION" means a resolution of the Board of Directors of the
Borrower which has been duly adopted by the Board of Directors and is
in full force and effect on the date of such adoption and at the date
of delivery of a copy thereof to the Agent under this Agreement;
"BORROWER" means Carrier 1 International S.A., a societe anonyme
organised under the laws of the Grand Duchy of Luxembourg;
"BORROWINGS" has the same definition as "Indebtedness" except that the
last three words of paragraph (d) shall be amended to read "...
including Trade Payables";
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which the commercial banks in the City of New York, in Frankfurt or in
the city of the principal office of the Agent are authorised by law to
close;
"BUSINESS PLAN" means the business plan in respect of the Group
(version 12.4) for the period 1998 to 2005;
"CAPITALISED LEASE" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) of which the discounted
present value
10
of the rental obligations of such Person as lessee is, under GAAP,
required to be capitalised on the balance sheet of such Person;
"CAPITALISED LEASE OBLIGATIONS" means the discounted present value of
the rental obligations under a Capitalised Lease;
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated,
whether voting or non-voting) in equity of such Person, whether
outstanding on the Closing Date or issued thereafter;
"CERTIFICATE" means, in respect of a corporate entity, a certificate
signed by two executive officers of such entity;
"CHANGE OF CONTROL" means such time as:
(a) a "person" or "group" (within the meaning of Section 13(d) or
14(d)(2) of the Exchange Act) becomes the ultimate "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 35 per cent. (50 per cent., if the Permitted Holders
hold more than 35 per cent. of the voting power of the Voting
Stock of the Borrower on a fully diluted basis) of the total
voting power of the Voting Stock of the Borrower on a fully
diluted basis and such ownership represents a greater
percentage of the total voting power of the Voting Stock of
the Borrower, on a fully diluted basis, than is held by
Permitted Holders on such date; or
(b) during any period of two consecutive years beginning on or
after the Closing Date, individuals who at the beginning of
such period were members of the Board of Directors (together
with any new directors whose election by the Board of
Directors or whose nomination for election by the Borrower's
shareholders was approved by a vote of at least a majority of
the members of the Board of Directors then in office who
either were members of the Board of Directors at the beginning
of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute
a majority of the members of the Board of Directors then in
office;
"CLOSING DATE" means February 19, 1999;
"COLLATERAL INSTRUMENTS" means notes, bills of exchange, certificates
of deposit and other negotiable and non-negotiable instruments,
guarantees and any other documents or instruments which contain or
evidence an obligation (with or without security) to pay, discharge or
be responsible directly or indirectly for, any Indebtedness or
liabilities under this Agreement;
"COMMISSION" means the Securities and Exchange Commission of the
United States of America, as from time to time constituted, created
under the Exchange Act or, if at any time after the execution of this
Agreement such Commission is not existing and performing the duties
now assigned to it, then the body performing such duties at such time;
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"COMMITMENT" means, in relation to a Lender, at any relevant time the
percentage set opposite its name in schedule 1 and/or, in the case of a
Transferee, the amount transferred as specified in the relevant
Transfer Certificate, as reduced, in each case, by any relevant term of
this Agreement and so that, if at such time the Total Commitments have
been reduced to zero, references to a Lender's Commitment shall be
construed as a reference to that Lender's Commitment immediately prior
to such reduction to zero;
"CONSOLIDATED EBITDA" means, for any period, Adjusted Consolidated Net
Income for such period plus, to the extent such amount was deducted in
calculating such Adjusted Consolidated Net Income:
(a) Consolidated Interest Expense;
(b) provision for all taxes based on income, profits or capital;
(c) depreciation expense;
(d) amortisation expense (including but not limited to
amortisation of goodwill and intangibles and amortisation and
write-off of financing costs); and
(e) all other non-cash items reducing Adjusted Consolidated Net
Income (other than items that will require cash payments and
for which an accrual or reserve is, or is required by (GAAP to
be, made), less all non-cash items increasing Adjusted
Consolidated Net Income (other than any item reversing,
offsetting or reducing any such accrual or reserve),
all as determined on a consolidated basis for the Borrower and its
Restricted Subsidiaries in conformity with GAAP provided that, if any
Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary,
Consolidated EBITDA shall be reduced (to the extent not otherwise
reduced in accordance with GAAP) by an amount equal to:
(A) the amount of the Adjusted Consolidated Net Income
attributable to such Restricted Subsidiary; multiplied by
(B) the percentage ownership interest in the income of such
Restricted Subsidiary not owned on the last day of such period
by the Borrower or any of its Restricted Subsidiaries;
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the aggregate
amount of interest in respect of Indebtedness (including amortisation
of original issue discount on any Indebtedness and the interest portion
of any deferred payment obligation, calculated in accordance with the
effective interest method of accounting; all commissions, discounts and
other fees and charges owed with respect to letters of credit and
bankers' acceptance financing; the net costs associated with Interest
Rate Agreements; and interest on Indebtedness that is Guaranteed or
secured by the Borrower or any of its Restricted Subsidiaries) and the
interest component of Capitalised Lease Obligations paid, accrued or
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scheduled to be paid or to be accrued by the Borrower and its
Restricted Subsidiaries during such period, all as determined on a
consolidated basis (without taking into account Unrestricted
Subsidiaries) in conformity with GAAP;
"CONSOLIDATED LEVERAGE RATIO" means, on any relevant date, the ratio
of:
(a) the aggregate amount of Indebtedness of the Borrower and its
Restricted Subsidiaries on a consolidated basis outstanding on
such date; to
(b) four times the amount of Consolidated EBITDA for the then most
recent fiscal quarter for which financial statements of the
Borrower have been filed with the Commission and provided to
the Agent under this Agreement (such quarter being the
"QUARTER") provided that, in making the foregoing calculation:
(A) effect shall be given, in calculating the amount of
Indebtedness outstanding on the date, to any
Indebtedness to be Incurred on the date, or to be
repaid, repurchased, redeemed or otherwise retired or
discharged on the date;
(B) effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving effect to the
application of proceeds of any Asset Disposition)
that occur from the beginning of the Quarter through
the Transaction Date (the "REFERENCE PERIOD"), as if
they had occurred and such proceeds had been applied
on the first day of such Reference Period; and
(C) effect shall be given to Asset Dispositions and Asset
Acquisitions (including giving effect to the
application of proceeds of any asset disposition)
that have been made by any Person that has become a
Restricted Subsidiary or has been merged with or
into, or consolidated with, the Borrower or any
Restricted Subsidiary during such Reference Period
and that would have constituted Asset Dispositions or
Asset Acquisitions had such transactions occurred
when such Person was a Restricted Subsidiary as if
such asset dispositions or asset acquisitions were
Asset Dispositions or Asset Acquisitions that
occurred on the first day of such Reference Period
provided that to the extent that paragraph (B) or (C)
of this definition requires that effect be given to
an Asset Acquisition or Asset Disposition, such
calculation shall be based upon the full fiscal
quarter immediately preceding the relevant date of
the Person, or division or line of business of the
Person, that is acquired or disposed of for which
financial information is available;
"CONSOLIDATED NET WORTH" means, at any date of determination,
shareholders' equity (plus, to the extent not otherwise included,
Preferred Stock of the Borrower) as set forth on the most recently
available quarterly or annual consolidated balance sheet of the
Borrower and its Restricted Subsidiaries
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(which shall be as of a date not more than 90 days prior to the date of
such computation, and which shall not take into account Unrestricted
Subsidiaries), less any amounts attributable to Disqualified Stock or
any equity security convertible into or exchangeable for Indebtedness,
the cost of treasury stock and the principal amount of any promissory
notes receivable from the sale of the Capital Stock of the Borrower or
any of its Restricted Subsidiaries, each item to be determined in
conformity with GAAP (excluding the effects of foreign currency
exchange adjustments under Financial Accounting Standards Board
Statement of Financial Accounting Standards No. 52);
"CONTRIBUTION" means, in relation to a Lender, the principal amount of
the Advances owing to such Lender at any relevant time;
"CURRENCY AGREEMENT" means any foreign exchange contract, currency swap
agreement or any other similar agreement or arrangement;
"DEFAULT" means any Event of Default or any event or circumstance which
would, upon the giving of a notice by the Agent and/or the expiry of
the relevant period and/or the fulfilment of any other condition (in
each case as specified in clause 12.1), constitute an Event of Default;
"DISQUALIFIED STOCK" means any class or series of Capital Stock of any
Person that by its terms or otherwise is:
(a) required to be redeemed prior to the Stated Maturity of the
Loan;
(b) redeemable at the option of the holder of such class or series
of Capital Stock at any time prior to the Stated Maturity of
the Loan; or
(c) convertible into or exchangeable for Capital Stock referred to
in paragraphs (a) or (b) above or Indebtedness having a
scheduled maturity prior to the Stated Maturity of the Loan
provided that any Capital Stock that would not constitute
Disqualified Stock but for provisions thereof giving holders
thereof the right to require such Person to repurchase or
redeem such Capital Stock upon the occurrence of an Asset Sale
or Change of Control occurring prior to the Stated Maturity of
the Loan shall not constitute Disqualified Stock if the
Borrower can show, to the satisfaction of the Agent, that such
Capital Stock would not constitute Disqualified Stock under
this Agreement;
"DOLLAR AMOUNT" means in relation to an Advance, the Loan or any part
of the Loan drawn down or to be drawn down and if denominated in:
(a) Dollars, the amount of such Advance, the Loan (or part
thereof) or any other amount;
(b) an Optional Currency, the amount in Dollars which would be
required to purchase the principal amount of that Advance, the
Loan or such part of the Loan (as determined in accordance
with clause 4.6);
14
"DOLLAR NOTE" has the meaning given to it in the Indentures;
"DOLLARS" and "$" mean the lawful currency for the time being of the
United States of America;
"DRAWDOWN DATE" means the date, being a Banking Day falling within the
Drawdown Period, on which an Advance is or is to be drawn down;
"DRAWDOWN NOTICE" means a notice in the form or substantially in the
form of the appropriate part of schedule 2 (and the appropriate part
shall be determined by reference to clause 4.3) duly completed with
particulars of the relevant Advance;
"DRAWDOWN PERIOD" means the period from the date of this Agreement and
ending on whichever is the earlier of:
(a) Termination Date; and
(b) the date on which:
(i) the Borrower cancels the whole of the undrawn
Commitments under clause 6; or
(ii) the Total Commitments are reduced to zero pursuant to
clauses 6, 12.2 or 14.1;
"ENCUMBRANCE" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment by way of security, trust
arrangement for the purpose of providing security or other security
interest of any kind securing any obligation of any person but does not
include liens arising in the ordinary course of trading by operation of
law;
"END OF TERM AMOUNT" means the lesser of:
(a) $75 million; and
(b) the Dollar Amount of the Loan outstanding as at the
Termination Date;
"ENVIRONMENTAL CLAIM" means any claim, notice of prosecution, demand,
action, official warning, abatement or other order (conditional or
otherwise) relating to Environmental Matters or any notification or
order requiring compliance with the terms of any Environmental Licence
or Environmental Law;
"ENVIRONMENTAL LAW" means all or any law, statute, rule, regulation,
treaty, by-law, code of practice, order, notice, demand, decision of
the courts or of any governmental authority or agency or any other
regulatory or other body in any jurisdiction relating to Environmental
Matters;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation,
consent or other approval required at any time by any Environmental
Law;
15
"ENVIRONMENTAL MATTERS" means:
(a) the generation, deposit, disposal, keeping, treatment,
transportation, transmission, handling, importation,
exportation, processing, collection, sorting, presence or
manufacture of any Relevant Substance;
(b) nuisance, noise, defective premises, health and safety at work
or elsewhere; and
(c) the pollution, conservation or protection of the environment
(both natural and built) or of man or any living organisms
supported by the environment or any other matter whatsoever
affecting the environment or any part of it;
"EQUIPMENT" means any Switch, Transmission Equipment, Software and any
other telecommunications equipment including, but for the avoidance of
doubt, not limited to, equipment supplied or to be supplied under the
Original Supply Contract;
"EVENT OF DEFAULT" means any of the events or circumstances described
in clause 12.1;
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
of the United States of America;
"FACILITY" means the credit facility granted by the Lenders to the
Borrower under this Agreement;
"FACILITY AMOUNT" has the meaning given to it in clause 2.1(a);
"FINAL MATURITY DATE" means 31 December 2004;
"FINANCE DOCUMENTS" means this Agreement, the fee letter referred to in
clause 7.1(a), any Transfer Certificates and any Security Document;
"FINANCE PARTY" means each of the Agent, the Security Trustee and the
Lenders;
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Closing Date, including those
set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial
Accounting Standards Board or in such other statements by such other
entity as approved by a significant segment of the accounting
profession; provided, however, that all reports and other financial
information provided by the Borrower to the Holders of the Notes or
the Trustee shall be prepared in accordance with GAAP as in effect
from time to time. All ratios and computations contained or referred
to in this Agreement shall be computed in conformity with GAAP applied
on a consistent basis, except that calculations made for purposes of
determining compliance with the terms of the covenants and with other
provisions of this Agreement shall be
16
made without giving effect to (a) the amortisation or write-off of any
expenses incurred in connection with the offering of the Units and (b)
the amortisation of any amounts required or permitted by Accounting
Principles Board Opinion Nos. 16 and 17;
"GROUP" means the Borrower and its Subsidiaries;
"GUARANTEE" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness, Borrowings
or Indebtedness for Borrowed Money (as the case may be) of any other
Person and, without limiting the generality of the foregoing, any such
obligation, direct or indirect, contingent or otherwise, of such
Person:
(a) to purchase or pay (or advance or supply funds for the
purchase or payment of such Indebtedness, Borrowings or
Indebtedness for Borrowed Money (as the case may be) of) such
other Person (whether arising by virtue of partnership
arrangements, or by agreements to keep-well, to purchase
assets, goods, securities or services (unless such purchase
arrangements are on arm's-length terms and are entered into in
the ordinary course of business), to take-or-pay, or to
maintain financial statement conditions or otherwise); or
(b) entered into for purposes of assuring in any other manner the
obligee of such Indebtedness, Borrowings or Indebtedness for
Borrowed Money (as the case may be) of the payment thereof or
to protect such obligee against loss in respect thereof (in
whole or in part),
provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business; the term
Guarantee used as a verb shall have a corresponding meaning;
"GUARANTEED INDEBTEDNESS" has the meaning given to it in clause
11.2(e);
"GUARANTEED LIABILITIES" means all moneys, obligations and liabilities
of the Borrower under or pursuant to this Agreement, from time to time,
guaranteed or Guaranteed or to be guaranteed or Guaranteed by any
Subsidiary Guarantor;
"HOLDER" means the registered holder of any Note;
"HOLDING COMPANY" means, in relation to a Person, a Person of which
that Person is a Subsidiary;
"INCAPACITY" means, in relation to a person, the insolvency,
liquidation, dissolution, winding-up, administration, receivership or
other incapacity of that person whatsoever;
"INCUR" means, with respect to any Indebtedness or Borrowings, to
incur, create, issue, assume, enter into any Guarantee of or otherwise
become liable for or with respect to, or become responsible for, the
payment of, contingently or otherwise, such Indebtedness or Borrowings,
including an "INCURRENCE" by means of the
17
acquisition of more than 50 per cent. of the Capital Stock of any
Person provided that neither the accrual of interest nor the accretion
of original issue discount shall be considered an Incurrence of
Indebtedness or Borrowings;
"INDEBTEDNESS" means, with respect to any Person at any date of
determination (without duplication):
(a) all indebtedness of such Person for borrowed money;
(b) all principal obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(c) all reimbursement obligations of such Person in respect of
letters of credit or other similar instruments (excluding
obligations with respect to letters of credit (including trade
letters of credit) or other similar instruments securing
obligations (other than obligations described in (a) or (b)
above or (e), (f) or (g) below) entered into in the ordinary
course of business of such Person to the extent such letters
of credit are not properly honoured and drawn upon or, if
properly honoured and drawn upon, to the extent such drawing
is reimbursed no later than the third Business Day following
receipt by such Person of a demand for reimbursement);
(d) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services, which purchase price
is due more than six months after the date of placing such
property in service or taking delivery and title thereto or
the completion of such services excluding Trade Payables;
(e) all Capitalised Lease Obligations of such Person;
(f) all Indebtedness of other Persons secured by a Encumbrance on
any asset of such Person, whether or not such Indebtedness is
assumed by such Person provided that the amount of such
Indebtedness of such Person shall be the lesser of:
(i) the fair market value of such asset at such date of
determination; and
(ii) the amount of such Indebtedness of such other
Persons;
(g) all Indebtedness of other Persons Guaranteed by such Person
provided that the amount of Indebtedness of such Person shall
be the lesser of (i) the amount Guaranteed and (ii) the amount
of such Indebtedness of such other Persons; and
(h) to the extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate
Agreements, except if such agreements (i) are designed solely
to protect the Borrower or its Restricted Subsidiaries against
fluctuations in foreign currency exchange
18
rates or interest rates and (ii) do not increase the
Indebtedness of the obligor outstanding at any time other than
as a result of fluctuations in foreign currency exchange rates
or interest rates or by reason of fees, indemnities and
compensation payable thereunder provided that the amount of
Indebtedness of any Person as described above at any date
shall be the outstanding balance at such date of all
unconditional obligations as described above and, with respect
to contingent obligations as described above, the maximum
liability upon the occurrence of the contingency giving rise
to the obligation, provided (A) that the amount outstanding at
any time of any Indebtedness issued with original issue
discount is the face amount of such Indebtedness less the
remaining unamortised portion of the original issue discount
of such Indebtedness at the time of its issuance as determined
in conformity with GAAP, (B) that obligations for money
borrowed and set aside at the time of the Incurrence of any
Indebtedness in order to pre-fund the payment of the interest
on such Indebtedness shall not be deemed to be "Indebtedness"
so long as such money is held to secure the payment of such
interest, (C) that the amount of an obligation in respect of a
letter of credit or other similar instrument is the aggregate
undrawn and unexpired amount thereof plus the aggregate amount
of drawings properly honoured thereunder that have not then
been reimbursed; (D) that "Indebtedness" shall not include any
liability for federal, state, local or other taxes; and (E)
Indebtedness shall not be deemed to include any obligation
arising from the honouring of a check, draft or similar
instrument drawn against insufficient funds, provided that
such obligation is extinguished within five Business Days of
its Incurrence;
"INDEBTEDNESS FOR BORROWED MONEY" means Indebtedness of a type
described in clause (a), (b) or (e) of the definition of
"Indebtedness";
"INDENTURE" means each of:
(a) a trust indenture dated 19 February 1999 in respect of 13 1/4
per cent. Senior Euro Notes due 2009, issued or to be issued
by Carrier 1 International S.A.; and
(b) a trust indenture dated 19 February 1999 in respect of 13 1/4
per cent. Senior Dollar Notes due 2009, issued or to be issued
by Carrier 1 International S.A.;
"INSOLVENT" means in relation to a Person:
(a) when the relevant Person becomes insolvent, is subject to
controlled management, is declared bankrupt, ceases payment of
or is unable to pay all or any of its debts as they fall due;
(b) when the relevant Person has an administrator, receiver or
liquidator appointed over all or any substantial part of its
assets;
19
(c) when a substantial part of its assets is subject to
sequestration, attachment or other process of enforcement;
(d) when the relevant Person is subject to an application for
declaration of bankruptcy or a liquidation;
(e) when the relevant Person is involuntarily in liquidation; or
(f) when an event analogous to any of the above occurs in any
jurisdiction;
"INTERCONNECT AGREEMENTS" means, in respect of a Purchaser, the
inter-connect agreements entered into from time to time between such
Purchaser and the principal fixed line telephony operator in any
Relevant Jurisdiction including each and every such inter-connect
agreement delivered or to be delivered to the Agent pursuant to clauses
3 and/or 4.3(d) together with any replacement, substitute or
supplemental inter-connect agreements entered into or to be entered
into from time to time between such parties;
"INTEREST PAYMENT DATE" means in relation to an Advance or, as the case
may be, the Loan the last day of each Interest Period;
"INTEREST PERIOD" means, in relation to an Advance or Loan, each period
for the calculation of interest in respect of such Advance or Loan
ascertained in accordance with clause 5;
"INTEREST RATE AGREEMENT" means any interest rate protection agreement,
interest rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap or collar agreement,
interest rate hedge agreement, option or future contract or any other
similar agreement or arrangement;
"INVESTMENT" means, in relation to any Person, any direct or indirect
advance, loan or other extension of credit (including by way of
Guarantee or similar arrangement but excluding advances, loans or other
extensions of credit to customers or suppliers in the ordinary course
of business to the extent required by GAAP to be recorded as accounts
receivable, prepaid expenses or deposits on the balance sheet of the
Borrower or its Restricted Subsidiaries) or capital contribution to (by
means of any transfer of cash or other property to others or any
payment for property or services for the account or use of others), or
any purchase or acquisition of Capital Stock, bonds, notes, debentures
or other similar instruments issued by, such Person and shall include:
(a) the designation of a Restricted Subsidiary as an Unrestricted
Subsidiary; and
(b) the fair market value of the Capital Stock (or any other
Investment), held by the Borrower or any of its Restricted
Subsidiaries, of (or in) any Person that has ceased to be a
Restricted Subsidiary provided that the fair market value of
the Investment remaining in any Person that has ceased to be a
Restricted Subsidiary shall not exceed the aggregate amount of
20
Investments previously made in such Person valued at the time
such Investments were made less the net reduction of such
Investments;
"LENDERS" means the banks and financial institutions listed in schedule
1 and includes their successors in title and Transferees;
"LIBOR" means, in relation to a particular period, the BBA Libor rate
for deposits of the currency in question for a period equivalent to
such period at or about 11 a.m. on the Quotation Date as displayed on
the relevant Bloomberg Page (or any equivalent successor to such page),
provided that if on such date no such rate is so displayed, LIBOR for
such period shall be the arithmetic mean (rounded upward if necessary
to five decimal places) of the rates respectively quoted to the Agent
by each of the Reference Banks at the request of the Agent (which
request shall be made by the Agent) at which each such Reference Bank
was offering to prime banks in the London Interbank Market deposits in
the currency of such amount at 11 a.m. on the Quotation Date for such
period in an amount approximately equal to the amount in relation to
which LIBOR is to be determined for a period equivalent to such period;
"LICENCES" means, in relation to a Purchaser, any licence, franchise
and permit that:
(a) is issued to such Purchaser (including issued by way of
replacement or renewal (in whole or in part) of any previous
licence, franchise or permit); and
(b) is material to the business of the Borrower or such Purchaser;
"LOAN" means the aggregate principal amount owing to the Lenders under
this Agreement at any relevant time;
"MAJORITY LENDERS" means at any relevant time Lenders:
(a) the aggregate of whose Contributions exceeds 51 per cent of
the Advances; or
(b) (if no principal amounts are outstanding under this Agreement)
the aggregate of whose Commitments exceeds 51 per cent of the
Total Commitments;
"MANAGEMENT LNVESTOR" means any officer, director, employee or other
member of the management of the Borrower or any of its Subsidiaries, or
family members or relatives thereof, or trusts or partnerships for the
benefit of any of the foregoing, or any of their heirs, executors,
successors and legal representatives;
"MARGIN" means the interest margin applicable to an Advance or to a
Loan calculated in accordance with clause 5.8;
21
"MATERIAL ADVERSE EFFECT" means an event or series of events which has
had or would reasonably be expected to have a material adverse effect
on:
(a) the Borrower's ability to make payments when due in respect of
any of its Indebtedness under this Agreement;
(b) the financial viability of the Borrower and the Subsidiary
Guarantors, if any, taken as a whole; or
(c) the ability of the Lenders to exercise their rights under this
Agreement;
"MATERIAL AGREEMENT" means:
(a) each Interconnect Agreement;
(b) the Notes;
(c) the Transmission Capacity Agreement between Hermes Europe
Railtel (Ireland) Limited and Carrier1 AG dated 29 May 1998;
(d) the Purchase Agreement between Siemens AG and Carrier1 Fibre
Network GmbH dated 18 February 1999;
(e) the Construction and Maintenance Agreement relating to the TAT
- 14 Cable Network between, among others, Carrier1 AG dated 2
September 1998;
(f) the Capacity Agreement and Wet & Dry Sale Agreement between
Telemonde International Bandwidth (Bermuda) Limited and
Carrier1 relating to the Gemini Network; and
(g) the Shareholder Agreement of ViCaMe Infrastructure Development
GmbH made between Viatel Inc., Carrier1 Fibre Network GmbH and
Co. OHG and Metromedia Fibre Network GmbH,. dated 19 February
1999 together with all the Exhibits thereto;
"MONTH" or "MONTHS" means a period beginning in one calendar month and
ending in the relevant later calendar month on the day numerically
corresponding to the day of the calendar month in which it started,
provided that:
(a) if the period started on the last Banking Day in a calendar
month or if there is no such numerically corresponding day, it
shall end on the last Banking Day in such later calendar
month; and
(b) if such numerically corresponding day is not a Banking Day,
the period shall end on the next following Banking Day in such
later calendar month but if there is no such Banking Day it
shall end on the preceding Banking Day,
and "MONTHLY" shall be construed accordingly;
22
"NECESSARY AUTHORISATIONS" means all approvals, authorisations and
licences (excluding Licences) from, all rights granted by and all
filings, registrations and agreements with any Person including any
government or other regulatory authority which are material to the
Borrower and its Restricted Subsidiaries taken as a whole;
"NET CASH PROCEEDS" means:
(a) with respect to any Asset Sale, the proceeds of such Asset
Sale when received in the form of cash or cash equivalents,
including payments in respect of deferred payment obligations
(to the extent corresponding to the principal, but not
interest, component thereof) when received in the form of cash
or cash equivalents (except to the extent such obligations are
financed or sold with recourse to the Borrower or any
Restricted Subsidiary) and proceeds from the conversion of
other property received when converted to cash or cash
equivalents, net of
(i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and
investment bankers) related to such Asset Sale;
(ii) provisions for all taxes (whether or not such taxes
will actually be paid or are payable) as a result of
such Asset Sale without regard to the consolidated
results of operations of the Borrower and its
Restricted Subsidiaries, taken as a whole, including
as a consequence of any transfer of funds in
connection with the application thereof in accordance
with clause 11.2(j);
(iii) payments made, or required to be made, to repay
Indebtedness or any other obligation outstanding at
the time of such Asset Sale that either (A) is
secured by an Encumbrance on the property or assets
sold, or (B) is required to be paid as a result of
such Asset Sale;
(iv) all distributions and other payments required to be
made to minority interest holders in a Restricted
Subsidiary or joint venture as a result of such Asset
Sale by or of such Restricted Subsidiary or joint
venture, or to any other Person (other than the
Borrower or a Restricted Subsidiary) owning a
beneficial interest in the assets disposed of in such
Asset Sale; and
(v) appropriate amounts to be provided by the Borrower or
any Restricted Subsidiary as a reserve against any
liabilities or obligations associated with such Asset
Sale, including pension and other post-employment
benefit liabilities, liabilities related to
environmental matters and liabilities under any
indemnification obligations associated with such
Asset Sale, all as determined in conformity with
GAAP; and
23
(b) with respect to any issuance or sale of Capital Stock, the
proceeds of such issuance or sale in the form of cash or cash
equivalents, including payments in respect of deferred payment
obligations (to the extent corresponding to the principal, but
not interest, component thereof) when received in the form of
cash or cash equivalents (except to the extent such
obligations are financed or sold with recourse to the Borrower
or any Restricted Subsidiary) and proceeds from the conversion
of other property received when converted to cash or cash
equivalents, net of attorneys' fees, accountants' fees,
underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees incurred
in connection with such issuance or sale and net of taxes paid
or payable as a result thereof. In the event that any
consideration for any Asset Sale that would otherwise
constitute Net Cash Proceeds is required to be held in escrow
pending determination of whether a purchase price adjustment,
indemnification or other payment or other similar adjustment
will be made, such consideration will become Net Cash Proceeds
only when and to the extent released from escrow to the
Borrower or a Restricted Subsidiary;
"NOTES" means any of the securities that are authenticated and
delivered under either of the Indentures;
"NOTES GUARANTEE" means any Guarantee of the Borrower's obligations
with respect to the Notes by a Permanent Guarantor or any Subsidiary
Guarantor (as defined in the Indentures);
"NORTEL" means Nortel Networks Corporation of Canada whose registered
office is at World Trade Centre, 000 Xx Xxxxxxx Xxxxxx West, 8th Floor,
Xxxxxxxx, Xxxxxx, Xxxxxx, X0X 0X0;
"NORTEL ENTITY" means any Affiliate, Associated Company or Subsidiary
of Nortel and/or Nortel Networks plc;
"NORTEL NETWORKS PLC" means company numbered 2515751 whose registered
office is at Maidenhead Office Park. Xxxxxxxxx Xxx, Xxxxxxxxxx,
Xxxxxxxxx, XX0 0XX;
"OBLIGOR" means the Borrower, each Subsidiary Guarantor and any
Purchaser providing security as envisaged in clause 5.8;
"OFFERING MEMORANDUM" means the final offering memorandum issued in
respect of each Indenture and "OFFERING MEMORANDA" means both of them;
"OFFICER" has the meaning given to it in the Indentures;
"OPTIONAL CURRENCY" means any currency of any of the Territories which
is freely transferable, freely convertible into Dollars and which is
dealt on the London Interbank Market;
24
"ORIGINAL SUPPLY CONTRACT" means the supply contract between Nortel
Networks plc (formerly Nortel plc)and the Borrower dated 28 May 1998;
"PERMANENT GUARANTOR" means a Restricted Subsidiary that irrevocably
guarantees the payment of the Notes and/or the Loan on an
unsubordinated basis provided that such guarantee may provide that it
shall be automatically and unconditionally released and discharged
upon:
(a) any sale, exchange or transfer (including by way of merger or
consolidation), to any Person not an Affiliate of the
Borrower, of all of the Borrower's and each Restricted
Subsidiary's Capital Stock in, or all or substantially all the
assets of, such Restricted Subsidiary (which sale, exchange,
transfer or other transaction is not prohibited by this
Agreement);
(b) the legal or covenant defeasance of the Notes or satisfaction
and discharge of this Agreement, subject to customary
contingent reinstatement provisions; or
(c) upon the merger or consolidation of the Permanent Guarantor
with and into the Borrower or another Permanent Guarantor that
is the surviving Person in such merger or consolidation;
"PERMITTED ENCUMBRANCES"
(i) Encumbrances for taxes, assessments, governmental charges or
claims not yet delinquent, or that in the aggregate are not
material, or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with
GAAP shall have been made;
(ii) statutory and common law Encumbrances of landlords, carriers,
warehousemen, mechanics, suppliers, materialmen or repairmen
or other similar Encumbrances arising in the ordinary course
of business and with respect to amounts not yet delinquent or
that have been bonded or are being contested in good faith by
appropriate proceedings promptly instituted and diligently
conducted and for which a reserve or other appropriate
provision, if any, as shall be required in conformity with
GAAP shall have been made;
(iii) Encumbrances incurred or deposits made in the ordinary course
of business in connection with workers' compensation,
unemployment insurance and other types of social security and
other similar legislation or other insurance-related
obligations (including, without limitation, pledges or
deposits securing liability to insurance carriers under
insurance or self-insurance arrangements);
(iv) Encumbrances incurred or deposits made to secure the
performance of tenders, bids, leases, licenses, obligations
for utilities, statutory or
25
regulatory obligations, bankers' acceptances, letters of
credit, surety and appeal bonds, government or other
contracts, completion guarantees, performance and
return-of-money bonds and other obligations of a similar
nature incurred in the ordinary course of business (exclusive
of obligations for the payment of borrowed money);
(v) easements, rights-of-way, municipal and zoning ordinances,
utility agreements, reservations, encroachments, restrictions
and similar charges, encumbrances, title defects or other
irregularities that do not materially interfere with the
ordinary course of business of the Borrower or any of its
Restricted Subsidiaries;
(vi) Encumbrances (including extensions, renewals and replacements
thereof) upon real or personal property or assets (including
leases on an indefeasible right-to-use basis); provided that:
1) such Encumbrance is created solely for the purpose of
securing Indebtedness Incurred as permitted under
clause 11.2(a);
2) the principal amount of the Indebtedness secured by
such Encumbrance does not exceed 100 per cent. of
such cost; and
3) any such Encumbrance shall not extend to or cover any
property or assets other than such item of property
or assets and any improvements, accessions or
proceeds in respect of such item;
(vii) leases, subleases, licenses or sublicenses granted to others
that do not materially interfere with the ordinary course of
business of the Borrower and its Restricted Subsidiaries,
taken as a whole;
(viii) Encumbrances encumbering property or assets under construction
(and related rights) in favour of a contractor or developer,
or arising from progress or partial payments by a customer of
the Borrower or its Restricted Subsidiaries relating to such
property or assets;
(ix) any interest or title of a lessor in the property subject to
any Capitalised Lease or operating lease;
(x) Encumbrances arising from filing Uniform Commercial Code
financing statements regarding leases;
(xi) Encumbrances (including extensions, renewals and replacements
thereof) on property or assets of, or on shares of Capital
Stock or Indebtedness of, any Person existing (in the case of
the original such Encumbrance) at the time such Person
becomes, or becomes a part of, any Restricted Subsidiary;
provided that such Encumbrances do not extend to or cover any
property or assets of the Borrower or any Restricted
Subsidiary other than the property, assets, Capital Stock or
Indebtedness so acquired (plus improvements, accessions or
proceeds (including dividends or distributions) in respect
thereof);
26
(xii) Encumbrances in favour of the Borrower or any Restricted
Subsidiary;
(xiii) Encumbrances arising from the rendering of a final judgment,
order, decree or award against the Borrower or any Restricted
Subsidiary that does not give rise to an Event of Default;
(xiv) Encumbrances securing reimbursement obligations with respect
to letters of credit that encumber documents and other
property relating to such letters of credit and the products
and proceeds thereof;
(xv) Encumbrances in favour of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
in connection with the importation of goods;
(xvi) Encumbrances encumbering customary initial deposits and margin
deposits, and other Encumbrances that are within the general
parameters customary in the industry and incurred in the
ordinary course of business, in each case, securing
Indebtedness or other obligations under Interest Rate
Agreements and Currency Agreements and forward contracts,
options, future contracts, futures options or similar
agreements or arrangements designed solely to protect the
Borrower or any of its Restricted Subsidiaries from
fluctuations in interest rates, currencies or the price of
commodities;
(xvii) Encumbrances arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods
entered into by the Borrower or any of its Restricted
Subsidiaries in the ordinary course of business;
(xviii) Encumbrances on or sales or transfers of receivables
(including related rights);
(xix) Encumbrances that secure Indebtedness or other obligations
with an aggregate principal amount not in excess of $5 million
at any time outstanding;
(xx) Encumbrances placed by any third party on property over which
the Borrower or any Restricted Subsidiary has easement or
other rights or on any leased property, or arising by reason
of subordination or similar agreements relating thereto; and
Encumbrances arising by reason of any condemnation or eminent
domain proceedings;
(xxi) Encumbrances on Capital Stock or other securities of an
Unrestricted Subsidiary that secure Indebtedness or other
obligations of such Unrestricted Subsidiary;
(xxii) any Encumbrance or restriction (including put and call
agreements) with respect to Capital Stock of any joint venture
or similar arrangement pursuant to any joint venture or
similar agreement;
27
(xxiii) Encumbrances (including extensions, renewals and replacements
thereof) on property or assets acquired by the Borrower or any
Restricted Subsidiary provided that:
(A) such Encumbrances were not created in connection with
or in anticipation of such acquisition;
(B) such Encumbrances do not secure Indebtedness other
than Indebtedness assumed in connection with such
acquisition; and
(C) such Encumbrances do not extend to or cover any
property or assets of the Borrower or any Restricted
Subsidiary other than the property or assets so
acquired (plus improvements, accessions or proceeds
in respect thereof); and
(xxiv) Encumbrances on cash set aside at the time of the Incurrence
of any Indebtedness, or government securities purchased with
such cash, in either case to the extent that such cash or
government securities pre-fund the payment of interest on such
Indebtedness and are held in an escrow account or similar
arrangement to be applied for such purpose;
"PERMITTED HOLDER" means any of the following: any of Providence Equity
Partners L.P., Providence Equity Partners II L.P., Providence Equity
Partners III L.P., Primus Capital Fund IV Limited Partnership and
Primus Executive Fund Limited Partnership and any of the respective
Affiliates or successors of the foregoing;
"PERMITTED INVESTMENT" means:
(a) an Investment in the Borrower (including the Notes) or a
Restricted Subsidiary or a Person which will, upon the making
of such Investment, become a Restricted Subsidiary or be
merged or consolidated with or into, or transfer or convey all
or substantially all its assets to, the Borrower or a
Restricted Subsidiary provided that such Person's primary
business is related, ancillary or complementary to the
businesses of the Borrower and its Restricted Subsidiaries on
the date of such Investment;
(b) Temporary Cash Investments;
(c) commissions, payroll, travel and similar advances to cover
matters that are expected at the time of such advances
ultimately to be treated as expenses in accordance with GAAP;
(d) stock, obligations, securities or other Investments received
(i) in satisfaction of judgments or (ii) in settlement of
debts, or as a result of foreclosure, perfection or
enforcement of any Encumbrance, in each case under this
paragraph (ii) arising in the ordinary course of business and
not in contemplation of the acquisition of such stock,
obligations, securities or other Investments;
28
(e) Investments in negotiable instruments held for collection,
lease, utility and worker's compensation, performance and
other similar pledges or deposits and other pledges or
deposits permitted under clause 11.2(g);
(f) obligations under Interest Rate Agreements and Currency
Agreements designed solely to protect the Borrower or its
Restricted Subsidiaries against fluctuations in interest rates
or foreign currency exchange rates;
(g) Investments in a joint venture to cover the Borrower's portion
of the cost (including the cost of design, development,
acquisition, construction, installation and improvement) of
building a telecommunications network (or network segment) in
Europe, provided that the Borrower or any of its Restricted
Subsidiaries will directly own their portion of such network
(or network segment); and Investments in joint ventures to
acquire or maintain or otherwise relating to any
rights-of-way, wayleaves, governmental approvals, licenses,
franchises or concessions relating to any such network (or
network segment);
(h) Investments in any Person in an aggregate amount not to exceed
25 per cent. of any gains (net of any losses) attributable to
Asset Sales after the Closing Date and prior to the date of
such Investment; and
(i) loans or advances to directors, officers or employees of the
Borrower or any Restricted Subsidiary that do not in the
aggregate exceed $3 million at any time outstanding;
"PERMITTED JOINT VENTURE" means any joint venture between the Borrower
or any Restricted Subsidiary and any Person other than a Subsidiary,
engaged in the provision or sale of telecommunications services, or in
any other business that is related, ancillary or complementary to the
provision or sale of telecommunications services, as determined in good
faith by the Board of Directors (whose determination shall be
conclusive if evidenced by a Board Resolution) provided that prior to
making any Investment in such a Person, the Borrower's Board of
Directors shall have determined that such Investment fits the
Borrower's strategic plan and is on terms that are fair and reasonable
to the Borrower;
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or
organisation, including a government or political subdivision or an
agency or instrumentality thereof;
"PLEDGE AGREEMENT" has the same meaning given to it in the Notes;
"PREFERRED STOCK" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however
designated, whether voting or non-voting) of such Person's preferred or
preference equity, whether now outstanding or issued after the Closing
Date, including all series and classes of such preferred stock or
preference stock;
29
"PURCHASER" means each Wholly Owned Subsidiary of the Borrower carrying
on a telecommunications business in any jurisdiction;
"QUALIFYING PERSON" means:
(a) any Nortel Entity; or
(b) a Person, being a bank or a financial institution (whether
incorporated in the United Kingdom or elsewhere),
which in each of cases (a) and (b) is eligible to have payments made to
it by the Borrower without any deduction or withholding in respect of
Taxes either:
(i) by virtue of a double taxation treaty; or
(ii) by virtue of the fact that the Borrower is not required to
make such a deduction or withholding;
"QUARTER DAY" means 31 March, 30 June, 30 September and 31 December in
any year;
"QUARTERLY PERIOD" means each period of approximately three months
commencing on the day after a Quarter Day and ending on the next
following Quarter Day;
"QUOTATION DATE" means, in relation to a period for which LIBOR is to
be determined, the date on which quotations would customarily be
provided by leading banks in the London Interbank Market for deposits
in the relevant currency for delivery on the first day of that period;
"REFERENCE BANKS" means the principal London offices of HSBC Investment
Bank plc and Barclays Bank plc and any other bank designated, from time
to time, as a Reference Bank by the Agent and the Borrower;
"RELEASED INDEBTEDNESS" means with respect to any Asset Sale:
(a) Indebtedness of the Borrower or any Restricted Subsidiary
which is assumed by the purchaser or any affiliate thereof in
connection with such Asset Sale provided that the Borrower or
the Restricted Subsidiary receives written, unconditional and
enforceable releases from each creditor of such Indebtedness
no later than the closing date of such Asset Sale; and
(b) Indebtedness of a Restricted Subsidiary that is no longer a
Restricted Subsidiary as a result of such Asset Sale provided
that neither the Borrower nor the Restricted Subsidiary
thereafter Guarantees such Indebtedness;
"RELEVANT AMOUNT" means:
30
(a) in respect of any date falling on or after the first Repayment
Date, but before the second Repayment Date an amount equal to
93.75 per cent. of the End of Term Amount;
(b) in respect of any date falling on or after the second
Repayment Date, but before the third Repayment Date an amount
equal to 87.5 per cent. of the End of Term Amount;
(c) in respect of any date falling on or after the third Repayment
Date, but before the fourth Repayment Date an amount equal to
81.25 per cent. of the End of Term Amount;
(d) in respect of any date falling on or after the fourth
Repayment Date, but before the fifth Repayment Date an amount
equal to 75 per cent. of the End of Term Amount;
(e) in respect of any date falling on or after the fifth Repayment
Date, but before the sixth Repayment Date an amount equal to
68.75 per cent. of the End of Term Amount;
(f) in respect of any date falling on or after the sixth Repayment
Date, but before the seventh Repayment Date an amount equal to
62.5 per cent. of the End of Term Amount;
(g) in respect of any date falling on or after the seventh
Repayment Date, but before the eighth Repayment Date an amount
equal to 56.25 per cent. of the End of Term Amount;
(h) in respect of any date falling on or after the eighth
Repayment Date, but before the ninth Repayment Date an amount
equal to 50 per cent. of the End of Term Amount;
(i) in respect of any date falling on or after the ninth Repayment
Date, but before the tenth Repayment Date an amount equal to
43.75 per cent. of the End of Term Amount;
(j) in respect of any date falling on or after the tenth Repayment
Date, but before the eleventh Repayment Date an amount equal
to 37.5 per cent. of the End of Term Amount;
(k) in respect of any date falling on or after the eleventh
Repayment Date, but before the twelfth Repayment Date an
amount equal to 31.25 per cent. of the End of Term Amount;
(l) in respect of any date falling on or after the twelfth
Repayment Date, but before the thirteenth Repayment Date an
amount equal to 25 per cent. of the End of Term Amount;
(m) in respect of any date falling on or after the thirteenth
Repayment Date, but before the fourteenth Repayment Date an
amount equal to 18.75 per cent. of the End of Term Amount;
31
(n) in respect of any date falling on or after the fourteenth
Repayment Date, but before the fifteenth Repayment Date an
amount equal to 12.5 per cent. of the End of Term Amount;
(o) in respect of any date falling on or after the fifteenth
Repayment Date, but before the sixteenth Repayment Date an
amount equal to 6.25 per cent. of the End of Term Amount;
(p) on or after the sixteenth Repayment Date, 0 per cent.;
"RELEVANT DATE" in respect of any particular clause or definition shall
have the meaning ascribed to it in that clause or definition by
reference to clause 1.9;
"RELEVANT JURISDICTION" means, as to the Borrower, any Restricted
Subsidiary or any Purchaser, each jurisdiction such person is
incorporated or formed or in which such person has its principal place
of business or owns any material assets;
"RELEVANT SUBSTANCE" means any substance whatsoever (whether in a solid
or liquid form or in the form of a gas or vapour and whether alone or
in combination with any other substance) or waste which is capable of
causing harm to man or any other living organism supported by the
environment, or damaging the environment or public health or welfare;
"REPAYMENT DATE" means 31 March 2001 and each Quarter Day thereafter up
to and including the Final Maturity Date;
"RESTRICTED PAYMENT" has the meaning given to it in clause 11.2(b);
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Borrower other than
an Unrestricted Subsidiary;
"SECURED ADVANCE" has the meaning given to it in clause 5.8;
"SECURED PURCHASER" has the meaning given to it in clause 5.8;
"SECURITIES ACT" means the Securities Act of 1933, as amended, of the
United States of America;
"SECURITY DOCUMENTS" means the Subsidiary Guarantees (if any) and all
mortgages, charges, pledges, guarantees or deeds and other instruments
from time to time entered into by any Security Provider in favour of
the Finance Parties (or any of them) by way of guarantee or other
assurance and/or security for amounts owed to the Finance Parties (or
any of them) under the Finance Documents including, but not limited to,
any mortgages, charges, pledges, guarantees or deeds and other
instruments from time to time entered into as envisaged in clause 5.8;
"SECURITY PROVIDERS" means the Subsidiary Guarantors and each and every
Purchaser who, at any time, provides any security to the Finance
Parties (or any of them) as contemplated by clause 5.8 or otherwise;
32
"SECURITY TRUST DEED" means any security trust deed which may be
entered into from time to time by, among others, the Security Trustee
under which the Security Trustee holds any and all security provided by
an Obligor pursuant to this Agreement and/ or under the Security
Documents;
"SECURITY TRUSTEE" means Nortel Networks Inc. and/or any other Person
as may be appointed as security trustee pursuant to the Security Trust
Deed;
"SIGNIFICANT SUBSIDIARY" means, at any date of determination, any
Restricted Subsidiary that, together with its Subsidiaries:
(a) for the most recent fiscal year of the Borrower, accounted for
more than 10 per cent. of the consolidated revenues of the
Borrower and its Restricted Subsidiaries; or
(b) as of the end of such fiscal year, was the owner of more than
10 per cent. of the consolidated assets of the Borrower and
its Restricted Subsidiaries, all as set forth on the most
recently available consolidated financial statements of the
Borrower for such fiscal year;
"SOFTWARE" means software developed or acquired by any Supplier or
other vendor and licensed to a Purchaser and includes:
(a) the machine executable object code version of the userloadable
programs of the infrastructure equipment;
(b) the microcode embedded in the infrastructure equipment;
(c) all related user documentation;
(d) any update or revision of these programs or the microcode
delivered to the Purchaser; and
(e) any copy of these items;
"STATED MATURITY" means:
(a) with respect to any debt security, the date specified in such
debt security as the fixed date on which the final instalment
of principal of such debt security is due and payable; and
(b) with respect to any scheduled instalment of principal of or
interest on any debt security, the date specified in such debt
security as the fixed date on which such instalment is due and
payable;
"STERLING" and "(pound)" mean the lawful currency for the time being of
the United Kingdom and in respect of all payments to be made under this
Agreement in Sterling mean immediately available, freely transferable
cleared funds;
"STRATEGIC SUBORDINATED INDEBTEDNESS" means Indebtedness of the
Borrower or any Permanent Guarantor Incurred to finance the acquisition
of a Person
33
engaged in a business that is related, ancillary or complementary to
the business conducted by the Borrower or any of its Restricted
Subsidiaries, which Indebtedness by its terms, or by the terms of any
agreement or instrument pursuant to which such Indebtedness is
Incurred:
(a) is expressly made subordinate in right of payment to the Loan;
and
(b) provides that no payment of principal, premium or interest on,
or any other payment with respect to, such Indebtedness may be
made prior to the payment in full of all of the Borrower's
obligations under the Notes or the Loan provided that such
Indebtedness may provide for and be repaid at any time from
the proceeds of a capital contribution or the sale of Capital
Stock (other than Disqualified Stock) of the Borrower after
the Incurrence of such Indebtedness;
"SUBSIDIARY" means, with respect to any Person, any corporation,
association or other business entity of which more than 50 per cent. of
the voting power of the outstanding Voting Stock is owned, directly or
indirectly, by such Person and one or more other Subsidiaries of such
Person;
"SUBSIDIARY GUARANTEE" means each guarantee (if any) of all or any
moneys, obligations and liabilities of the Borrower under or pursuant
to this Agreement given, from time to time, by a Subsidiary Guarantor;
"SUBSIDIARY GUARANTOR" means any Restricted Subsidiary who, from time
to time, provides a guarantee pursuant to clause 11.2(e)(i);
"SUPPLIER" means any Nortel Entity who may, from time to time, supply
or contract to supply Equipment to a Purchaser;
"SWITCH" means the common term for telecommunications hardware,
firmware and documentation purchased or to be purchased by the
Borrower;
"TAXES" includes all present and future taxes, levies, imposts, duties,
fees or other governmental charges of whatever nature together with
interest thereon and penalties in respect thereof and "TAXATION" shall
be construed accordingly;
"TELECOMMUNICATIONS LAWS" means, in relation to an Obligor or to any
Purchaser, all laws, statutes, regulations and judgments relating to
telecommunications and similar services applicable to such Obligor or
Purchaser and/or the business carried on by such Obligor or Purchaser
in any Relevant Jurisdiction of such Obligor or Purchaser;
"TEMPORARY CASH INVESTMENTS" means any of the following:
(a) direct obligations of the United States of America or any
agency thereof or obligations fully and unconditionally
guaranteed by the United States of America or any agency
thereof;
34
(b) bankers' acceptances, time deposit accounts, certificates of
deposit and money market deposits maturing within one year of
the date of acquisition thereof issued by a bank or trust
company which is organised under the laws of the United States
of America, any state thereof or any foreign country
recognised by the United States of America, and which bank or
trust company has capital, surplus and undivided profits
aggregating in excess of $50 million (or the foreign currency
equivalent thereof) and has outstanding debt which is rated
"A" (or such similar equivalent rating) or higher by at least
one nationally recognised statistical rating organisation or
any money-market fund sponsored by a registered broker dealer
or mutual fund distributor;
(c) repurchase obligations with a term of not more than 30 days
for underlying securities of the types described in paragraph
(a) above or paragraph (f) below entered into with a bank
meeting the qualifications described in paragraph (b) above;
(d) commercial paper, maturing not more than one year after the
date of acquisition, issued by a corporation (other than an
Affiliate of the Borrower) organised and in existence under
the laws of the United States of America, any state thereof or
any foreign country recognised by the United States of America
with a rating at the time as of which any investment therein
is made of "P-1" (or higher) according to Xxxxx'x or "A-1" (or
higher) according to S&P;
(e) securities with maturities of six months or less from the date
of acquisition issued or fully and unconditionally guaranteed
by any state, commonwealth or territory of the United States
of America, or by any political subdivision or taxing
authority thereof, and rated at least "A" by S&P or Xxxxx'x;
and
(f) direct obligations of, or obligations fully and
unconditionally guaranteed by:
(i) The Netherlands, the United Kingdom, France, Germany
or Switzerland; or
(ii) any other member of the European Economic Community
and rated at least "A" by S&P or Xxxxx'x;
"TERMINATION DATE" means 31 December 2000;
"TERRITORIES" means any country in which a Purchaser or the Borrower is
incorporated;
"TOTAL COMMITMENTS" means at any relevant time the total of the
Commitments of all the Lenders at such time;
"TRADE PAYABLES" means, with respect to any Person, any accounts
payable or any other Indebtedness or monetary obligation to trade
creditors created,
35
assumed or guaranteed by such Person or any of its Subsidiaries arising
in the ordinary course of business in connection with the acquisition
of goods or services;
"TRANSACTION DATE" means, with respect to the Incurrence of any
Indebtedness by the Borrower or any of its Restricted Subsidiaries, the
date such Indebtedness is to be Incurred and, with respect to any
Restricted Payment, the date such Restricted Payment is to be made;
"TRANSFER CERTIFICATE" means a certificate substantially in the terms
of schedule 5;
"TRANSFEREE" has the meaning given to it in clause 16.3;
"TRANSMISSION EQUIPMENT" means transmission equipment required for the
operation of a Switch;
"UNITS" has the meaning given to it in the Indentures;
"UNRESTRICTED SUBSIDIARY" means:
(a) any Subsidiary of the Borrower that, at the time of
determination, shall be designated an Unrestricted Subsidiary
by the Board of Directors in the manner provided by clause
1.7; and
(b) any Subsidiary of an Unrestricted Subsidiary;
"UNSECURED ADVANCE" has the meaning given to it in clause 5.8;
"UNSECURED PURCHASER" has the meaning given to it in clause 5.8;
"VAT" or "VALUE ADDED TAX" means value added tax chargeable in the
United Kingdom under the Value Added Tax Xxx 0000 or any similar tax
imposed in another jurisdiction;
"VOTING STOCK" means with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of
such Person;
"WARRANT AGREEMENTS" has the meaning given to it in the Indentures;
"WARRANTS" has the meaning given to it in the Indentures; and
"WHOLLY OWNED" means, with respect to any Subsidiary of any Person, the
ownership of all of the outstanding Capital Stock of such Subsidiary
(other than any director's qualifying shares or Investments by foreign
nationals mandated by applicable law) by such Person or one or more
Wholly Owned Subsidiaries of such Person.
1.3 HEADINGS
36
Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.4 CONSTRUCTION OF CERTAIN TERMS
In this Agreement, unless the context otherwise requires:
(a) references to clauses and schedules are to be construed as
references to the clauses of, and schedules to, this Agreement
and references to this Agreement include its schedules;
(b) references to (or to any specified provision of) this
Agreement or any other document shall be construed as
references to this Agreement, that provision or that document
as in force for the time being and as from time to time
amended in accordance with its terms, or, as the case may be,
with the agreement of the relevant parties and (where such
consent is, by the terms of this Agreement or the relevant
document, required to be obtained as a condition to such
amendment being permitted) the prior written consent of the
Agent, all of the Lenders or the Majority Lenders (as the case
may be);
(c) references to a "REGULATION" include any present or future
regulation, rule, directive, requirement, request or guideline
(whether or not having the force of law) of any agency,
authority, central bank or government department or any
self-regulatory or other national or supra-national authority;
(d) words importing the plural shall include the singular and vice
versa;
(e) references to a time of day are to London time;
(f) references to "ASSETS" include all or part of any business,
undertaking, real property, personal property, uncalled
capital and any rights (whether actual or contingent, present
or future) to receive, or require delivery of, any of the
foregoing;
(g) references to the "EQUIVALENT" of an amount specified in a
particular currency (the "SPECIFIED CURRENCY AMOUNT") shall be
construed as a reference to the amount of the other relevant
currency which can be purchased with the specified currency
amount in the London foreign exchange market at or about the
relevant time on the day on which the calculation falls to be
made for delivery on the relevant day as determined by the
Agent;
(h) references to the "AGREED FORM" means, in relation to any
document, the form of such document as shall have been agreed
between the Borrower and the Agent (acting reasonably for and
on behalf of all of the Lenders);
(i) any term which is used in this Agreement but not defined in
this Agreement or is defined in this Agreement but by
reference to or
37
incorporation of terms of the Indentures shall, if used and
defined in the Indentures, be incorporated from the Indentures
(as at the date of this Agreement) into this Agreement (with
any necessary changes) but shall be construed under and in
accordance with this Agreement;
(j) the words "INCLUDING", "INCLUDE" and "IN PARTICULAR" shall be
construed as being by way of emphasis and shall not limit the
generality of any foregoing words nor exclude any words not
included in any foregoing words; and
(k) references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended or
extended.
1.5 MAJORITY LENDERS
Where this Agreement provides for any matter to be determined by
reference to the opinion of the Majority Lenders or to be subject to
the consent or request of the Majority Lenders or for any action to be
taken on the instructions of the Majority Lenders, such opinion,
consent, request or instructions shall (solely as between the Lenders)
only be regarded as having been validly given or issued by the Majority
Lenders if all the Lenders shall have received prior notice of the
matter on which such opinion, consent, request or instructions are
required to be obtained and the relevant majority of Lenders shall have
given or issued such opinion, consent, request or instructions but so
that (as between the Obligors and the Lenders), once informed by the
Agent that such opinion, consent, request or instructions have been
given, the Obligors shall be entitled (and bound) to assume that such
notice shall have been duly received by each Lender and that the
relevant majority shall have been obtained to constitute Majority
Lenders whether or not this is in fact the case.
1.6 AGENT'S OPINION
Where this Agreement provides for the Agent's opinion to determine
whether any matter would or is reasonably likely to have a Material
Adverse Effect and/or a material adverse effect (as the case may be)
the Agent shall act in accordance with the instructions of the Majority
Lenders in making such determination.
1.7 UNRESTRICTED SUBSIDIARY
The Borrower may, from time to time, designate any Restricted
Subsidiary (including any newly acquired or newly formed Subsidiary of
the Borrower) to be an Unrestricted Subsidiary (unless such Subsidiary
owns any Capital Stock of, or owns or holds any Encumbrance on any
property of, the Borrower or any Restricted Subsidiary) provided that:
(a) either:
38
(i) the Subsidiary to be so designated has total assets
of $1,000 (or the equivalent in any other currency)
or less; or
(ii) if such Subsidiary has assets greater than such
amount, such designation would be permitted under
clause 11.2; and
(b) the related Incurrence of any Indebtedness and any Investment,
both as envisaged in clause 1.9 would be permitted under
paragraph 11.2;
(c) at the same time as making the designation it makes the same
designation under the Notes; and
(d) before the designation becomes effective, the designation is
authorised by the Board of Directors by way of Board
Resolution and a copy of such Board Resolution has been
provided to the Agent together with a Certificate certifying
that the designation complies with the foregoing provisions.
1.8 RESTRICTED SUBSIDIARY
The Borrower may, from time to time, designate any Unrestricted
Subsidiary to be a Restricted Subsidiary provided that:
(a) no Default or Event of Default shall have occurred and be
continuing at the time of or after giving effect to such
designation; and
(b) all Encumbrances and Indebtedness of such Unrestricted
Subsidiary outstanding immediately after such designation
would, if Incurred at such time, have been permitted to be
Incurred (and shall be deemed to have been Incurred) for all
purposes of this Agreement;
(c) at the same time as making the designation it makes the same
designation under the Notes; and
(d) before the designation becomes effective, the designation is
authorised by the Board of Directors by way of Board
Resolution and a copy of such Board Resolution has been
provided to the Agent together with a Certificate certifying
that the designation complies with the foregoing provisions.
1.9 GUARANTEE OF UNRESTRICTED SUBSIDIARY
Any Guarantee by the Borrower or by any Restricted Subsidiary of any
Indebtedness of the Subsidiary being designated an Unrestricted
Subsidiary under clause 1.7 shall be deemed an "Incurrence" of such
Indebtedness and an "Investment" by the Borrower or by such Restricted
Subsidiary (or both, if applicable) at the time of such designation.
1.10 CURRENCY EXCHANGE CALCULATIONS
39
(a) Where any provision of this Agreement requires the calculation
of the Dollar equivalent of an amount in an Optional Currency
as at a particular date (the "RELEVANT DATE") the Agent shall
determine the amount of Dollars which would be required to
purchase the amount of such Optional Currency by reference to
the exchange rate displayed on relevant Bloomberg Page (or any
equivalent successor to that page) in respect of the Relevant
Date.
(b) If, in respect of any Relevant Date, the relevant exchange
rate is not displayed on the relevant Bloomberg Page (or any
equivalent successor to that page) then the exchange rate
shall be the average of the spot rates of exchange quoted to
the Agent by the Reference Banks to be ruling in the London
Foreign Exchange Market on the Relevant Date.
40
2 THE FACILITY
2.1 AMOUNT
(a) The Lenders, relying upon each of the representations and
warranties in clause 10 agree to lend to the Borrower upon and
subject to the terms of this Agreement the lesser of:
(i) the principal sum of $75,000,000; and
((ii)) ((A)) 100 per cent. of the price paid (exclusive
of any Value Added Tax) (and where such
payment is made in an Optional Currency the
Relevant Date for the purposes of clause
1.10 shall be the date of payment) or
payable to any Supplier for (and where such
payment is to be made in an Optional
Currency the Relevant Date for the purposes
of clause 1.10 shall be at or about 11a.m. 5
Banking Days before the relevant Drawdown
Date) the supply of Equipment by such
Supplier to the Purchasers on or before 31
December 1999; plus
(B) up to $12 million in respect of the price
paid (exclusive of any Value Added Tax) (and
where such payment is made in an Optional
Currency the Relevant Date for the purposes
of clause 1.10 shall be the date of payment)
or payable (and where such payment is to be
made in an Optional Currency the Relevant
Date for the purposes of clause 1.10 shall
be at or about 11a.m. 5 Banking Days before
the relevant Drawdown Date) to any vendor
other than a Supplier for the supply of
Equipment by any such vendor to the
Purchasers on or before the same date,
and at any relevant time such amount shall be the "FACILITY
AMOUNT" (or its equivalent in Optional Currencies).
(b) The obligation of each Lender under this Agreement shall be to
contribute that proportion of each Advance which, as at the
Drawdown Date of such Advance, its Commitment bears to the
Total Commitments.
2.2 OBLIGATIONS SEVERAL
(a) The obligations of each Lender under this Agreement are
several.
(b) The failure of any Lender to perform its obligations under
this Agreement shall not relieve any other Finance Party or
the Borrower of any of their respective obligations or
liabilities under this Agreement nor shall the Agent or the
Security Trustee be responsible for the obligations of any
Lender (except for its own obligations, if any, as a Lender)
nor
41
shall any Lender be responsible for the obligations of any
other Lender under this Agreement.
2.3 INTERESTS SEVERAL
(a) Notwithstanding any other term of this Agreement (but without
prejudice to the provisions of this Agreement relating to or
requiring action by the Majority Lenders and without prejudice
to clause 17.14) the interests of each Finance Party are
several and the amount due to the Agent (for its own account),
to the Security Trustee and to each Lender is a separate and
independent debt.
(b) Each Finance Party shall have the right to protect and enforce
its rights arising out of this Agreement and it shall not be
necessary for any other Finance Party to be joined as an
additional party in any proceedings for this purpose.
42
3 CONDITIONS
3.1 DOCUMENTS AND EVIDENCE
The obligation of each Lender to make its Commitment available shall be
subject to the condition that the Agent, or its duly authorised
representative, shall have received not later than five Banking Days
before the day on which the first Advance is to be made, the documents
and evidence specified in part A of schedule 3 in form and substance
satisfactory to all of the Lenders.
3.2 GENERAL CONDITIONS PRECEDENT
The obligation of each Lender to contribute to any Advance is subject
to the further conditions that at the date of each Drawdown Notice and
on each Drawdown Date:
(a) the representations and warranties set out in clause 10.1
(adjusted in accordance with clause 10.2) are true and correct
on and as of each such date as if each were made with respect
to the facts and circumstances existing at such date;
(b) no Default shall have occurred and be continuing or would
result from the making of such Advance; and
(c) such Advance, if made, would not result in the Dollar Amount
of the Loan exceeding the Facility Amount (and for the
purposes of making this calculation the Relevant Date under
clause 1.10 shall be at or about 11a.m. two Banking Days
before the proposed Drawdown Date).
3.3 WAIVER OF CONDITIONS PRECEDENT
The conditions specified in this clause 3 are inserted solely for the
benefit of the Lenders and may be waived on their behalf in whole or in
part and with or without conditions by the Agent acting on the
instructions of all of the Lenders in respect of the first Advance to
the Borrower and on the instructions of the Majority Lenders with
respect to any other Advances without prejudicing the right of the
Agent acting on such instructions to require fulfilment of such
conditions in whole or in part in respect of any other Advance.
3.4 NOTIFICATION
The Agent shall notify the Lenders and the Borrower promptly after
receipt by it of the documents and evidence referred to in clause 3.1
in form and substance satisfactory to all the Lenders or the Majority
Lenders (as the case may be).
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4 ADVANCES; CURRENCIES
4.1 MAXIMUM OUTSTANDINGS
No Advance shall be made if:
(a) following the making of such Advance, the Facility Amount
applicable at the time of such Advance would be exceeded;
(b) if the making of such Advance would result in more than two
Advances being outstanding in respect of a Purchaser; or
(c) 40 or more Advances have already been made.
4.2 PURPOSE OF ADVANCES
Advances may only be drawn by the Borrower for the following purposes:
(a) to finance amounts due to any Supplier in consideration for
Equipment and related services provided to any Purchaser on or
before 31 December 1999 ("SUPPLIER FINANCING");
(b) to refinance (including to replace) amounts paid to any
Supplier in consideration for Equipment and related services
provided to any Purchaser on or before 31 December 1999
("SUPPLIER REFINANCING");
(c) subject to the monetary cap in clause 2.1(a)(ii)(B), to
finance amounts due or paid to vendors other than Suppliers in
consideration for Equipment and related services to be
provided by them to any Purchaser on or before 31 December
1999 ("NON-SUPPLIER FINANCING"); and
(d) subject to the monetary cap in clause 2.1(a)(ii)(B), to
refinance (including to replace) amounts paid to vendors other
than Suppliers in consideration for Equipment and related
services provided by them to any Purchaser on or before 31
December 1999 ("NON-SUPPLIER REFINANCING").
4.3 DRAWDOWN
(a) In respect of each Advance the Drawdown Notice shall specify:
(i) the Purchaser of the Equipment; and
(ii) the relative supply contract,
in relation to which the proposed Advance is to be made.
(b) A Drawdown Notice shall not specify more than one Purchaser,
one supply contract or one currency.
44
(c) Subject to the terms and conditions of this Agreement, an
Advance shall be made available to the Borrower following
receipt by the Agent from the Borrower of a Drawdown Notice:
(i) in respect of Supplier Financing, substantially in
form and substance the same as that appearing in
schedule 2, part A;
(ii) in respect of Supplier Refinancing, substantially in
form and substance the same as that appearing in
schedule 2, part B;
(iii) in respect of Non-Supplier Financing, substantially
in form and substance the same as that appearing in
schedule 2, part C; and
(iv) in respect of Non-Supplier Refinancing, substantially
in form and substance the same as that appearing in
schedule 2, part D,
not later than 10 a.m. on the fifth Banking Day before the
proposed Drawdown Date. Each Drawdown Notice shall be
effective on actual receipt by the Agent and, once given,
shall, except as provided in clause 5.7(a), be irrevocable.
(d) Each Drawdown Notice in respect of an Advance shall be
accompanied by a copy certified as a true, complete and
up-to-date copy by two Officers of the Borrower of:
(i) each and every invoice relative to the Equipment to
which the prospective Advance relates evidencing, in
a manner reasonably satisfactory to the Agent, that
the amount to be drawn down is due and payable or has
already been paid as contemplated in clause 4.2; and
(ii) each and every Interconnect Agreement entered into
by, and each and every material Licence granted to,
the Purchaser in respect of whom the Advance has been
requested together with a certificate signed by two
Officers of the Borrower certifying that the
Interconnect Agreements and such Licences are in full
force and effect in all material respects.
(e) The Borrower irrevocably authorises the Agent to remit the
proceeds of any Advance requested for the purpose of Supplier
Financing at such bank and such bank account as shall be
notified, from time to time, by or on behalf of Nortel
Networks plc to the Agent and the Borrower acknowledges that
such payment by the Agent shall constitute the making of such
Advance to the Borrower by the Lenders.
4.4 AMOUNT
Each Advance shall be:
(a) of a Dollar Amount which is a minimum of $1,000,000 but no
Advance may be drawn down on any day of a Dollar Amount
exceeding the
45
Available Facility Amount on such day and for this purpose any
other Advance which is the subject of a current Drawdown
Notice shall be taken into account; and
(b) denominated in one currency only.
4.5 SELECTION OF CURRENCIES
Subject to the provisions of clause 4.6 each Advance may be drawn down
in any Optional Currency provided that an Advance shall only be made to
the Borrower in respect of a Purchaser in Dollars, euros or the legal
currency of the country of incorporation of such Purchaser.
4.6 CURRENCY AMOUNTS
(a) If an Advance is to be drawn down in an Optional Currency, the
Lenders shall, subject to clause 3.2, advance to the Borrower
on drawdown of such Advance, the amount of such Optional
Currency requested.
(b) The Dollar Amount of any Advance under clause 4.6(a) shall be
the amount of Dollars (as determined by the Agent) which would
be required to purchase the amount of such Optional Currency
at the rates of exchange:
(i) displayed on relevant Bloomberg Page (or any
equivalent successor to that page) on the Relevant
Date; or
(ii) if the relevant exchange rate is not displayed on the
relevant Bloomberg Page (or any equivalent successor
to that page) on the Relevant Date then the exchange
rate shall be the average of the spot rates of
exchange quoted to the Agent by the Reference Banks
to be ruling in the London Foreign Exchange Market on
the Relevant Date,
in each case for the purchase of such Optional Currency with
Dollars (and for the purposes of this clause the Relevant Date
under clause 1.10 shall be at or about 11 a.m. on the fifth
Banking Day before the proposed Drawdown Date).
(c) The Dollar Amount of the Loan on any relevant day shall be the
aggregate of:
(i) the Dollar Amount of the outstanding Advances
denominated in Dollars; plus
(ii) the amount of Dollars which would be required to
purchase the aggregate amount of all outstanding
Advances denominated in any Optional Currency at the
rates of exchange:
46
(A) displayed on the relevant Bloomberg Page (or
any equivalent successor to that page) on
the Relevant Date; or
(B) if the relevant exchange rate is not
displayed on the relevant Bloomberg Page (or
any equivalent successor to that page) on
the Relevant Date then the exchange rate
shall be the average of the spot rates of
exchange quoted to the Agent by the
Reference Banks to be ruling the London
Foreign Exchange Market on the Relevant
Date,
in each case for the purchase of such Optional
Currency with Dollars (and for the purposes of this
clause the Relevant Date under clause 1.9 shall be at
or about 11 a.m. on the fifth Banking Day before the
proposed Drawdown Date).
4.7 NOTIFICATION TO LENDERS
As soon as practicable after receipt of a Drawdown Notice complying
with the terms of this Agreement the Agent shall notify each Lender
and, subject to clause 3, each of the Lenders shall on the Drawdown
Date make available to the Agent its portion of the relevant Advance in
accordance with clause 8.2.
4.8 APPLICATION OF PROCEEDS
Without prejudice to the Borrower's obligations under this Agreement,
none of the Finance Parties shall have any responsibility for the
application of the proceeds of any Advance by the Borrower.
47
5 INTEREST; ALTERNATIVE INTEREST RATES
5.1 NORMAL INTEREST RATE
The Borrower shall pay interest in arrears on each Advance made to it
in respect of each Interest Period on the relevant Interest Payment
Date at the rate per annum equal to the aggregate of:
(a) the Margin;
(b) the Additional Cost (if any); and
(c) LIBOR,
with respect to such Interest Period.
5.2 SELECTION OF INTEREST PERIODS
Each Borrower may by notice received by the Agent not later than 10 am
on the fifth Banking Day before the beginning of each Interest Period
in respect of an Advance made to it select a duration of one, two,
three or six months.
5.3 DETERMINATION OF INTEREST PERIODS
Every Interest Period shall be of the duration specified by the
Borrower in accordance with clause 5.2 but so that:
(a) the initial Interest Period in respect of each Advance will
commence on the date on which such Advance is made and each
subsequent Interest Period in respect of such Advance will
commence forthwith upon the expiry of the previous Interest
Period;
(b) if an Interest Period would otherwise overrun;
(i) the Final Maturity Date;
(ii) the Termination Date; or
(iii) any other Repayment Date,
such Interest Period shall end on such date; and
(c) if the Borrower fails to specify the duration of an Interest
Period in accordance with the provisions of clause 5.2 such
Interest Period shall have a duration of 1 month or such other
period as the Agent may determine as shall comply with this
clause 5.3.
5.4 DEFAULT INTEREST
(a) If the Borrower fails to pay any sum on its due date for
payment under this Agreement, the Borrower shall pay interest
on such sum from the
48
due date up to the date of actual payment (both before and
after judgment) at the rate determined by the Agent pursuant
to this clause 5.4.
(b) The period beginning on such due date and ending on such date
of payment shall be divided into successive periods of not
less than 3 months and not more than 6 months as selected by
the Agent (after consultation with the Lenders) each of which
(other than the first, which shall commence on such due date)
shall commence on the last day of the preceding such period.
(c) The rate of interest applicable to each such period shall be
the aggregate of:
(i) 1 per cent. per annum;
(ii) the Margin;
(iii) the Additional Cost (if any); and
(iv) LIBOR.
(d) Such interest shall be due and payable on the last day of each
such period as determined by the Agent and each such day
shall, for the purposes of this Agreement, be treated as an
Interest Payment Date.
5.5 NOTIFICATION OF INTEREST RATE
The Agent shall notify the Borrower and the Lenders promptly of the
duration of each Interest Period or other period for the calculation of
interest (or, as the case may be, default interest) and of each rate of
interest calculated by it under this clause 5.
5.6 REFERENCE BANK QUOTATIONS
If any Reference Bank is unable or otherwise fails to furnish a
quotation for the purpose of calculating LIBOR, (if there is more than
one Reference Bank) the interest rate for the relevant Interest Period
or other period shall be determined, subject to clause 5.7, on the
basis of the quotations furnished by the remaining Reference Banks.
5.7 MARKET DISRUPTION; NON-AVAILABILITY
(a) If and whenever, at any time prior to the making of any
Advance or the commencement of any Interest Period in respect
of an outstanding Advance the Agent:
(i) shall have determined, after consultation with the
Reference Banks (which determination shall, in the
absence of manifest error, be conclusive), that
adequate and fair means do not exist for ascertaining
LIBOR during such Interest Period; or
49
(ii) the Reference Banks do not supply the Agent with a
quotation for the purpose of calculating LIBOR; or
(iii) shall have received notification from Lenders with
Commitments aggregating not less than one-third of
the Total Commitments that deposits in the relevant
currency are not available to such Lenders in the
London Interbank Market in the ordinary course of
business in sufficient amounts to fund their
contributions to the relevant Advance for such
Interest Period or that LIBOR does not accurately
reflect the cost to such Lenders of obtaining such
deposits,
the Agent shall forthwith give notice (a "DETERMINATION
NOTICE") to the Borrower and to each of the Lenders by telefax
or by telephone (in which case followed in writing) containing
particulars of the relevant circumstances giving rise to its
issue. After a Determination Notice is served the undrawn
amount of the Total Commitments shall not be borrowed until:
(A) notice to the contrary is given to the
Borrower by the Agent (which notice shall be
given by the Agent at such time as none of
the circumstances specified in clause 5.7(a)
continues to exist); or
(B) if earlier, a Substitute Basis is agreed
between the Agent and the Borrower;
(b) During the period of 10 days after any Determination Notice
has been given by the Agent under clause 5.7(a), each Lender
shall certify an alternative basis (the "SUBSTITUTE BASIS")
for making available or, as the case may be, maintaining its
Contribution to the affected Advance. The Substitute Basis may
include alternative interest periods, alternative currencies
or alternative rates of interest but shall include a margin
above the cost of funds including the Additional Cost, if any,
to such Lender equivalent to the Margin.
(c) Each Substitute Basis shall be binding upon the Obligors and
shall take effect in accordance with its terms from the date
specified in the Determination Notice until such time as none
of the circumstances specified in clause 5.7(a) continues to
exist whereupon the normal interest rate fixing provisions of
this Agreement shall apply.
5.8 SECURED/ UNSECURED ADVANCES AND CALCULATION OF MARGIN
(a) Unless otherwise determined in accordance with this clause
5.8, each Purchaser shall be an Unsecured Purchaser and each
Advance shall be an Unsecured Advance.
(b) The Margin applicable:
(i) to an Unsecured Advance shall be 5 per cent. per
annum; and
50
(ii) to a Secured Advance, shall be, subject to clause
5.8(e), 4 per cent. per annum.
(c) In respect of the first Advance relative to each Purchaser, if
the following documentation is provided to the Agent prior to
the delivery of the Drawdown Notice for such Advance then such
Purchaser and such Advance shall be designated a Secured
Purchaser and a Secured Advance respectively:
(i) first ranking security reasonably acceptable to the
Agent (as confirmed in writing (not more than two
Banking Days before the Drawdown Notice relative to
such Advance) to the Borrower by the Agent by way of
a letter in the form or substantially in the form of
the letter set out in schedule 7) has been provided
in favour of the Security Trustee by such Purchaser
over all the Equipment supplied or to be supplied to
such Purchaser and financed or to be financed under
the Facility; and
(ii) the documents and evidence specified in part B of
schedule 3 in form and substance satisfactory to the
Lenders.
(d) Each Advance made in respect of a Secured Purchaser shall be a
Secured Advance.
(e) Without prejudice to any other right of the Lenders under this
Agreement, if, at any time, the Agent is not reasonably
satisfied that the security reasonably provided by a Secured
Purchaser fully secures, by way of first ranking security
reasonably acceptable to the Agent, the Secured Advances made
or to be made in respect of such Secured Purchaser, then the
Agent shall give notice to the Borrower that it must remedy
such situation to the reasonable satisfaction of the Agent and
if, within 30 days of such notice, the Borrower does not
remedy such situation to the reasonable satisfaction of the
Agent, then upon the expiry of such 30 day period the Agent
shall give the Borrower notice of such fact whereupon the
Secured Advances in respect of the relevant Purchaser shall
immediately become prepayable under clause 6.4 and such
Purchaser shall irrevocably be re-designated as an Unsecured
Purchaser.
51
6 REPAYMENT, PREPAYMENT AND CANCELLATION
6.1 REPAYMENT
The Borrower shall repay each Advance in the currency in which it is
denominated in sixteen equal instalments on each consecutive Repayment
Date.
6.2 VOLUNTARY PREPAYMENT
The Borrower may, without premium or penalty, prepay any Advance made
to the Borrower in whole or in part (provided that, in the case of
part, the Dollar Amount of such part is a minimum of $1,000,000 and
integral multiples of $500,000) on any Interest Payment Date relating
to such Advance subject to the provisions of this clause 6.
6.3 APPLICATION OF PREPAYMENTS
Subject to clauses 5.8(e) and 6.8(b), any amounts prepaid after the
Termination Date shall be applied pro rata in reducing the repayment
instalments referred to in clause 6.1 and may not be redrawn.
6.4 AMOUNTS PAYABLE ON PREPAYMENT
Any prepayment under this Agreement shall be made in the currency in
which the relevant Advance is then denominated together with:
(a) accrued interest to the date of prepayment on the amount to be
prepaid;
(b) any additional amount payable under clause 8.5 or 14.2; and
(c) all other sums due and payable by the Borrower to the relevant
Lender under this Agreement including any amounts payable
under clause 13.1.
6.5 NOTICE OF PREPAYMENT
(a) No voluntary prepayment may be effected under this clause 6
unless the Borrower shall have given the Agent at least 5
Banking Days' notice of its intention to make such prepayment.
(b) Every notice of prepayment shall be effective only on actual
receipt by the Agent, shall be irrevocable and shall oblige
the Borrower to make such prepayment on the date specified.
6.6 CANCELLATION OF COMMITMENTS
(a) The Borrower may at any time during the Drawdown Period by
notice to the Agent (effective only on actual receipt) cancel
with effect from a date not less than 5 Banking Days after the
receipt by the Agent of such notice the whole or any part
(provided that, in the case of part, the Dollar Amount of such
part is a minimum of $1,000,000 and integral multiples of
$500,000) of the Total Commitments provided that any
commitment
52
commission accrued under clause 7.1(b) on the amount that is
cancelled shall be payable by the Borrower to the Agent under
this Agreement on the date of cancellation.
(b) Any such notice of cancellation, once given, shall be
irrevocable and upon such cancellation taking effect the
Commitment of each Lender shall be reduced proportionately.
6.7 TERMINATION OF COMMITMENTS
Without prejudice to any other term of this Agreement, any part of the
Commitments which is undrawn and uncancelled on the Termination Date
shall thereupon be automatically reduced to zero and no Advance shall
be made to the Borrower thereafter.
6.8 MANDATORY PREPAYMENTS/CANCELLATION
(a) If, on any Interest Payment Date:
(i) on or prior to the Termination Date, the Dollar
Amount (as recalculated by the Agent in respect of
such date) of the Advance or Advances (the "RELEVANT
ADVANCES") relative to such Interest Payment Date
when aggregated with the Dollar Amount (as calculated
as at the date of the Advance) of all other Advances
exceeds $78.75 million then the Borrower shall
forthwith following notice from the Agent prepay, pro
rata, the Relevant Advances such that the Dollar
Amount of the Loan is reduced to a level not
exceeding $78.75 million; and
(ii) after the Termination Date, the Agent reasonably
decides (the reasonableness of such decision being
assessed in relation to the extent of material
currency fluctuations during the relevant period) to
recalculate the Dollar Amount of the entire Loan,
then if the Agent notifies the Borrower that the
Dollar Amount of the Loan on such date exceeds 105
per cent. of the Relevant Amount on such date then
the Borrower shall forthwith prepay, pro rata, the
Advance or Advances relative to such Interest Payment
Date such that the Dollar Amount of the Loan is
reduced to a level not exceeding 105 per cent. of the
Relevant Amount on such date provided that the Agent
may not make more than one such notification under
this clause 6.8(a)(ii) in any period of 12 calendar
months.
(b) If, in respect of Equipment over which or in respect of which
the Security Trustee holds or has the benefit of security
pursuant to clause 5.8, net sale proceeds or insurance
proceeds are received by any Purchaser which are not
reinvested in purchasing replacement Equipment within 365 days
and those net proceeds or insurance proceeds, when aggregated
with other net sale proceeds or insurance proceeds received or
receivable by such Purchaser or any other Purchaser (the
"AGGREGATE AMOUNT") and
53
not so reinvested within 365 days and not previously applied
in accordance with this clause 6.8(b), exceed an amount
equivalent to $1,000,000 then:
(i) on or prior to the Termination Date and in respect of
that part of the Total Commitment which is undrawn
and uncancelled at such date, the Total Commitment
shall thereupon be automatically reduced by an amount
equal to the Aggregate Amount;
(ii) on and prior to the Termination Date, if and to the
extent that the Aggregate Amount exceeds the Total
Commitment which is undrawn and uncancelled at such
date, then the Borrower (on such date if such date is
an Interest Payment Date or on the next Interest
Payment Date if it is not) shall prepay an amount
equal to such excess and the provisions of clause 6.4
shall apply;
(iii) after the Termination Date, the Borrower (on such
date if such date is an Interest Payment Date or on
the next Interest Payment Date if it is not) shall
prepay an amount equal to the Aggregate Amount which
shall be applied:
(A) first, pro rata in pre-payment of the
Secured Advances; and
(B) secondly, pro rata in pre-payment of the
Unsecured Advances,
and the provisions of clause 6.4 shall apply;
(c) Subject to clauses 6.8(d), (e) and (f), within 180 days:
(i) of receipt, the Borrower shall apply an amount
equivalent to the net proceeds of:
(A) any Indebtedness for Borrowed Money Incurred
by the Borrower or any Restricted Subsidiary
of the Borrower (other than Indebtedness for
Borrowed Money Incurred by the Borrower or
any Subsidiary to any other member of the
Group); or
(B) the issue of equity by the Borrower or any
Subsidiary of the Borrower to a Person who
is not the Borrower or a Subsidiary of the
Borrower;
(ii) of receipt by or on behalf of the Noteholders of any
monies by way of fee (howsoever described) the
receipt and amount of which is not expressly
contemplated in the Notes at the date of this
Agreement, an amount equivalent to the amount of
receipt,
in prepayment of the Loan and clause 6.4 shall apply.
54
(d) Indebtedness for Borrowed Money Incurred by the Borrower or
the issue of equity by the Borrower to a Person who is not the
Borrower or a Subsidiary of the Borrower shall not trigger the
mandatory prepayment provisions of clause 6.8(c) if and to the
extent that the Agent is reasonably satisfied on evidence
produced by the Borrower that the net proceeds of such
Indebtedness for Borrowed Money or issue of equity are used to
finance the purchase of Equipment (and other capital assets)
the acquisition of which is:
(i) incremental to the overall acquisition of Equipment
by the Borrower envisaged in the Business Plan; and
(ii) provided that any security granted in respect of such
Indebtedness for Borrowed Moneyor the issue of equity
is limited to such Equipment (or such other capital
assets).
(e) Indebtedness for Borrowed Money Incurred by the Borrower by
way of a vendor financing of Equipment supplied or to be
supplied by such vendor to the Borrower, shall not trigger the
mandatory prepayment provisions of clause 6.8(c) if and to the
extent that:
(i) the proceeds of such Indebtedness for Borrowed Money
are used to finance the purchase of Equipment
supplied by such vendor; and
(ii) such financing is advanced or made available from
such vendor (or the Holding Company or a Subsidiary
of such vendor) direct to the Borrower or such
Restricted Subsidiary without the benefit to the
vendor (or such Holding Company or such Subsidiary),
whether directly or indirectly, of any collateral
financial support, participation or Guarantee in
respect of the vendor's (or such Holding Company's or
such Subsidiary's) obligations in respect of such
Indebtedness for Borrowed Money,
and provided that any security granted in respect of such
Indebtedness for Borrowed Money is limited to such Equipment.
(f) After the date of this Agreement, Indebtedness for Borrowed
Money Incurred in respect of receivables or for working
capital purposes (including any financing or sale of
receivables) by the Borrower the net proceeds of which do not
exceed an amount equivalent to $100 million in aggregate and
in respect of which:
(i) the value of the receivables disposed of; and
(ii) the value of the receivables over which security is
provided in relation to such Indebtedness for
Borrowed Money,
does not exceed an amount equivalent to $75 million in
aggregate, shall not trigger the mandatory prepayment
provisions of clause 6.8(c). The
55
value of such receivables shall be calculated at the time
of disposition or grant of the applicable security and
shall equal the book value of such receivables as shown on
the most recent consolidated financial statements of the
Borrower prepared in accordance with GAAP.
6.9 ADDITIONAL MANDATORY PREPAYMENTS
The Borrower shall also make mandatory prepayments as required under
clause 11.2(j)(ii)(B).
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7 FEES AND EXPENSES
7.1 FEES
The Borrower shall pay, or procure the payment, to the Agent whether or
not any part of the Commitments is ever advanced:
(a) as a condition precedent to the drawdown of the first Advance
for the account of Nortel Networks plc, a facility fee of an
amount agreed between the Borrower and the Agent in a letter
dated the date hereof; and
(b) in arrears on 31 December 1999 on each Quarter Day thereafter
during the Drawdown Period and on the last day of the Drawdown
Period, for the account of each Lender, commitment commission
computed from 1 October 1999 at the rate of 0.50 per cent. per
annum on the average daily undrawn and uncancelled amount of
such Lender's Commitment (assuming for the purposes of this
calculation only that the Total Commitment is $75,000,000); if
an Advance is outstanding in an Optional Currency, the amount
of the Commitments treated as drawn for the purpose of
calculating commitment commission shall be the Dollar Amount
of such Advance calculated at the date of such Advance.
7.2 EXPENSES
The Borrower shall pay, or procure the payment, to the Agent on demand:
(a) all reasonable expenses (including reasonable legal, printing
and out-of-pocket expenses of one firm of counsel in each
Relevant Jurisdiction) incurred by the Agent and the Security
Trustee in connection with the negotiation, preparation and
execution of this Agreement and any Security Documents and of
any amendment or extension of, or the granting of any waiver
or consent under, this Agreement or any Security Documents;
and
(b) all expenses (including legal and out-of-pocket expenses)
incurred by any Finance Party in contemplation of, or
otherwise in connection with, the enforcement or attempted
enforcement of, or preservation or attempted preservation of
any rights under, this Agreement and/or any Security
Documents, including after the occurrence of a Default or if
otherwise agreed with the Borrower, the fees and expenses of
accountants or other experts incurred in relation to any
investigation into the affairs of any Obligor, or otherwise in
respect of the moneys owing under this Agreement and/or any
Security Documents.
7.3 VALUE ADDED TAX
All fees and expenses payable pursuant to this clause 7 shall be paid
together with an amount equal to any Value Added Tax payable by any of
the Finance Parties in respect of such fees and expenses to the extent
that such Value Added Tax is not recoverable by such Finance Party by
way of credit or repayment.
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7.4 STAMP AND OTHER DUTIES
The Borrower shall pay all stamp, documentary, registration or other
similar duties or Taxes imposed on or in connection with the execution
and delivery of this Agreement and/or the Security Documents (other
than those imposed by reason of any transfer by any Lender) and shall
indemnify the Finance Parties against any liability arising by reason
of any delay or omission by the Borrower to pay such duties or Taxes.
7.5 OTHER VALUE ADDED TAX
(a) All payments made or to be made by the Borrower under this
Agreement are to be made exclusive of Value Added Tax.
(b) If the Borrower makes a payment to any Finance Party for a
taxable or deemed taxable supply by the Finance Party or
otherwise, the Borrower shall upon receipt of the appropriate
Value Added Tax invoice, pay, in addition to the
consideration, an amount equal to the amount of the Value
Added Tax which is chargeable on the Finance Party in respect
of the taxable supply in question.
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8 PAYMENTS AND TAXES; ACCOUNTS AND CALCULATIONS
8.1 NO SET-OFF OR COUNTERCLAIM; DISTRIBUTION TO THE LENDERS
All payments to be made by the Obligors under this Agreement and/or the
Security Documents shall be made in full, without any set-off or
counterclaim whatsoever and, subject as provided in clause 8.5, free
and clear of any deductions or withholdings, in Dollars or the relevant
Optional Currency (except for costs, charges or expenses which shall be
payable in the currency in which they are incurred) on the due date to
the account of the Agent at such bank as the Agent may from time to
time specify for this purpose. Save where this Agreement and/or the
Security Documents provide for a payment to be made for the account of
the Agent (for its own account), the Security Trustee (for its own
account) or a particular Lender (including clauses 6.3, 7, 8.5, 13.1,
13.2, 14.1 and 14.2), in which case the Agent shall distribute the
relevant payment to the Lender concerned, payments to be made by any
Obligor under this Agreement and/or the Security Documents shall be for
the account of all the Lenders and the Agent shall forthwith distribute
such payments in like funds as are received by the Agent to the Lenders
rateably in accordance with their Commitments or Contributions, as the
case may be.
8.2 PAYMENTS BY THE LENDERS
All sums to be advanced by the Lenders to a Borrower under this
Agreement shall be remitted in Dollars or the relevant Optional
Currency on the relevant Drawdown Date to the account of the Agent at
such bank as the Agent may have notified to the Lenders and shall be
paid by the Agent on such date in like funds as are received by the
Agent to the account of the Borrower specified in the relevant Drawdown
Notice.
8.3 NON-BANKING DAYS
(a) When any payment under this Agreement would otherwise be due
on a day which is not a Banking Day, the due date for payment
or the date of such reduction shall be postponed to the next
following Banking Day unless such Banking Day falls in the
next calendar month in which case payment shall be made on the
immediately preceding Banking Day.
(b) If any other relevant date under this Agreement is not a
Banking Day all references thereto shall be deemed to be to
the immediately preceding Banking Day.
8.4 AGENT MAY ASSUME RECEIPT
Where any sum is to be paid under this Agreement to the Agent for the
account of another Person, the Agent may assume that the payment will
be made to the Agent when due and may (but shall not be obliged to)
make such sum available to the Person so entitled. If it proves to be
the case that such payment was not made to the Agent, then the Person
to whom such sum was so made available shall on request refund such sum
to the Agent together with interest thereon
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sufficient to compensate the Agent for the cost of making available
such sum up to the date of such repayment and the Person by whom such
sum was payable shall indemnify the Agent for any and all loss or
reasonable expense which the Agent may sustain or incur as a
consequence of such sum not having been paid on its due date.
8.5 GROSSING-UP FOR TAXES
Subject to clause 8.6, if at any time any Obligor is required to make
any deduction or withholding in respect of Taxes from any payment due
under this Agreement and/or the Security Documents for the account of
any Finance Party (or if the Agent is required to make any such
deduction or withholding from a payment to the Security Trustee or
Lender), the sum due from the relevant Obligor in respect of such
payment shall be increased to the extent necessary to ensure that,
after the making of such deduction or withholding, each Finance Party
receives on the due date for such payment (and retains, free from any
liability in respect of such deduction or withholding) a net sum equal
to the sum which it would have received had no such deduction or
withholding been required to be made and the relevant Obligor shall
indemnify each Finance Party against any losses or costs incurred by
any of them by reason of any failure of such Obligor to make any such
deduction or withholding or by reason of any increased payment not
being made on the due date for such payment. The relevant Obligor shall
promptly deliver to the Agent any receipts, certificates or other proof
evidencing the amounts (if any) paid or payable in respect of any such
deduction or withholding.
8.6 EXCLUSIONS FROM TAX GROSS-UP
(a) Each Finance Party agrees promptly to notify the Borrower and
the Agent if it is not, or if it ceases to be, a Qualifying
Person by reason of sub-paragraph (i) of the definition of
Qualifying Person ceasing to apply and if any Finance Party is
not or ceases to be a Qualifying Person then (save in
circumstances where such Finance Party ceases to be a
Qualifying Person by reason of any change in law, regulation
or double taxation treaty or its application, in each case
taking effect after the date of this Agreement) the relevant
Obligor shall not be obliged to pay such Finance Party under
clause 8.5.
(b) Clause 8.5 shall not apply to Taxes imposed by reason of any
connection between the jurisdiction imposing such tax and any
Finance Party or any Lender's applicable lending office,
branch or affiliate other than a connection arising solely
from any Finance Party having executed, delivered or performed
its obligations under, or received payment under or enforced,
this Agreement or any Note.
(c) Clause 8.5 shall not apply to Taxes that would not have been
imposed but for the failure of any Finance Party, arising from
a reasonable request together with appropriate assistance and
direction from the relevant Obligor, to reasonably comply with
any certification, identification, information, or other
documentation requirement under law, regulation,
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administrative practice or an applicable treaty that is a
precondition to exemption from, or reduction in the rate of
the imposition, deduction or withholding of Taxes.
(d) If a Lender changes its applicable lending office (other than
pursuant to clause 8.8(b) below) or effects a transfer or
assignment of rights (pursuant to clause 16.3) and the effect
of the change or transfer or assignment, as of the date of the
change or transfer or assignment, would be to cause any
Obligor to become obliged to pay any additional amount under
clause 8.5, such Obligor shall not be obliged to pay such
additional amount.
8.7 CLAW-BACK OF TAX BENEFIT
If following any such deduction or withholding as is referred to in
clause 8.5 the Finance Parties or any of them shall receive or be
granted a credit against or remission for any Taxes payable by it, the
Finance Parties shall, subject to the relevant Obligor having made any
increased payment in accordance with clause 8.5 and to the extent that
any Finance Party can do so without prejudicing the retention of the
amount of such credit or remission and without prejudice to the right
of any Finance Party to obtain any other relief or allowance which may
be available to it, reimburse the relevant Obligor with such amount as
any Finance Party shall in its absolute discretion certify to be the
proportion of such credit or remission as will leave any Finance Party
(after such reimbursement) in no worse position than it would have been
in had there been no such deduction or withholding from the payment by
the relevant Obligor as aforesaid. Such reimbursement shall be made
forthwith upon any Finance Party certifying that the amount of such
credit or remission has been received by it. Nothing contained in this
Agreement shall oblige any Finance Party to rearrange its tax affairs
or to disclose any information regarding its tax affairs and
computations. Without prejudice to the generality of the foregoing, the
Obligors shall not, by virtue of this clause 8.7, be entitled to
enquire about any Finance Party's tax affairs.
8.8 RULES CONCERNING ADDITIONAL AMOUNTS
(a) If a condition or an event occurs which would, or would upon
the passage of time or giving of notice, result in the payment
of any additional amount to any Finance Party by an Obligor
pursuant to clause 8.5, the relevant Finance Party shall take
such steps as may reasonably be available to it and acceptable
to the Obligor to mitigate the effects of such condition or
event provided that such Finance Party shall not be required
to take any step that, in its reasonable judgment, would be
materially disadvantageous to its business or operations or be
in conflict with such Finance Party's (or, as the case may be,
its Holding Company's) general lending policies or would
result in any material increased administrative burden or
would require it to incur additional costs (unless the Obligor
agrees to reimburse such Finance Party for the reasonable
incremental out-of-pocket costs thereof).
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(b) If the Obligor shall become obliged to pay additional amounts
pursuant to clause 8.5 and any affected Finance Party shall
not have promptly taken steps necessary to avoid the need for
payments under clause 8.5, the Obligor shall have the right at
its own expense, for so long as such obligation remains, with
the assistance of the Agent, to seek one or more substitute
Lenders reasonably satisfactory to the Agent and the Obligor
to purchase the affected Loan, in whole or in part, at an
aggregate price no less than such Loan's principal amount plus
accrued interest, and assume the affected obligations under
this Agreement, or to the extent that no Default or Event of
Default under clause 12 shall have occurred of which the
Obligor has actual knowledge and is then continuing, upon at
least four Banking Days irrevocable notice to the Agent, to
prepay the affected Loan, in whole or in part, subject to
clause 13.1, without premium or penalty. In the case of the
substitution of a Lender, the Obligor, the Agent, the affected
Lender, and any substitute Lender shall execute and deliver an
appropriately completed Transfer Certificate pursuant to
clause 16.3 to effect the assignment of rights to, and the
assumption of obligations by, the substitute Lender. The
Obligor shall pay all expenses (including Taxes other than
Taxes measured by or imposed upon the overall net income or
gains of any Finance Party or any Lender's applicable lending
office) arising from a substitution of a Lender pursuant to
this clause 8. In the case of a prepayment of an affected
Loan, the amount specified in the notice shall be due and
payable on the date specified therein, together with any
accrued interest to such date on the amount prepaid. In the
case of each of the substitution of a Lender and of the
prepayment of an affected Loan, the obligor shall first pay
the affected Lender any additional amounts owing under clauses
8.5 and 14.2 (as well as any commitment fees and other amounts
then due and owing to such Lender) prior to such substitution
or prepayment.
8.9 BANK ACCOUNTS
Each Lender shall maintain, in accordance with its usual practices, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement. The Agent shall maintain
a control account showing each Advance and other sums owing by each
Obligor under this Agreement and all payments in respect thereof made
by the Obligors from time to time. The control account shall be prima
facie evidence as to the amount from time to time owing by each Obligor
under this Agreement.
8.10 PARTIAL PAYMENTS
If, on any date on which a payment is due to be made by any Obligor
under this Agreement and/or the Security Documents, the amount received
by the Agent from the relevant Obligor falls short of the total amount
of the payment due to be made by the relevant Obligor on such date
then, without prejudice to any rights or remedies available to the
Finance Parties under this Agreement and/or the Security Documents, the
Agent shall apply the amount actually received from the relevant
Obligor in or towards discharge of the obligations of the Obligors
62
under this Agreement in the following order, notwithstanding any
appropriation made, or purported to be made, by the relevant Obligor:
(a) in the case of a payment by the Borrower, first, in or towards
payment, on a pro rata basis, of any unpaid fees, costs and
expenses of the Agent under this Agreement and/or the Security
Documents;
(b) in the case of a payment by the Borrower, secondly, in or
towards payment to Nortel Networks plc of any portion of the
facility fee payable under clause 7.1(a) which remains unpaid;
(c) in the case of a payment by the Borrower, thirdly, in or
towards payment to the Lenders, on a pro rata basis, of any
accrued commitment commission payable under clause 7.1(b)
which shall have become due but remains unpaid;
(d) fourthly, in or towards payment to the Lenders, on a pro rata
basis, of any accrued interest which shall have become due but
remains unpaid by the Borrower;
(e) fifthly, in or towards payment to the Lenders, on a pro rata
basis, of any principal which shall have become due but
remains unpaid by a Borrower; and
(f) sixthly, in or towards payment of any other sum which shall
have become due but remains unpaid (and, if more than one such
sum so remains unpaid, on a pro rata basis) by the Borrower.
The order of application set out in this clause 8.10(b) to 8.10(f)
shall be varied by the Agent if all Lenders so direct, without any
reference to, or consent or approval from, any of the Obligors.
8.11 CALCULATIONS
All interest and other payments of an annual nature under this
Agreement shall accrue from day to day and be calculated on the basis
of actual days elapsed and (in the case of Sterling) a 365 day year or
(in the case of currencies other than Sterling) a 360 day year. In
calculating the actual number of days elapsed in a period which is one
of a series of consecutive periods with no interval between them or a
period on the last day of which any payment falls to be made in respect
of such period, the first day of such period shall be included but the
last day excluded.
8.12 CERTIFICATES PRIMA FACIE
Any certificate or determination of the Agent or any Lender as to any
rate of interest or any amount payable under this Agreement shall be
prima facie evidence thereof and shall not be conclusive save where
otherwise expressly stated in this Agreement.
8.13 EFFECT OF MONETARY UNION
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If the country of any national currency in which any amount is payable
under this Agreement participates in Economic and Monetary Union in
accordance with Article 109j of the Treaty on European Union, then:
(a) any amount payable under this Agreement in that national
currency shall be made in euro;
(b) any amount so required to be paid in euro shall be converted
from that national currency at the rate stipulated pursuant to
Article 109l(4) of the Treaty on European Union and payment of
the amount in euro derived from such conversion shall
discharge the obligation of the relevant party to pay such
national currency amount in accordance with, and subject to,
the Regulation(s) made pursuant to Article 109l(4); and
(c) after consultation with the Borrower and the Lenders, and
notwithstanding clause 17.11, the Agent shall be entitled to
make such reasonable amendments to this Agreement as it may
determine to be necessary to take account of monetary union
and any consequent changes in market practices (whether as to
the settlement or rounding of obligations, the calculation of
interest or otherwise howsoever).
Any amendment made to this Agreement by the Agent shall be promptly
notified to the other Finance Parties and the Obligors by the Agent and
shall be binding on all the other Finance Parties and the Obligors.
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9 SUBSIDIARY GUARANTEE
The Borrower shall, from time to time, procure the issue of Subsidiary
Guarantees in accordance with clause 11.2(e).
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10 REPRESENTATIONS AND WARRANTIES
10.1 REPEATED REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Finance Parties
that:
(a) DUE INCORPORATION: it, each of the Subsidiaries who are
Restricted Subsidiaries and each Security Provider, is duly
incorporated or organised and validly existing under the laws
of the respective country of its incorporation or organisation
and has power to carry on its business as it is now being
conducted and to own its property and other assets;
(b) POWER TO BORROW ETC.: it, each of the Subsidiaries who are
Restricted Subsidiaries and each Security Provider, has power
to execute, deliver and perform its obligations under the
Finance Documents to which it is a party and, in the case of
the Borrower, to borrow the Commitments and all necessary
corporate, shareholder and other corporate action has been
taken to authorise the execution, delivery and performance of
the same and, in the case of the Borrower, no limitation on
the powers of the Borrower to borrow will be exceeded as a
result of Borrowings under this Agreement;
(c) BINDING OBLIGATIONS: the Finance Documents when executed and
delivered by each Obligor who is party to such document will
constitute, valid and legally binding obligations of such
Obligor enforceable in accordance with their respective terms
subject to:
(i) applicable bankruptcy, insolvency, fraudulent
conveyance, moratoria or similar laws;
(ii) general principles of equity; and
(iii) the qualifications, limitations and exceptions
contained in the legal opinions referred to in
schedule 3 which are expressed to relate to the
relevant Finance Document;
(d) NO CONFLICT WITH OTHER OBLIGATIONS: the execution and delivery
of, the performance of its obligations under, and compliance
with the provisions of, the Finance Documents to which it is a
party by the relevant Obligor will not:
(i) contravene any existing applicable law, statute, rule
or regulation or any judgment, decree or permit to
which such Obligor is subject in any material
respect;
(ii) conflict with, or result in any material breach of
any of the terms of, or constitute a material default
under, any agreement or other instrument to which
such Obligor is a party or is subject or by which it
or any of its property is bound;
66
(iii) contravene or conflict with any provision of such
Obligor's constitutive documents;
(iv) breach in any material respect any term of the
Licences or Necessary Authorisations; or
(v) save for the Encumbrances granted to the Security
Trustee pursuant to the Security Documents or
otherwise permitted under this Agreement, result in
the creation or imposition of or oblige it or any of
its Subsidiaries which are Restricted Subsidiaries to
create any Encumbrance on its or any of such of its
Subsidiaries' undertakings, assets, rights or
revenues (except for any Encumbrance permitted by
this Agreement);
(e) NO LITIGATION: no material litigation, arbitration or
administrative proceeding is taking place, pending or, to the
knowledge of the officers of the Borrower, threatened against
it or any of its Subsidiaries which are Restricted
Subsidiaries, except as would not reasonably be expected to
have a Material Adverse Effect;
(f) NO MATERIAL ADVERSE CHANGE: there has been no event which
would reasonably be expected to have a Material Adverse
Effect;
(g) TITLE TO ASSETS: in respect of all Equipment which is to be
financed in whole or in part by an Advance, the relevant
Purchaser will be, at the time of such Advance, the legal
owner of such Equipment (other than Software and other rights
held under licence) free and clear of any Encumbrances and any
other rights or interests in favour of third parties save for
those Encumbrances permitted under this Agreement;
(h) NO GUARANTORS: none of the Borrowings of the Borrower is
Guaranteed by any of its Restricted Subsidiaries save to the
extent permitted by this Agreement;
(i) PRIOR REPRESENTATIONS: representations made in the Business
Plan as at the date of this Agreement and in the Offering
Memoranda as at their date, taken as a whole, are materially
accurate and complete and not materially misleading provided
that no representation or warranty is made concerning any
forecasts, estimates or pro forma information, projections and
statements as to anticipated future performance or conditions,
or the assumptions on which they were based except that such
forecasts, estimates and pro forma information, projections
and statements were arrived at after due and careful
consideration and enquiry and were based on the good faith
assumptions of the management of the Borrower which
assumptions were believed by such management to be reasonable
(it being understood that such forecasts, estimates and pro
forma information, projections and statements and the
assumptions on which they were based may or may not prove to
be correct);
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(j) YEAR 2000: except as would not reasonably be expected to have
a Material Adverse Effect, any reprogramming required to
permit the proper functioning in and following the year 2000,
of:
(i) the computer systems of any Obligor and each of its
Restricted Subsidiaries;
(ii) equipment containing embedded microchips (including
systems and equipment supplied by others to any
Obligor or any of its Restricted Subsidiaries or with
which the systems of any Obligor or any of its
Restricted Subsidiaries interface) and the testing of
all such systems and equipment, as so reprogrammed,
has been completed;
(k) OTHER BORROWINGS: there is no material default under any
material credit facility or any Material Agreement between an
Obligor or any of its Restricted Subsidiaries and any other
Person;
(l) USE OF ADVANCES: Advances have only been used, and shall only
be used, for the purposes set out in clause 4.2;
(m) LICENCES AND NECESSARY AUTHORISATIONS:
(i) each Purchaser has secured all necessary Licences and
such Licences are in full force and effect and such
Purchaser is in compliance in all material respects
with all provisions thereof that are applicable to
it;
(ii) except as would not reasonably be expected to have a
Material Adverse Effect, each Obligor and each of its
Subsidiaries which are Restricted Subsidiaries has
secured all the Necessary Authorisations, all such
Necessary Authorisations are in full force and effect
and such Obligor and such of its Subsidiaries are in
compliance in all material respects with all
provisions thereof;
(iii) neither any Obligor nor any of its Subsidiaries which
is a Restricted Subsidiary has been notified (in
writing or otherwise) that the Licences or any of the
Necessary Authorisations issued to such Obligor or
any such of its Subsidiaries are the subject of any
pending or threatened attack or revocation; AND
(iv) every material consent, authorisation, licence or
approval of, or registration with or declaration to,
governmental or public bodies or authorities of
courts (other than the Licences and the Necessary
Authorisations) required by an Obligor or any of its
Subsidiaries which is a Restricted Subsidiary to
authorise, or required by such Obligor or any of its
Subsidiaries which is a Restricted Subsidiary in
connection with, the execution, delivery, validity,
enforceability or admissibility in evidence of this
Agreement and the Security Documents to which it is a
party or the performance
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by such Obligor or any of its Subsidiaries which is a
Restricted Subsidiary of their respective obligations
under this Agreement and the Security Documents to
which they are a party has been obtained or made
(other than any not yet required) and is in full
force and effect in all material respects and there
has been no material default in the observance of the
conditions or restrictions (if any) imposed in, or in
connection with, any of the same;
(n) LAWS: each Obligor and each of its Subsidiaries which
is a Restricted Subsidiary is in compliance in all
material respects with all material laws;
(o) NO DEFAULT: no Default has occurred which is
continuing;
(p) ENVIRONMENTAL MATTERS:
(i) each Obligor and each of its Subsidiaries
which is a Restricted Subsidiary complies,
in all respects, with all requirements of
Environmental Laws where failure to do so
has or is reasonably likely to have a
Material Adverse Effect; and
(ii) after due enquiry, no Environmental Claim
is, to the knowledge of such Obligor or any
of its Subsidiaries which is a Restricted
Subsidiary, existing as at the date of this
Agreement, which has or is reasonably likely
to have a Material Adverse Effect; and
(q) NO FILINGS REQUIRED: save for the filings,
registrations and notarisations referred to in the
legal opinions referred to in schedule 3, it is not
necessary to ensure the legality, validity,
enforceability or admissibility in evidence of this
Agreement or the Security Documents to which each
Obligor is a party, that any of them or any other
instrument be notarised, filed, recorded, registered
or enrolled in any court, public office or elsewhere
in any Relevant Jurisdiction or that any stamp,
registration or similar tax or charge be paid in any
Relevant Jurisdiction on or in relation to this
Agreement or any of the Security Documents to which
such Obligor is a party and this Agreement and the
Security Documents to which each Obligor is a party
are in proper form for their enforcement in the
courts of any Relevant Jurisdiction.
10.2 REPETITION
The representations and warranties in clause 10.1 shall be deemed to be
repeated by the Borrower on and as of each Drawdown Date as if made
with reference to the facts and circumstances existing on each such day
save that references to financial statements shall be amended to refer
to the latest such financial statements delivered to the Agent under
clause 11.1.
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11 UNDERTAKINGS
11.1 POSITIVE COVENANTS
The Borrower (in respect of itself and Restricted Subsidiaries)
undertakes with each of the Finance Parties that, from the date of this
Agreement and so long as any moneys are owing under this Agreement or
remain available for drawing by the Borrower, it will:
(a) subject to clauses 11.2 and 11.3, do or cause to be done all
things necessary to preserve and keep in full force and effect
its existence and the existence of each of its Restricted
Subsidiaries in accordance with the respective organisational
or constitutional documents of the Borrower and each
Restricted Subsidiary and the rights (whether pursuant to
charter, partnership certificate, agreement, statute or
otherwise), licenses and franchises of the Borrower and each
Restricted Subsidiary provided that the Borrower shall not be
required to preserve any such right, license or franchise, or
the existence of any Restricted Subsidiary, if the maintenance
or preservation thereof is, in the judgment of the Borrower,
no longer desirable in the conduct of the business of the
Borrower and its Restricted Subsidiaries taken as a whole;
(b) pay or discharge and shall cause each of its Restricted
Subsidiaries to pay or discharge, or cause to be paid or
discharged, before the same shall become delinquent:
(i) all material taxes, assessments and governmental
charges levied or imposed upon:
(A) the Borrower or any such Restricted
Subsidiary;
(B) the income or profits of any such Restricted
Subsidiary which is a corporation or other
corporate entity; or
(C) the property of the Borrower or any such
Restricted Subsidiary; and
(ii) all material lawful claims for labour, materials and
supplies that, if unpaid, might by law become a lien
or an encumbrance upon the property of the Borrower
or any such Restricted Subsidiary,
provided that the Borrower shall not be required to pay or
discharge, or cause to be paid or discharged, any such tax,
assessment, charge or claim (x) the amount, applicability or
validity of which is being contested in good faith by
appropriate proceedings and for which adequate reserves have
been established to the extent required by generally accepted
accounting principles or (y) if failure to do so would not (as
determined by the Borrower in good faith) reasonably be
expected to have a material adverse effect on the financial
condition, results of operations or business of the Borrower
and its Restricted Subsidiaries taken as a whole or (z) if
70
any resulting Encumbrance constitutes a Permitted Encumbrance
or otherwise complies with clause 11.2(g);
(c) cause all properties used or useful in the conduct of its
business or the business of any of its Restricted Subsidiaries
to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and
will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in
the judgment of the Borrower may be necessary so that the
business carried on in connection therewith may be properly
and advantageously conducted at all times provided that
nothing in this clause 11.1(c) shall prevent the Borrower or
any Restricted Subsidiary from omitting to take such action or
discontinuing the use, operation or maintenance of any of such
properties or disposing of any of them, if such omission,
discontinuance or disposal is, in the judgment of the
Borrower, desirable in the conduct of the business of the
Borrower or such Restricted Subsidiary;
(d) provide or cause to be provided, for itself and its Restricted
Subsidiaries, insurance (including appropriate self-insurance)
against loss or damage of the kinds customarily insured
against by corporations similarly situated and owning like
properties, including, but not limited to, products liability
insurance and public liability insurance, with reputable
insurers, in such amounts, with such deductibles and by such
methods as shall be customary for corporations similarly
situated in the industry in which the Borrower or any such
Restricted Subsidiary, as the case may be, is then conducting
business provided that in the judgment of the Borrower such
insurance is available to the Borrower on commercially
reasonable terms and is desirable;
(e) in the event that any Officer becomes aware of any Default or
Event of Default, promptly deliver to the Agent a Certificate
specifying such Default or Event of Default;
(f) deliver to the Agent, within 90 days after the end of each
fiscal year, a Certificate stating whether or not the signers
know of any Default or Event of Default that occurred during
such fiscal quarter. Such certificate shall contain a
certification from the principal executive officer, principal
financial officer or principal accounting officer of the
Borrower that a review has been conducted of the activities of
the Borrower and its Restricted Subsidiaries and the
Borrower's and its Restricted Subsidiaries' performance under
this Agreement and that the Borrower has complied with all
conditions and covenants under this Agreement; and for
purposes of this clause 11.1(f), such compliance shall be
determined without regard to any period of grace or
requirement of notice provided under this Agreement; and if
any of the Officers of the Borrower signing such Certificate
has knowledge of such a Default or Event of Default, the
certificate shall describe any such Default or Event of
Default and its status;
71
(g) ensure that each Obligor and each Purchaser (in respect of
which Advances have been made under this Agreement) shall
remain a Wholly Owned Subsidiary of the Borrower;
(h) from and after the earlier of the date provided under Section
4.18(I) of the Indentures and the date that is six months
after the Closing Date (such earlier date, the "FILING DATE")
file with the Commission to the extent then permitted by the
Exchange Act and by the Commission, all such information on an
appropriate available form as it would be required to file
with the Commission by Sections 13(a) or 15(d) under the
Exchange Act as if it were a U.S. company and subject thereto,
including information required by annual, quarterly and
current reports whether or not required to be so filed; and it
will supply the Agent copies of such reports and other
information; and in addition prior to the Filing Date, it will
supply to the Agent, at the Borrower's cost, quarterly and
annual reports substantially equivalent to those described
above or which would otherwise be required by the Exchange Act
(or other reports or documents that include substantially the
same information) commencing with the report for the fiscal
quarter ending immediately after the date of this Agreement.
11.2 NEGATIVE COVENANTS
The Borrower (in respect of itself and the Restricted Subsidiaries)
undertakes with each of the Finance Parties that, from the date of this
Agreement and so long as any moneys are owing under this Agreement or
remain available for drawing by the Borrower, without the prior written
consent of the Agent acting on the instructions of the Majority
Lenders:
(a) it will not, and it will not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness (other than
Indebtedness under this Agreement and under the Notes (but
excluding any Additional Notes) and other Indebtedness
existing on the Closing Date provided that the Borrower or any
Permanent Guarantor may Incur Indebtedness if, after giving
effect to the Incurrence of such Indebtedness and the receipt
and application of the proceeds therefrom, the Consolidated
Leverage Ratio would be greater than zero and less than 6:1
and provided that the Borrower and any Restricted Subsidiary
(except as specified below) may Incur each and all of the
following:
(i) Indebtedness outstanding at any time in an aggregate
principal amount not to exceed (after giving effect
to any refinancing thereof) the sum of (A) $100
million, less any amount of such Indebtedness
permanently repaid as provided under clause 11.2(j)
plus (B) an amount equal to the lesser of (1) 80 per
cent. of the consolidated book value of the accounts
receivable of the Borrower and its Restricted
Subsidiaries determined in accordance with GAAP
(determined as of the end of the most recently ended
fiscal quarter for which reports have been filed
72
with the Commission and provided to the Agent) and (2) $100
million;
(ii) Indebtedness owed (A) to the Borrower evidenced by a
promissory note or (B) to any Restricted Subsidiary
provided that any event which results in any such
Restricted Subsidiary ceasing to be a Restricted
Subsidiary or any subsequent transfer of such
Indebtedness (other than to the Borrower or another
Restricted Subsidiary) shall be deemed, in each case,
to constitute an Incurrence of such Indebtedness not
permitted by this paragraph (ii);
(iii) Indebtedness to refinance then outstanding
Indebtedness (other than Indebtedness Incurred under
paragraph (i), (ii), (iv), (vi), (viii), (x) or (xi)
of this paragraph) and any refinancings thereof, in
an amount not to exceed the amount so refinanced
(plus premiums, accrued interest, fees and expenses)
provided that Indebtedness the proceeds of which are
used to refinance the Loan in part or Indebtedness
that is pari passu with, or expressly subordinated in
right of payment to, the Loan and any Subsidiary
Guarantee shall only be permitted under this
paragraph (iii) if:
(A) in cases where the Indebtedness to be
refinanced is pari passu with the Loan or
any Subsidiary Guarantee such new
Indebtedness, by its terms or by the terms
of any agreement or instrument pursuant to
which such new Indebtedness is outstanding,
is expressly made pari passu with, or
expressly subordinate in right of payment
to, the remaining Loan and any Subsidiary
Guarantee;
(B) in cases where the Indebtedness to be
refinanced is expressly subordinated in
right of payment to the Loan and any
Subsidiary Guarantee, such new Indebtedness,
by its terms or by the terms of any
agreement or instrument pursuant to which
such new Indebtedness is issued or remains
outstanding, is expressly made subordinate
in right of payment to the Loan and any
Subsidiary Guarantee at least to the extent
that the Indebtedness to be refinanced is
subordinated to the Loan and any Subsidiary
Guarantee; and
(C) such new Indebtedness, determined as of the
date of Incurrence of such new Indebtedness,
does not mature prior to the Stated Maturity
of the Indebtedness to be refinanced and the
Average Life of such new Indebtedness is at
least equal to the remaining Average Life of
the Indebtedness to be refinanced; and
provided further that in no event may
Indebtedness of the Borrower be refinanced
by means of any Indebtedness of any
Restricted Subsidiary pursuant to this
paragraph (iii);
73
(iv) Indebtedness (A) in respect of performance, surety,
appeal or other similar bonds provided in the
ordinary course of business and (B) arising from
agreements providing for indemnification, adjustment
of purchase price or similar obligations, or from
Guarantees or letters of credit, bankers'
acceptances, surety or performance bonds or other
similar instruments securing any obligations of the
Borrower or any of its Restricted Subsidiaries
pursuant to such agreements, in any case Incurred in
connection with the disposition of any business,
assets or Restricted Subsidiary (other than
Guarantees of Indebtedness Incurred by any Person
acquiring all or any portion of such business, assets
or Restricted Subsidiary for the purpose of financing
such acquisition), in a principal amount not to
exceed the gross proceeds actually received by the
Borrower or any Restricted Subsidiary in connection
with such disposition;
(v) Guarantees of the Loan and Guarantees of Indebtedness
of the Borrower by any Restricted Subsidiary provided
the Guarantee of such Indebtedness is permitted by
and made in accordance with clause 11.2(e) and
Guarantees of Indebtedness of any Restricted
Subsidiary by any Restricted Subsidiary provided such
Restricted Subsidiary simultaneously executes and
delivers a Subsidiary Guarantee;
(vi) Indebtedness Incurred to finance or refinance the
cost (including the cost of design, development,
acquisition, construction, acquisition, construction,
installation, improvement, transportation or
integration) to acquire equipment, inventory or
network assets (including leases on an indefeasible
right to use basis and multiple investment units)
(including acquisitions by way of Capitalised Lease
and acquisitions of the Capital Stock of a Person
that becomes a Restricted Subsidiary to the extent of
the fair market value of the equipment, inventory or
network assets so acquired) by the Borrower or a
Restricted Subsidiary;
(vii) Indebtedness of the Borrower or any Permanent
Guarantor not to exceed at any one time outstanding
(after giving effect to any refinancing thereof), two
times the sum of:
(A) the Net Cash Proceeds received by the
Borrower after the Closing Date as a capital
contribution or from the issuance and sale
of its Capital Stock (other than
Disqualified Stock) to a Person that is not
a Subsidiary of the Borrower, to the extent
(I) such capital contribution or Net Cash
Proceeds have not been used pursuant to
paragraph (C)(2) of clause 11.2(b) or
paragraphs (iii), (iv), (vi) or (x) of
clause 11.2(b) to make a Restricted Payment
and (II) if such capital contribution or Net
Cash Proceeds are used to consummate a
transaction pursuant to which the Borrower
74
incurs Acquired Indebtedness, the amount of
such Net Cash Proceeds exceeds one-half of
the amount of Acquired Indebtedness so
Incurred; and
(B) 80 per cent. of the fair market value of
property (other than cash and cash
equivalents) received by the Borrower after
the Closing Date as a capital contribution
or from the sale of its Capital Stock (other
than Disqualified Stock) to a Person that is
not a Subsidiary of the Borrower, to the
extent (I) such capital contribution or sale
of Capital Stock has not been used pursuant
to paragraphs (iii), (iv) or (vii) of clause
11.2(b) to make a Restricted Payment and
(II) if such capital contribution or Capital
Stock is used to consummate a transaction
pursuant to which the Borrower Incurs
Acquired Indebtedness, 80 per cent. of the
fair market value of the property received
exceeds one-half of the amount of Acquired
Indebtedness so Incurred PROVIDED that such
Indebtedness does not mature prior to the
Stated Maturity of the Loan or the Notes and
has an Average Life longer than the Loan or
the Notes;
(viii) Acquired Indebtedness;
(ix) Strategic Subordinated Indebtedness;
(x) Indebtedness in respect of bankers' acceptance and
letters of credit, all in the ordinary course of
business, in an aggregate amount outstanding at any
time not to exceed $10 million; and
(xi) subordinated Indebtedness of the Borrower or any
Permanent Guarantor (in addition to Indebtedness
permitted under paragraphs (i) through (xi) above) in
an aggregate principal amount outstanding at any time
(after giving effect to any refinancing thereof) not
to exceed $100 million,
provided that for the purposes of determining:
A) compliance with any Dollar-denominated restriction
under this clause 11.2(a) on the Incurrence of
Indebtedness denominated in another currency; or
B) any particular amount of Indebtedness under this
clause 11.2(a),
the methodology used in Sections 4.03(b) and 4.03(c) (as the
case may be) of the Indentures shall be adopted;
(b) it will not, and it will not permit any Restricted
Subsidiary to, directly or indirectly:
75
1) declare or pay any dividend or make any distribution
on or with respect to its Capital Stock (other than
(x) dividends or distributions payable solely in
shares of its Capital Stock (other than Disqualified
Stock) or in options, warrants or other rights to
acquire shares of such Capital Stock and (y)
dividends or distributions on Capital Stock of a
Restricted Subsidiary held by minority interest
holders on no more than a pro rata basis, measured by
value and based on all outstanding Capital Stock of
such Restricted Subsidiary) held by Persons other
than the Borrower or any of its Restricted
Subsidiaries;
2) purchase, redeem, retire or otherwise acquire for
value any shares of Capital Stock of (i) the Borrower
or an Unrestricted Subsidiary (including options,
warrants or other rights to acquire such shares of
Capital Stock) held by any Person other than the
Borrower or any Wholly Owned Restricted Subsidiary or
(ii) a Restricted Subsidiary (including options,
warrants or other rights to acquire such shares of
Capital Stock) held by any Affiliate of the Borrower
(other than a Wholly Owned Restricted Subsidiary) or
any holder (or any Affiliate of such holder) of 5 per
cent. or more of the Capital Stock of the Borrower;
3) make any voluntary or optional principal payment, or
voluntary or optional redemption, repurchase,
defeasance, or other acquisition or retirement for
value, of Indebtedness of the Borrower that is
expressly subordinated in right of payment to the
Loan or any Subsidiary Guarantee; or
4) make any Investment, other than a Permitted
Investment, in any other Person,
(such payments or any other actions described in paragraphs
(1) through (4) above being collectively "RESTRICTED
PAYMENTS"), if, at the time of, and after giving effect to,
the proposed Restricted Payment:
(A) a Default or Event of Default shall have occurred and
be continuing;
(B) the Borrower could not Incur at least $1.00 of
Indebtedness under clause 11.2(a); or
(C) the aggregate amount of all Restricted Payments (the
amount, if other than in cash, to be determined in
good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a
Board Resolution) made after the Closing Date shall
exceed the sum of:
(1) 50 per cent. of the aggregate amount of the
Adjusted Consolidated Net Income (or, if the
Adjusted Consolidated Net Income is a loss,
minus 100 per cent. of
76
the amount of such loss) accrued on a
cumulative basis during the period (taken as
one accounting period) beginning on the
first day of the fiscal quarter beginning
immediately following the Closing Date and
ending on the last day of the last fiscal
quarter preceding the Transaction Date for
which reports have been filed with the
Commission and provided to the Agent; plus
(2) the aggregate Net Cash Proceeds received by
the Borrower after the Closing Date as a
capital contribution or from the issuance
and sale permitted by this Agreement of its
Capital Stock (other than Disqualified
Stock) to a Person who is not a Subsidiary
of the Borrower, including the proceeds of
an issuance or sale permitted by this
Agreement of Indebtedness of the Borrower
for cash subsequent to the Closing Date upon
the conversion of such Indebtedness into
Capital Stock (other than Disqualified
Stock) of the Borrower, or from the issuance
to a Person who is not a Subsidiary of the
Borrower of any options, warrants or other
rights to acquire Capital Stock of the
Borrower (in each case, exclusive of any
Disqualified Stock or any options, warrants
or other rights that are redeemable at the
option of the holder, or are required to be
redeemed, prior to the Stated Maturity of
the Loan), in each case except to the extent
such Net Cash Proceeds are used to Incur
Indebtedness pursuant to clause
11.2(a)(vii); plus
(3) an amount equal to the net reduction in
Investments (other than reductions in
Permitted Investments and Investments under
clause 11.2(b) (vi), (viii) or (xii)) in any
Person resulting from payments of interest
on Indebtedness, dividends, distributions,
repayments of loans or advances, or other
transfers of assets, in each case to the
Borrower or any Restricted Subsidiary or
from the Net Cash Proceeds from the sale or
other disposition of any such Investment
(except, in each case, to the extent of any
gain on such sale or other disposition that
would be included in the calculation of
Adjusted Consolidated Net Income for
purposes of paragraph (C)(l) above), or from
re-designations of Unrestricted Subsidiaries
as Restricted Subsidiaries (valued in each
case as provided in the definition of
"Investments"), not to exceed, in each case,
the amount of Investments previously made by
the Borrower or any Restricted Subsidiary in
such Person or Unrestricted Subsidiary,
provided that the provisions of this clause 11.2(b)
shall not be violated by reason of:
77
(i) the payment of any dividend within 60 days after the
date of declaration thereof if, at said date of
declaration, such payment would comply with the
foregoing provisions of clause 11.2(b);
(ii) the redemption, repurchase, defeasance or other
acquisition or retirement for value of Indebtedness
that is subordinated in right of payment to the Loan
or any Subsidiary Guarantee, including premiums, if
any, and accrued and unpaid interest, with the
proceeds of, or in exchange for, Indebtedness
Incurred under clause 11.2(a)(iii) which is permitted
under this Agreement;
(iii) the repurchase, redemption or other acquisition of
Capital Stock of the Borrower or any Subsidiary of
the Borrower (or options, warrants or other rights to
acquire such Capital Stock) in exchange for, or out
of the proceeds of a capital contribution or a
substantially concurrent offering of, shares of
Capital Stock (other than Disqualified Stock) of the
Borrower (or options, warrants or other rights to
acquire such Capital Stock);
(iv) the making of any principal payment on or the
repurchase, redemption, retirement, defeasance or
other acquisition for value of Indebtedness of the
Borrower which is subordinated in right of payment to
the Loan in exchange for, or out of the proceeds of a
capital contribution or a substantially concurrent
offering of, shares of the Capital Stock (other than
Disqualified Stock) of the Borrower (or options,
warrants or other rights to acquire such Capital
Stock);
(v) payments or distributions to dissenting shareholders
pursuant to applicable law, pursuant to or in
connection with a consolidation, merger or transfer
of assets that complies with clauses 11.3 and 11.4;
(vi) any Investment in any Person the primary business of
which is related, ancillary or complementary to the
business of the Borrower and its Restricted
Subsidiaries on the date of such Investment; provided
that the aggregate amount of Investments made
pursuant to this paragraph (vi) does not exceed the
sum of:
a) $25 million, plus;
b) the amount of Net Cash Proceeds received by
the Borrower after the Closing Date as a
capital contribution or from the sale of its
Capital Stock (other than Disqualified
Stock) to a Person who is not a Subsidiary
of the Borrower, except to the extent such
Net Cash Proceeds are used to Incur
Indebtedness pursuant to clause 11.2(a)(vii)
or to make Restricted Payments pursuant to
paragraph (C)(2) of this clause 11.2(b)
above or clauses 11.2(b)(iii), (iv) or (x);
plus
78
c) the NET REDUCTION in Investments made
pursuant to this paragraph (vi) resulting
from distributions on or repayments of such
Investments or from the Net Cash Proceeds
from the sale or other disposition of any
such Investment (except in each case to the
extent of any gain on such sale or other
disposition that would be included in the
calculation of Adjusted Consolidated Net
Income for purposes of paragraph (C)(l) of
this clause 11.2(b) above) or from such
Person becoming a Restricted Subsidiary
(valued in each case as provided in the
definition of "INVESTMENTS"), provided that
the NET REDUCTION in any Investment shall
not exceed the amount of such Investment;
(vii) Investments acquired as a capital contribution to or
in exchange for Capital Stock (other than
Disqualified Stock) of the Borrower;
(viii) Investments in Permitted Joint Ventures not
exceeding, at the time of the Investment, the sum of:
a) $10 million; and
b) the NET REDUCTION in Investments made
pursuant to this paragraph (viii) resulting
from distributions on or repayments of such
Investments or from the Net Cash Proceeds
from the sale or other disposition of any
such Investment (except in each case to the
extent of any gain on such sale or
disposition that would be included in the
calculation of Adjusted Consolidated Net
Income for purposes of paragraph (C)(1) of
this clause 11.2(b) above) or from such
Person becoming a Restricted Subsidiary
(valued in each case as provided in the
definition of "Investments"), provided that
the NET REDUCTION in any Investment shall
not exceed the amount of such Investment;
(ix) repurchases of Warrants pursuant to a repurchase
offer or within ten days of their expiration in
accordance with the terms of the Warrant Agreements
in effect on the Closing Date, and any purchase of
any fractional shares of Common Stock (or other
Capital Stock of the Borrower issuable upon exercise
of the Warrants) in connection with an exercise of
the Warrants, and any payments in connection with the
anti-dilution provisions of the Warrant Agreements;
(x) the purchase, redemption, retirement or other
acquisition for value of shares of Capital Stock of
the Borrower or options, warrants or other rights to
purchase such shares held by Management Investors
upon death, disability, retirement, termination of
employment or pursuant to the terms of any
79
agreement under which such shares of Capital Stock or
options, warrants or other rights were issued
provided that the aggregate consideration paid for
such purchase, redemption, retirement or other
acquisition for value of such shares or options,
warrants or other rights after the Closing Date does
not in the aggregate exceed:
a) $5 million; plus
b) the aggregate Net Cash Proceeds received by
the Borrower after the Closing Date as a
capital contribution from, or from the
issuance or sale to, Management Investors of
Capital Stock of the Borrower or any
options, warrants or other rights to acquire
such Capital Stock; plus
c) the proceeds of insurance policies used to
effect any such purchase, redemption,
retirement or other acquisition;
(xi) any purchase, redemption, retirement or other
acquisition of Capital Stock deemed to occur upon the
exercise of options, warrants or other rights if such
Capital Stock represents a portion of the exercise
price thereof; or
(xii) other Restricted Payments in an aggregate amount not
to exceed $5 million plus the net reduction in
Investments made pursuant to this paragraph (xii)
resulting from distributions on or repayments of such
Investments or from the Net Cash Proceeds from the
sale or other disposition of any such Investment
(except in each case to the extent of any gain on
such sale or disposition that would be included in
the calculation of Adjusted Consolidated Net Income
for purposes of paragraph (C)(1) of this clause
11.2(b) above) or from such Person becoming a
Restricted Subsidiary (valued in each case as
provided in the definition of "Investments"),
provided that the net reduction in any Investment
shall not exceed the amount of such Investment;
(c) it will not, and it will not permit any Restricted Subsidiary
to, create or otherwise cause or suffer to exist or become
effective any consensual Encumbrance or restriction of any
kind on the ability of any Restricted Subsidiary to:
(A) pay dividends or make any other distributions
permitted by applicable law on any Capital Stock of
such Restricted Subsidiary owned by the Borrower or
any other Restricted Subsidiary;
(B) pay any Indebtedness owed to the Borrower or any
other Restricted Subsidiary;
80
(C) make loans or advances to the Borrower or any other
Restricted Subsidiary; or
(D) transfer any of its property or assets to the
Borrower or any other Restricted Subsidiary provided
that the foregoing provisions shall not restrict any
encumbrances or restrictions:
(i) existing on the Closing Date , including
under the Indentures, or any other
agreements or instruments in effect on the
Closing Date, and any refinancings of such
agreements or instruments; provided that the
encumbrances and restrictions in any such
refinancings are no less favourable in any
material respect to the Holders or the
Lenders than those encumbrances or
restrictions that are then in effect and
that are being refinanced;
(ii) existing under or by reason of applicable
law or any requirement of any applicable
governmental regulatory authority;
(iii) existing with respect to any Person, or any
property or assets, acquired by the Borrower
or any Restricted Subsidiary, existing at
the time of such acquisition and not
incurred in contemplation thereof, which
encumbrances or restrictions are not
applicable (A) in the case of an acquisition
of such Person, to any other Person or (B)
in the case of an acquisition of such
property or assets, any other property or
assets;
(iv) with respect to a Restricted Subsidiary and
imposed pursuant to an agreement that has
been entered into for the sale or
disposition of all or substantially all of
the Capital Stock of, or property and assets
of, such Restricted Subsidiary;
(v) contained in the terms of any Indebtedness
or any agreement pursuant to which such
Indebtedness was issued, or any agreement
relating to the sale, disposition or
financing of receivables, if (A) either (1)
the encumbrance or restriction applies only
in the event of a payment default or a
default with respect to a financial covenant
contained in the terms of such Indebtedness
or agreement or (2) the Borrower in good
faith determines (as set forth in a Board
Resolution) that any such encumbrance or
restriction will not materially affect the
Borrower's ability to make principal or
interest payments in respect of the Loan and
(B) the encumbrance or restriction is not
materially more disadvantageous to the
Lenders than is customary in comparable
financings (as determined by the Borrower in
good faith);
81
(vi) restrictions on cash or other deposits or
net worth imposed by customers under
contracts entered into in the ordinary
course of business; or
(vii) customary provisions in joint venture
agreements and other similar agreements
entered into in the ordinary course of
business;
(Nothing in this clause 11.2(c) shall prevent the
Borrower or any Restricted Subsidiary from creating,
incurring, assuming or suffering to exist any Liens
otherwise permitted under clause 11.2(g) or
restricting the sale or other disposition of property
or assets of the Borrower or any of its Restricted
Subsidiaries that secure Indebtedness of the Borrower
or any of its Restricted Subsidiaries);
(d) it will not sell, and it will not permit any Restricted
Subsidiary, directly or indirectly, to issue or sell, any
shares of Capital Stock of a Restricted Subsidiary (including
options, warrants or other rights to purchase shares of such
Capital Stock) except:
(i) to the Borrower or a Wholly Owned Restricted
Subsidiary;
(ii) issuance of director's qualifying shares or issuance
or sales to foreign nationals of shares of Capital
Stock of foreign Restricted Subsidiaries, to the
extent required by applicable law;
(iii) if, immediately after giving effect to such issuance
or sale, such Restricted Subsidiary would no longer
constitute a Restricted Subsidiary and any Investment
in such Person remaining after giving effect to such
issuance or sale would have been permitted to be made
under clause 11.2(b) if made on the date of such
issuance or sale; or
(iv) issuance or sales of Common Stock of a Restricted
Subsidiary, provided that the Borrower or such
Restricted Subsidiary applies the Net Cash Proceeds,
if any, of any such sale in accordance with clause
11.2(j);
(e) it will not permit any Restricted Subsidiary, directly or
indirectly, to Guarantee any Indebtedness of the Borrower or
any Subsidiary Guarantor which is pari passu with or expressly
subordinate in right of payment to the Loan or any Subsidiary
Guarantee ("GUARANTEED INDEBTEDNESS"), unless:
(i) such Restricted Subsidiary simultaneously executes
and delivers a Subsidiary Guarantee together with all
the documents and evidence listed in schedule 6, in
form and substance satisfactory to the Agent; and
82
(ii) such Restricted Subsidiary waives and will not in any
manner whatsoever claim or take the benefit or
advantage of, any rights of reimbursement, indemnity
or subrogation or any other rights against the
Borrower or any other Restricted Subsidiary as a
result of any payment by such Restricted Subsidiary
under its Subsidiary Guarantee, until payment in full
of the outstanding principal amount of the Loan and
any accrued and unpaid interest thereon then due and
owing provided that this paragraph shall not be
applicable to any Guarantee of any Restricted
Subsidiary:
(A) that existed at the time such Person became
a Restricted Subsidiary and was not Incurred
in connection with, or in contemplation of,
such Person becoming a Restricted
Subsidiary; or
(B) of Indebtedness Incurred pursuant to clause
11.2(a)(i),
provided that if the Guaranteed Indebtedness is:
1) pari passu with the Loan, then the
Guarantee of such Guaranteed
Indebtedness shall be pari passu
with, or subordinated to, the
Subsidiary Guarantee; or
2) subordinated to the Loan, then the
Guarantee of such Guaranteed
Indebtedness shall be subordinated
to the Subsidiary Guarantee at
least to the extent that the
Guaranteed Indebtedness is
subordinated to the Loan,
provided that any Subsidiary Guarantee by a Restricted
Subsidiary may provide by its terms that it shall be
automatically and unconditionally released and discharged
upon:
A) any sale, exchange or transfer (including by way of
merger or consolidation), to any Person not an
Affiliate of the Borrower, of all the Borrower's and
each Restricted Subsidiary's Capital Stock in, or all
or substantially all the assets of, such Restricted
Subsidiary (which sale, exchange, transfer or other
transaction is not prohibited by this Agreement);
B) the absolute and unconditional repayment of the Loan
and cancellation of the Commitments, subject to
customary contingent reinstatement provisions;
C) the release or discharge of the Guarantee which
resulted in the creation of the Subsidiary Guarantee,
except a discharge or release by or as a result of a
payment under such Guarantee; or
83
D) upon the merger or consolidation of such Subsidiary
Guarantor with and into the Borrower or another
Subsidiary Guarantor that is the surviving Person in
such merger or consolidation;
(f) it will not, and it will not permit any Restricted Subsidiary
to, directly or indirectly, enter into, renew or extend any
transaction (including the purchase, sale, lease or exchange
of property or assets, or the rendering of any service) with
any holder (or any Affiliate of such holder) of 5 per cent. or
more of any class of Capital Stock of the Borrower or with any
Affiliate of the Borrower or any Restricted Subsidiary, except
upon fair and reasonable terms that taken as a whole are no
less favourable to the Borrower or such Restricted Subsidiary
than could be obtained, at the time of such transaction or, if
such transaction is pursuant to a written agreement, at the
time of the execution of the agreement providing therefor, in
a comparable arm's-length transaction with a Person that is
not such a holder or an Affiliate provided that the foregoing
limitation does not limit, and shall not apply to:
(i) transactions (A) approved by a majority of the
disinterested members of the Board of Directors or
(B) for which the Borrower or a Restricted Subsidiary
delivers to the Agent a written opinion of a
nationally recognised investment banking or appraisal
firm stating that the transaction is fair to the
Borrower or such Restricted Subsidiary from a
financial point of view, or is upon terms that taken
as a whole are no less favourable to the Borrower or
such Restricted Subsidiary than could be obtained in
a comparable arm's-length transaction;
(ii) any transaction solely between or among the Borrower
and any of its Wholly Owned Restricted Subsidiaries
or solely between or among Wholly Owned Restricted
Subsidiaries;
(iii) the payment of reasonable and customary regular fees
to directors of the Borrower who are not employees of
the Borrower;
(iv) any payments or other transactions pursuant to any
tax-sharing agreement between the Borrower and any
other Person with which the Borrower files a
consolidated tax return or with which the Borrower is
part of a consolidated group for tax purposes;
(v) any Restricted Payments (or a transaction excluded
from the definition of the term "Restricted
Payments") not prohibited by clause 11.2(b);
(vi) transactions consisting of or pursuant to employment
or benefit agreements, plans, programs or
arrangements for or with, or indemnification or
contribution obligations to, employees, officers or
directors in the ordinary course of business;
84
(vii) the entering into of the Securities Purchase and
Cancellation Agreement, the 1999 Share Option Plan,
the Securities Purchase Agreement, the Registration
Rights Agreement and the Securityholders' Agreement,
as described in the Offering Memorandum dated
February 12, 1999 as amended or supplemented, and
performance of the obligations and the transactions
contemplated thereby; or
(viii) issuances or sales of Capital Stock (other than
Disqualified Stock) of the Borrower or options,
warrants or other rights to acquire such Capital
Stock,
provided that notwithstanding the foregoing, any transaction
or series of related transactions covered by the first
paragraph of this clause 11.2(f) and not covered by paragraphs
(ii) through (viii), the aggregate amount of which exceeds $2
million in value, must be approved or determined to be fair in
the manner provided for in paragraph (i)(A) or (B) above;
(g) it will not, and it will not permit any Restricted Subsidiary
to, create, incur, assume or suffer to exist any Encumbrance
on any of its assets or properties of any character (including
licenses), or any shares of Capital Stock or Indebtedness of
any Restricted Subsidiary, without making effective provision
for all of the Loan to be directly secured equally and
rateably with (or, if the obligation or liability to be
secured by such Encumbrance is expressly subordinated in right
of payment to the Loan prior to) the obligation or liability
secured by such Encumbrance provided that, subject to clause
11.2(h), the foregoing limitation does not apply to:
(i) Encumbrances existing on the Closing Date;
(ii) Encumbrances granted after the Closing Date on any
assets or Capital Stock of the Borrower or its
Restricted Subsidiaries created in favour of the
Lenders;
(iii) Encumbrances with respect to the assets of a
Restricted Subsidiary granted by such Restricted
Subsidiary to the Borrower or a Wholly Owned
Restricted Subsidiary to secure Indebtedness owing to
the Borrower or such other Restricted Subsidiary;
(iv) Encumbrances securing Indebtedness which is permitted
to be Incurred under clause 11.2(a)(iii) to refinance
secured Indebtedness provided that such Encumbrances
do not extend to or cover any property or assets of
the Borrower or any Restricted Subsidiary other than
the property or assets securing the Indebtedness
being refinanced;
(v) Encumbrances on the Capital Stock of or any property
or assets of, a Restricted Subsidiary securing
Indebtedness of such
85
Restricted Subsidiary (or obligations in respect
thereof) permitted under clause 11.2(a); or
(vi) Permitted Encumbrances;
(h) it will not, and it will not permit any Restricted Subsidiary,
to create, incur, assume or suffer to exist any Encumbrance on
any of the Equipment financed under this Agreement other than
where such Encumbrance is for the benefit of Lenders or arises
in the ordinary course of business or under operation of law;
(i) it will not, and it will not permit any Restricted Subsidiary
to, enter into any sale-leaseback transaction involving any of
its assets or properties whether now owned or hereafter
acquired, whereby the Borrower or a Restricted Subsidiary
sells or transfers such assets or properties more than one
year after acquiring such assets or properties and then or
thereafter leases such assets or properties or any part
thereof or any other assets or properties which the Borrower
or such Restricted Subsidiary, as the case may be, intends to
use for substantially the same purpose or purposes as the
assets or properties sold or transferred provided that the
foregoing restriction does not apply to any sale-leaseback
transaction if (i) the lease is for a period, including
renewal rights, of not in excess of three years; (ii) the
lease secures or relates to industrial revenue or pollution
control bonds; (iii) the transaction is solely between the
Borrower and any Wholly Owned Restricted Subsidiary or solely
between Wholly Owned Restricted Subsidiaries; or (iv) the
Borrower or such Restricted Subsidiary, within 12 months after
the sale or transfer of any assets or properties is completed,
applies an amount not less than the net proceeds received from
such sale in accordance with clause 11.2(j);
(j) it will not, and it will not permit any Restricted Subsidiary
to, consummate any Asset Sale, unless:
(i) the consideration received by the Borrower or such
Restricted Subsidiary (including any Released
Indebtedness and including by way of relief from or
by any other Person assuming responsibilities for any
liabilities other than Indebtedness ("RELEASED
LIABILITIES")) is at least equal to the fair market
value of the assets sold or disposed of provided that
this paragraph (i) shall not apply to any sale,
transfer or other disposition arising from
foreclosure, condemnation or similar action with
respect to any assets; and
(ii) at least 75 per cent. of the consideration received
(including any Released Indebtedness and Released
Liabilities) consists of cash, Temporary Cash
Investments or Released Indebtedness and Released
Liabilities provided, however, that this paragraph
(ii) shall not apply to long-term assignments in
capacity in a telecommunications network or other
transfers of indefeasible rights of use, multiple
investment units or dark fibres,
86
provided that in the event and to the extent that the Net Cash
Proceeds received by the Borrower or any of its Restricted
Subsidiaries from one or more Asset Sales occurring on or
after the Closing Date in any period of 12 consecutive months
exceed 10 per cent. of Adjusted Consolidated Net Tangible
Assets (determined as of the date closest to the commencement
of such 12-month period for which a consolidated balance sheet
of the Borrower and its Subsidiaries has been filed with the
Commission and provided to the Agent), then the Borrower shall
or shall cause the relevant Restricted Subsidiary to:
(A) within 12 months after the date Net Cash
Proceeds so received exceed 10 per cent. of
Adjusted Consolidated Net Tangible Assets:
1) apply an amount equal to such
excess Net Cash Proceeds to
permanently repay unsubordinated
Indebtedness of the Borrower, or
any Restricted Subsidiary providing
a Subsidiary Guarantee or
Indebtedness of any other
Restricted Subsidiary, in each case
owing to a Person other than the
Borrower or any of its Restricted
Subsidiaries; or
2) invest an equal amount, or the
amount not so applied pursuant to
paragraph (1), (or enter into a
definitive agreement committing to
so invest within 12 months after
the date of such agreement) in
property or assets (other than
current assets) of a nature or type
or that are used in a business (or
in a company having property and
assets of a nature or type, or
engaged in a business) similar or
related to the nature or type of
the property and assets of, or the
business of, the Borrower and its
Restricted Subsidiaries existing on
the date of such investment (as
determined in good faith by the
Board of Directors, whose
determination shall be conclusive
and evidenced by a Board
Resolution); and
(B) apply (no later than the end of the 12-month
period referred to in paragraph (A)) such
excess Net Cash Proceeds (to the extent not
applied or committed to be applied pursuant
to paragraph (A)) in prepayment of the Loan
and clause 6.4 shall apply; and
(k) it will not and it will not permit any Obligor to, merge,
amalgamate or consolidate with any other Person unless it or
the relevant Obligor (as the case may be) is the continuing
Person or unless the continuing Person expressly assumes the
obligations of the Lenders of the merged entities provided
that such merger, amalgamation or consolidation shall only be
87
permitted if it also complies with the provisions of clauses
11.3 and 11.4.
11.3 NO CONSOLIDATIONS ETC
An Obligor shall not consolidate with, merge with or into, or sell,
convey, transfer, lease or otherwise dispose of all or substantially
all of its property and assets (as an entirety or substantially an
entirety in one transaction or a series of related transactions) to,
any Person or permit any Person to merge with or into an Obligor
unless:
(a) such Obligor shall be the continuing Person, or the Person (if
other than such Obligor) formed by such consolidation or into
which such Obligor is merged or that acquired or leased such
property and assets of the Borrower shall be a corporation
organised and validly existing under the laws of the Kingdom
of the Netherlands (including the Netherlands Antilles),
Bermuda, Canada, Switzerland, any member state of the European
Union or the United States of America or any jurisdiction
thereof and shall expressly assume, by deed of accessions (in
form and substance satisfactory to the Agent) all of the
obligations of such Obligor under or in respect of this
Agreement;
(b) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be
continuing;
(c) immediately after giving effect to such transaction on a pro
forma basis, such Obligor or any Person becoming the successor
obligor under or in respect of this Agreement shall have a
Consolidated Net Worth equal to or greater than the
Consolidated Net Worth of the relevant Obligor immediately
prior to such transaction provided that this paragraph (c)
shall only apply to a sale of less than all of the assets of
an Obligor;
(d) immediately after giving effect to such transaction on a pro
forma basis such Obligor, or any Person becoming the successor
obligor under or in respect of this Agreement and, as the case
may be, could incur at least $1.00 of indebtedness under the
first paragraph of clause 11.2(a) provided that this paragraph
(d) shall not apply to a consolidation, merger or sale of all
(but not less than all) of the assets of such Obligor if all
Encumbrances and Indebtedness of such or any Person becoming a
successor obligor under or in respect of this Agreement and
its Restricted Subsidiaries outstanding immediately after such
transaction would, if incurred at such time, have been
permitted to be incurred (and all such Encumbrances and
Indebtedness, other than Encumbrances and Indebtedness of such
Obligor and its Restricted Subsidiaries outstanding
immediately prior to the transaction, shall be deemed to have
been incurred) for all purposes of this Agreement; and
(e) the Borrower delivers to the Agent a Certificate (attaching
the arithmetic computations to demonstrate compliance with
paragraphs (c) and (d)) and Opinion of Counsel, in each case
to the effect that such
88
consolidation, merger or transfer and any supplemental
agreement complies with this provision and that all conditions
precedent provided for in this paragraph relating to such
transaction have been complied with provided that:
(i) in giving any such opinion such Counsel may rely on
the Certificate as to compliance with the foregoing
paragraphs (b), (c) and (d) and as to any matters of
fact; and
(ii) paragraphs (c) and (d) above will not apply if, in
the good faith determination of the Board of
Directors of the relevant Obligor, whose
determination shall be evidenced by a Board
Resolution, the principal purpose of such transaction
is to change the jurisdiction of organisation of such
Obligor, and such transaction does not have as one of
its purposes the evasion of the foregoing
limitations.
11.4 CONSOLIDATIONS
Upon any consolidation or merger, or any sale, conveyance, transfer,
lease or other disposition of all or substantially all of the property
and assets of an Obligor in accordance with clause 11.3, the successor
Person formed by such consolidation or into which such Obligor is
merged or to which such sale, conveyance, transfer, lease or other
disposition is made shall succeed to, and be substituted for, and may
exercise every right and power of, such Obligor under or in respect of
this Agreement with the same effect as if such successor Person had
been named as the Borrower herein or, as the case my be, an Obligor
provided that the Borrower shall not be released from its obligation to
pay the principal of or interest on the Loan in the case of a lease of
all or substantially all of its property and assets.
11.5 FURTHER RESTRICTIONS ON CONSOLIDATIONS
Notwithstanding any other provision of this Agreement, the Borrower
shall not consolidate with, merge with or into, or sell, convey,
transfer, lease or otherwise dispose of all or substantially all of its
property and assets (as an entirety or substantially an entirety in one
transaction or a series of related transactions) to, any Person or
permit any Person to merge with or into an Obligor if following such
consolidation, merger, sale, conveyance, transfer, lease or disposal
the Person who is the successor obligor in respect of the Notes is not
the same as the Person who is the successor obligor in respect of the
Loan.
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12 EVENTS OF DEFAULT
12.1 EVENTS OF DEFAULT
Each of the events and circumstances set out below is an Event of
Default (whether or not caused by any reason outside of the control of
an Obligor):
(a) failure to pay any scheduled principal instalment sum due from
it under this Agreement in the currency, at the time or in the
manner stipulated in this Agreement;
(b) failure to pay any other amount which is due to be paid by way
of indemnity or by way of mandatory prepayment under this
Agreement, and such default continues for a period of 10
Banking Days;
(c) failure to pay interest or fees under this Agreement when the
same becomes due and payable, and such default continues for a
period of 10 Banking Days;
(d) default in the performance or breach of the provisions of
clause 11.3;
(e) default in the performance of or breaches any other covenant
or agreement in this Agreement (other than a default specified
in clause (a), (b) or (c) above) and such default or breach
continues for a period of 30 consecutive days after written
notice by the Agent;
(f) any representation or warranty made pursuant to clause 10
proving to be untrue when made in any material respect;
(g) there occurs with respect to any Borrowings of the Borrower or
any Significant Subsidiary having an outstanding principal
amount of $5 million or more in the aggregate (or, its
equivalent in any other currency) whether such Borrowings now
exists or shall hereafter be created:
(i) an event of default that has caused the relevant
Person to declare such Borrowings to be due and
payable prior to its Stated Maturity and such
Borrowings has not been discharged in full or such
acceleration has not been rescinded or annulled
within 30 days of such acceleration; and/or
(ii) the failure to make a principal payment at the final
(but not any interim) fixed maturity and such
defaulted payment shall not have been made, waived or
extended within 30 days of such payment default;
(h) any final judgment or order (not covered by insurance) for the
payment of money in excess of $10 million in the aggregate (or
its equivalent in any other currency) for all such final
judgments or orders against all such Persons (treating any
deductibles, self-insurance or retention as not so covered)
shall be rendered against the Borrower or any Significant
Subsidiary and shall not be paid or discharged, and there
shall be any
90
period of 60 consecutive days following entry of the final
judgment or order that causes the aggregate amount for all
such final judgments or orders outstanding and not paid or
discharged against all such Persons to exceed $10 million
during which a stay of enforcement of such final judgment or
order, by reason of a pending appeal or otherwise, shall not
be in effect.
(i) a court having jurisdiction in the premises enters a
decree or order for:
(i) relief in respect of the Borrower or any Significant
Subsidiary in an involuntary case under any
applicable bankruptcy, insolvency or other similar
law now or hereafter in effect;
(ii) appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official
of the Borrower or any Significant Subsidiary or for
all or substantially all of the property and assets
of the Borrower or any Significant Subsidiary; or
(iii) the winding up or liquidation of the affairs of the
Borrower or any Significant Subsidiary and, in each
case, such decree or order shall remain unstayed and
in effect for a period of 30 consecutive days;
(j) the Borrower or any Significant Subsidiary:
(i) commences a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or
hereafter in effect, or consents to the entry of an
order for relief in an involuntary case under any
such law;
(ii) consents to the appointment of or taking possession
by a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of the
Borrower or any Significant Subsidiary or for all or
substantially all of the property and assets of the
Borrower or any Significant Subsidiary; or
(iii) effects any general assignment for the benefit of
creditors;
(k) any Security Document shall cease to be in full force and
effect or enforceable in accordance with its terms, and the
Borrower has neither cured such defect nor prepaid the Advance
or Advances which were secured by such Security Document
within the period set out in clause 5.8(e); or
(l) the occurrence of an event or circumstance which has a
Material Adverse Effect.
12.2 ACCELERATION
The Agent may, and if so requested by the Majority Lenders shall,
without prejudice to any other rights of the Lenders, at any time after
the happening of an
91
Event of Default so long as the same is continuing, unremedied or
unwaived by notice to the Borrower declare that:
(a) the obligation of each Lender to make its Commitment available
shall be terminated, whereupon the Total Commitments shall be
reduced to zero forthwith; and/or
(b) all of the Loan together with accrued interest and all other
amounts accrued under this Agreement have become immediately
due and payable or have become due and payable on demand,
whereupon the same shall, immediately or in accordance with
the terms of such notice, become so due and payable; and/or
(c) the Security Documents (or any of them) have become
enforceable whereupon the same shall be enforceable.
On or at any time after the making of any such declaration, the Agent
shall be entitled, to the exclusion of the Borrower (and without
prejudice to clause 5.3), to select the duration of each period for the
calculation of interest in relation to any outstanding Advances or
other sums payable under this Agreement.
12.3 DEMAND BASIS
If, pursuant to clause 12.2(b), the Agent declares all outstanding
Advances to be due and payable on demand then the Agent may (and, if so
instructed by the Majority Lenders, shall) at any time by written
notice to the Borrower:
(a) call for repayment of all of the Loan together with accrued
interest and all other amounts accrued under this Agreement on
such date as may be specified in such notice whereupon all of
the Loan together with accrued interest and all other amounts
accrued under this Agreement shall become due and payable on
the date so specified; or
(b) withdraw such declaration with effect from the date specified
in such notice.
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13 INDEMNITIES
13.1 MISCELLANEOUS INDEMNITIES
The Borrower shall on demand indemnify each Finance Party and, in the
case of (e) below, their respective officers, employees, agents and
delegates (together the "INDEMNIFIED PARTIES") in respect of which each
Finance Party holds this indemnity on trust, without prejudice to any
of their other rights under this Agreement and the Security Documents,
against any loss (including loss of Margin, in the case of (a) and (b)
below) or expense which such Finance Party or Indemnified Party shall
have sustained or incurred and shall have certified as sustained or
incurred by it as a consequence of:
(a) any default in payment by any Obligor of any sum under or
pursuant to this Agreement or any of the Security Documents
when due;
(b) the occurrence of any other Event of Default;
(c) any prepayment of all or part of any Advance or being made
otherwise than on any Interest Payment Date relative thereto
(provided that the Borrower shall not be obliged to indemnify
any Finance Party under this paragraph (c) for loss of
Margin); or
(d) any Advance not being made or issued for any reason (excluding
any default by the Agent or any Lender) after a Drawdown
Notice has been given; or
(e) any Environmental Claim made or asserted against such
Indemnified Party which would not have arisen if this
Agreement had not been executed and which was not caused by
the gross negligence or wilful default of the relevant Finance
Party or the relevant Indemnified Party of the relevant
Finance Party,
including, in the case of any Lender, in the case of (a) to (d) above,
but not limited to, any loss or expense sustained or incurred by such
Lender in maintaining or funding all or any part of its Contribution or
in liquidating or re-employing deposits from third parties acquired or
contracted for to fund all or any part of its Contribution or any other
amount owing to such Lender.
13.2 CURRENCY OF ACCOUNT; CURRENCY INDEMNITY
No payment by any Obligor under or pursuant to this Agreement which is
made in a currency other than the currency ("CONTRACTUAL CURRENCY") in
which such payment is required to be made pursuant to this Agreement
shall discharge the obligation in respect of which it is made except to
the extent of the net proceeds in the Contractual Currency received by
the Agent upon the sale of the currency so received, after taking into
account any premium and costs of exchange in connection with such sale.
For the avoidance of doubt the Finance Parties shall not be obliged to
accept any such payment in a currency other than the Contractual
Currency nor shall the Finance Parties be liable to any Obligor for
93
any loss or alleged loss arising from fluctuations in exchange rates
between the date on which such payment is so received by the Agent and
the date on which the Agent effects such sale, as to which the Agent
shall (as against the relevant Obligor) have an absolute discretion. If
any sum due from any Obligor under this Agreement or any order or
judgment given or made in relation hereto is required to be converted
from the Contractual Currency or the currency in which the same is
payable under such order or judgment (the "FIRST CURRENCY") into
another currency (the "SECOND CURRENCY") for the purpose of (a) making
or filing a claim or proof against the relevant Obligor, (b) obtaining
an order or judgment in any court or other tribunal or (c) enforcing
any order or judgment given or made in relation to this Agreement, the
relevant Obligor shall indemnify and hold harmless the Finance Parties
from and against any loss suffered as a result of any difference
between (i) the rate of exchange used for such purpose to convert the
sum in question from the first currency into the second currency and
(ii) the rate or rates of exchange at which such Finance Party may in
the ordinary course of business purchase the first currency with the
second currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgment, claim or proof. Any
amount due from any Obligor under the indemnity contained in this
clause 13.2 shall be due as a separate debt and shall not be affected
by judgment being obtained for any other sums due under or in respect
of this Agreement and the term "RATE OF EXCHANGE" includes any premium
and costs of exchange payable in connection with the purchase of the
first currency with the second currency.
13.3 ECB RESERVE REQUIREMENTS
The Borrower agrees to indemnify on demand each Lender against any cost
or loss suffered by it as a result of complying with the reserve
requirements of the European Central Bank to the extent that such
requirements relate to its participation in the Facility and are not
recoverable by the Lender under clause 13.2.
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14 UNLAWFULNESS AND INCREASED COSTS; MITIGATION
14.1 UNLAWFULNESS
(a) For the avoidance of doubt, without prejudice to clause 16.3,
if it is or becomes contrary to any law or regulation for any
Lender to contribute to Advances or to maintain its Commitment
or fund its Contribution, such Lender shall promptly, through
the Agent, notify the Borrower whereupon:
(i) such Lender's Commitment shall be reduced to zero;
and
(ii) the Borrower shall be obliged to prepay the
Contribution of such Lender either:
(A) forthwith; or
(B) on a future specified date, as specified by
the Agent not being earlier than the latest
date permitted by the relevant law or
regulation.
(b) For the avoidance of doubt, without prejudice to clause 16.3,
if it is or becomes contrary to any law or regulation for the
Borrower to Incur or maintain Borrowings under this Agreement:
(i) the Lenders' Commitments shall be reduced to zero;
and
(ii) the Borrower shall be obliged to prepay the
Contribution of each Lender either:
(A) forthwith; or
(B) on a future specified date, as specified by
the Agent not being earlier than the latest
date permitted by the relevant law or
regulation.
(c) Any prepayment pursuant to this clause 14.1 shall be made
together with all amounts referred to in clause 6.4.
14.2 INCREASED COSTS
If any change in, or in the interpretation or application of, or the
introduction of, any law or any regulation, request or requirement of
any central bank or other fiscal, monetary or governmental authority
(whether or not having the force of law, but, if not having the force
of law, with which the relevant Lender or, as the case may be, its
Holding Company habitually complies), including (without limitation)
those relating to capital adequacy, liquidity, reserve assets, cash
ratio deposits and special deposits, and the result of such change or
introduction is to:
(a) subject any Lender to Taxes or change the basis of Taxation of
any Lender with respect to any payment under this Agreement
(other than
95
Taxes or Taxation measured by or imposed upon the overall net
income of any Finance Party or any Lender's applicable lending
office, any franchise taxes, branch taxes, taxes on doing
business or taxes measured by or imposed upon the overall
capital or net worth of any Finance Party or any Lender's
applicable lending office in each case imposed: (i) by the
jurisdiction under the laws of which any Finance Party or any
Lender's applicable lending office is organised or is located,
or in which the principal executive office of any Finance
Party is located, or any nation within which such jurisdiction
is located or any political sub-division thereof; or (ii) by
reason of any connection between the jurisdiction imposing
such tax and any Finance Party or any Lender's applicable
lending office other than a connection arising solely from any
Finance Party having executed, delivered or performed its
obligations under, or received payment under or enforced, this
Agreement; and/or
(b) increase the cost to, or impose an additional cost on, any
Lender or its Holding Company in making or keeping available
all or part of such Lender's Commitment or maintaining or
funding all or part of such Lender's Contribution; and/or
(c) reduce the amount payable or the effective return to any
Lender under this Agreement; and/or
(d) reduce any Lender's or its Holding Company's rate of return on
its overall capital by reason of a change in the manner in
which it is required to allocate capital resources to such
Lender's obligations under this Agreement; and/or
(e) require any Lender or its Holding Company to make a payment or
forego a return calculated by reference to or on any amount
received or receivable by such Lender under this Agreement;
and/or
(f) require any Lender or its Holding Company to incur or sustain
a loss (including a loss of future potential profits) by
reason of being obliged to deduct all or part of such Lender's
Commitment or Contribution from its capital for regulatory
purposes,
then and in each such case (but subject to clause 14.3):
(i) such Lender shall notify the Borrower through the
Agent in writing of such event promptly upon its
becoming aware of the same; and
(ii) the Borrower shall on demand, made at any time
whether or not such Lender's Contribution has been
repaid, pay to the Agent for the account of such
Lender the amount which such Lender specifies (in a
certificate setting forth the basis of the
computation of such amount in reasonable detail but
not including any matters which such Lender or its
Holding Company regards as confidential) is required
to compensate such Lender and/or its
96
Holding Company for such liability to Taxes,
increased or additional cost, reduction, payment,
forgone return or loss.
For the purposes of this clause 14.2 and clause 14.4 "HOLDING COMPANY"
means, in relation to a Lender, the Borrower or entity (if any) within
the consolidated supervision of which such Lender is included.
14.3 EXCEPTIONS
Nothing in clause 14.2 shall entitle any Lender to receive any amount
in respect of compensation for any such liability to Taxes, increased
or additional cost, reduction, payment, forgone return or loss to the
extent that the same:
(a) is taken into account in calculating the Additional Cost; or
(b) is the subject of an additional payment under clause 8.5; or
(c) arises as a consequence of (or of any law or regulation
implementing) (i) the proposals for international convergence
of capital measurement and capital standards published by the
Basle Committee on Banking Regulations and Supervisory
Practices in July 1988 and/or (ii) any applicable directive of
the European Union (in each case) unless it results from any
change in, or in the interpretation or application of, such
proposals or any such applicable directive (or any law or
regulation implementing the same) occurring after the date
hereof; or
(d) arises as a result of a breach by such Lender of any
regulation, request or requirement (which either (i) is in
existence at the date of this Agreement or (ii) which comes
into effect after the date of this Agreement and with which
such Lender would have complied if such regulation, request or
requirement was in effect on the date of this Agreement) of
any applicable central bank or other fiscal, monetary or other
authority (whether or not having the force of law); or
(e) arises by reason of such Lender's unreasonable delay in
notifying the Borrower through the Agent of its right to make
a demand under clause 14.2 after it has become aware of and is
able to ascertain the amount of its claim.
For the purposes of clause 14.3(c) the term "APPLICABLE DIRECTIVE"
means (exclusively) each of the Own Funds Directive (89/299/EEC of 17th
April 1989) and the Solvency Ratio Directive (89/647/EEC of 18th
December 1989).
14.4 MITIGATION
If circumstances arise which would, or would upon the giving of notice,
result in:
(a) the application of clause 5.6 in relation to any Lender;
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(b) the reduction of any Lender's Commitment to zero or the
Borrower being required to prepay any Lender's Contribution
pursuant to clause 14.1; or
(c) the Borrower being required to make a payment to any Lender to
compensate such Lender or its Holding Company for a liability
to Taxes, increased or additional cost, reduction, payment,
forgone return or loss pursuant to clause 14.2(ii);
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Obligors under clause 8 and this clause 14, such
Lender shall, in consultation with the Agent, take such reasonable
steps (and/or, in the case of clause 14.2(ii) and where the increased
or additional cost, reduction, payment, forgone return or loss is that
of its Holding Company, to procure that its Holding Company takes such
reasonable steps) as are open to it (or, as the case may be, its
Holding Company) to mitigate or remove such circumstances (including
(in the case of such Lender) the transfer of its rights and obligations
under this Agreement to another bank or financial institution
acceptable to the Borrower) unless the taking of such steps might (in
the opinion of such Lender) be prejudicial to such Lender (or, as the
case may be, its Holding Company) or be in conflict with such Lender's
(or, as the case may be, its Holding Company's) general banking
policies or involve such Lender (or, as the case may be, its Holding
Company) in any material expense or any material increased
administrative burden.
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15 SET-OFF AND PRO RATA PAYMENTS
15.1 SET-OFF
After an Event of Default (whilst such Event of Default is continuing)
each Obligor authorises each Finance Party to apply any credit balance
to which such Obligor is then entitled on any bank account of such
Obligor with such Finance Party at any of its branches in or towards
satisfaction of any sum then due and payable from such Obligor to such
Finance Party under this Agreement. For this purpose each Finance Party
is authorised to purchase with the moneys standing to the credit of
such account such other currencies as may be necessary to effect such
application. No Finance Party shall be obliged to exercise any right
given to it by this clause 15.1. Each Finance Party shall notify the
Agent and the relevant the Borrower (giving full details) forthwith
upon the exercise or purported exercise of any right of set-off and the
Agent shall inform the other Finance Parties.
15.2 PRO RATA PAYMENTS
(a) If at any time any Finance Party (the "RECOVERING LENDER")
receives or recovers any amount owing to it by any Obligor
under this Agreement by direct payment, set-off or in any
manner other than by payment through the Agent pursuant to
clause 8.1 or 8.10 (not being a payment received from a
Transferee of such Finance Party's Contribution or any other
payment of an amount due to the Recovering Lender for its sole
account pursuant to clauses 5.7, 7, 8.5, 13.1, 13.2, 14.1 or
14.2), the Recovering Lender shall, within two Banking Days of
such receipt or recovery (a "RELEVANT RECEIPT") notify the
Agent of the amount of the Relevant Receipt. If the Relevant
Receipt exceeds the amount which the Recovering Lender would
have received if the Relevant Receipt had been received by the
Agent and distributed pursuant to clause 8.1 or 8.10 (as the
case may be) then:
(i) within two Banking Days of demand by the Agent, the
Recovering Lender shall pay to the Agent an amount
equal (or equivalent) to the excess;
(ii) the Agent shall treat the excess amount so paid by
the Recovering Lender as if it were a payment made by
the relevant Obligor and shall distribute the same to
the Finance Parties (other than the Recovering
Lender) in accordance with clause 8.10; and
(iii) as between the relevant Obligor and the Recovering
Lender the excess amount so re-distributed shall be
treated as not having been paid but the obligations
of the relevant Obligor to the other Lenders shall,
to the extent of the amount so re-distributed to
them, be treated as discharged.
(b) If any part of the Relevant Receipt subsequently has to be
wholly or partly refunded by the Recovering Lender (whether to
a liquidator or
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otherwise) each Finance Party to which any part of such
Relevant Receipt was so re-distributed shall on request from
the Recovering Lender repay to the Recovering Lender such
Finance Party's pro rata share of the amount which has to be
refunded by the Recovering Lender.
(c) Each Finance Party shall on request supply to the Agent such
information as the Agent may from time to time request for the
purpose of this clause 15.2.
(d) Notwithstanding the foregoing provisions of this clause 15.2
no Recovering Lender shall be obliged to share any Relevant
Receipt which it receives or recovers pursuant to legal
proceedings taken by it to recover any sums owing to it under
this Agreement with any other party which has a legal right
to, but does not, either join in such proceedings or commence
and diligently pursue separate proceedings to enforce its
rights in the same or another court (unless the proceedings
instituted by the Recovering Lender are instituted by it
without prior notice having been given to such party through
the Agent).
15.3 NO RELEASE
For the avoidance of doubt it is hereby declared that failure by any
Recovering Lender to comply with the provisions of clause 15.2 shall
not release any other Recovering Lender from any of its obligations or
liabilities under clause 15.2.
15.4 NO CHARGE
The provisions of this clause 15 shall not, and shall not be construed
so as to, constitute a charge by a Finance Party over all or any part
of a sum received or recovered by it in the circumstances mentioned in
clause 15.2.
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16 ASSIGNMENT, SUBSTITUTION AND LENDING OFFICES
16.1 BENEFIT AND BURDEN
This Agreement shall be binding upon, and enure for the benefit of, the
Finance Parties and the Borrower and their respective successors.
16.2 NO ASSIGNMENT BY BORROWER
The Borrower shall not assign or otherwise transfer any of its rights
or obligations under this Agreement.
16.3 SUBSTITUTION
(a) If a Lender (a "TRANSFEROR LENDER") wishes to transfer all or
any part of its rights, benefits and obligations under this
Agreement it shall first give the Borrower at least 10
Business Days' notice (with copy to the Agent) of its
intention to do so and such notice shall identify the Person
to whom it intends to make such transfer (a "PROPOSED
TRANSFEREE").
(b) If, within 10 Business Days of the service of any notice
pursuant to clause 16.3(a), the Borrower has not served a
counter-notice on the Transferor Lender (with copy to the
Agent) objecting to the transfer expressly on the grounds that
the Proposed Transferee is not a reputable Qualifying Person
then the Proposed Transferee shall be deemed to be a reputable
Qualifying Person.
(c) Subject to clauses 16.2(a) and (b), a Transferor Lender may
transfer all or any part (being at least $5,000,000 and an
integral multiple of $500,000) of its rights, benefits and/or
obligations under this Agreement to a reputable Qualifying
Person (a "TRANSFEREE") provided that if immediately following
such transfer as a result of laws in force at the time of
transfer, the Transferee would be entitled to receive from the
Borrower in respect of such rights, benefits and obligations
transferred more than the Transferor Lender then the
Transferee will be entitled to receive any such amount only to
the extent that the Transferor would have been so entitled had
there been no transfer. Any such transfer shall be effected
upon not less than 5 Banking Days' prior notice by delivery to
the Agent of a duly completed Transfer Certificate duly
executed by the Transferor Lender and the Transferee. On the
Effective Date (as specified and defined in a Transfer
Certificate so executed and delivered) by virtue of the
counter-signature of the Transfer Certificate by the Agent
(for itself and the other parties to this Agreement):
(i) to the extent that in such Transfer Certificate the
Transferor Lenders seeks to transfer such obligations
and rights hereunder the existing parties to this
Agreement and the Transferor Lender shall be released
from their respective obligations towards one
another, other than the obligations outstanding from
the Obligors to the Transferor Lender, under this
Agreement ("DISCHARGED
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OBLIGATIONS") and their respective rights against one
another, other than the outstanding rights of the
Transferor Lender against the Obligors, under this
Agreement ("DISCHARGED RIGHTS") shall be cancelled
and the rights of the Transferor Lender against the
Obligors shall be assigned to the Transferee party to
the relevant transfer certificate (the "ASSIGNED
RIGHTS");
(ii) the Transferee party to the relevant Transfer
Certificate and the existing parties to this
Agreement (other than such Transferor Lender) shall
assume obligations towards each other which differ
from the discharged obligations only insofar as they
are owed to or assumed by such Transferee instead of
to or by such Transferor Lender; and
(iii) the Transferee party to the relevant Transfer
Certificate and the existing parties to this
Agreement and the Security Trust Deed (other than
such Transferor Lender) shall acquire rights against
each other which differ from the discharged rights
and the assigned rights only insofar as they are
exercisable by or against such Transferee instead of
by or against such Transferor Lender,
and, on such Effective Date, the Transferee shall pay to the
Agent for its own account a fee of L1,000. The Agent
shall promptly notify the Borrower of the receipt by it of any
Transfer Certificate and shall promptly deliver a copy of such
Transfer Certificate to the Borrower.
16.4 RELIANCE ON TRANSFER CERTIFICATE
The Finance Parties and the Borrower shall be fully entitled to rely on
any Transfer Certificate delivered to the Agent in accordance with the
foregoing provisions of this clause 16 which is complete and regular on
its face as regards its contents and purportedly signed on behalf of
the relevant Transferor Lender and the Transferee and none of the
Finance Parties or the Borrower shall have any liability or
responsibility to any party as a consequence of placing reliance on and
acting in accordance with any such Transfer Certificate if it proves to
be the case that the same was not authentic or duly authorised.
16.5 AUTHORISATION OF AGENT
Each party to this Agreement irrevocably authorises the Agent to
counter-sign each Transfer Certificate on its behalf for the purposes
of clause 16.3 without any further consent of, or consultation with,
any such party.
16.6 CONSTRUCTION OF CERTAIN REFERENCES
If any Lender assigns all or any part of its rights or transfers any
part of its rights, benefits and obligations as provided in clause 16.3
all relevant references in this Agreement to such Lender shall
thereafter be construed as a reference to such Lender and/or its
Transferee to the extent of their respective interests.
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16.7 LENDING OFFICES
Each Lender shall lend through its office at the address specified in
schedule 1 or, as the case may be, in any relevant Transfer Certificate
or through any other office of such Lender selected from time to time
by such Lender through which such Lender wishes to lend for the
purposes of this Agreement.
16.8 DISCLOSURE OF INFORMATION
(a) Save as permitted pursuant to the terms of this Agreement or
the relevant Security Document any information furnished to
any Finance Party pursuant to this Agreement or any Security
Document or in connection with the negotiation of this
Agreement to which any Obligor is a party to any Finance Party
shall be kept confidential by the recipient and the other
Finance Parties, save that the provisions of this clause 16.8
shall not apply:
(i) to any information already known to the recipient and
not furnished by or on behalf of an Obligor in
connection with the negotiation of this Agreement;
(ii) to any information subsequently received by the
recipient which it would otherwise be free to
disclose;
(iii) to any information which is or becomes public
knowledge otherwise than as a result of a breach by
any Person of this clause 16.8 or of any
confidentiality undertaking entered into pursuant to
clause 16.9; and
(iv) to any extent that the recipient is required to
disclose the same pursuant to any law or order of any
court or order or request of any governmental agency
with whose instructions the recipient habitually
complies, and has jurisdiction over the recipient
provided that the recipient shall give notice of such
disclosure to the Borrower as far in advance as
practicable.
(b) Each Obligor agrees that information provided to any Finance
Party under this Agreement or any Security Document may be
passed on by such Finance Party to the other Finance Parties,
subject to the provisions and requirements of this clause 16.8
and of clause 16.9.
16.9 CONFIDENTIALITY UNDERTAKING
Any Finance Party may disclose to a prospective Assignee or Transferee
or to any other Person who may propose entering into contractual
relations with such Finance Party in relation to this Agreement or any
Security Document any information referred to in clause 16.8 subject to
the prospective Transferee or other Person first entering into a
confidentiality undertaking with the Borrower in substantially the same
terms as clause 16.8 and this clause 16.9.
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16.10 RESTRICTIONS ON TRANSFERS
Where a Lender transfers part of its rights, benefits and obligations
pursuant to clause 16.3, that Lender must transfer equal fractions of
its Commitment and Contribution (if any) and, if at the time when such
transfer takes effect more than one Advance is outstanding, the
transfer of its Contribution shall take effect in respect of the same
fraction of each Advance. The Transfer Certificate relating to any such
transfer shall be completed accordingly.
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17 AGENT, SECURITY TRUSTEE AND REFERENCE BANK
17.1 APPOINTMENT OF AGENT
Each Lender irrevocably appoints the Agent as its agent for the
purposes of this Agreement and irrevocably authorises the Agent in such
capacity:
(a) to execute all documents as may be approved by the Majority
Lenders for execution by the Agent; and
(b) (whether or not by or through employees or agents) to take
such action on such Lender's behalf and to exercise such
rights, remedies, powers and discretions as are specifically
delegated to the Agent by this Agreement or, (as the case may
be) the Security Documents, together with such powers and
discretions as are reasonably incidental thereto (but subject
to any restrictions or limitations specified in this
Agreement). None of the Agent or the Security Trustee shall,
however, have any duties, obligations or liabilities (whether
fiduciary or otherwise) to the Lenders beyond those expressly
stated in this Agreement and/or the Security Documents.
Notwithstanding that the Agent and the Security Trustee may from time
to time be the same entity, the Agent and Security Trustee have entered
into this Agreement in their separate capacities as agent for the
Lenders under and pursuant to this Agreement and as security trustee
for the Beneficiaries (as defined in the Security Trust Deed) to hold
the security created or to be created by the Security Documents on the
terms set out in the Security Trust Deed. However, where this Agreement
provides for the Agent to communicate with or provide instructions to
the Security Trustee, while the Agent and the Security Trustee are the
same entity, it will not be necessary for there to be any such formal
communications or instructions notwithstanding that this Agreement
provides in certain cases for the same to be in writing.
17.2 AGENT'S ACTIONS
Any action taken by the Agent under or in relation to this Agreement
with requisite authority, or on the basis of appropriate instructions,
received from the Majority Lenders (or as otherwise duly authorised)
shall be binding on all the Lenders.
17.3 AGENT'S DUTIES
The Agent shall:
(a) promptly notify each Lender of the contents of each notice,
certificate or other document received by the Agent from any
Security Provider under or pursuant to any of the Finance
Documents;
(b) consult the Lenders as to whether and, if so, how a discretion
vested in the Agent is, either in any particular instance or
generally, to be exercised
105
but so that this shall not prevent the Agent in exceptional
circumstances where time does not permit such consultation and
urgent action is required, from exercising its rights and
powers, or from instructing the Security Trustee to exercise
its rights and powers, to preserve the security constituted by
the Security Documents so long as the Agent promptly notifies
the Lenders subsequently of such exercise; and
(c) (subject to the other provisions of this clause 17) take such
action or, as the case may be, refrain from taking such action
with respect to the exercise of any of its rights, remedies,
powers and discretions as agent or security agent, as the
Majority Lenders may reasonably direct.
17.4 AGENT'S RIGHTS
The Agent may:
(a) in the exercise of any right, remedy, power or discretion in
relation to any matter, or in any context, not expressly
provided for by this Agreement, act or, as the case may be,
refrain from acting in accordance with the instructions of the
Majority Lenders, and shall be fully protected in so doing;
(b) unless and until it shall have received directions from the
Majority Lenders, take such action, or refrain from taking
such action in respect of a Default of which the Agent has
actual knowledge as it shall deem advisable in the best
interests of the Lenders (but shall not be obliged to do so);
(c) refrain from acting in accordance with any instructions of the
Majority Lenders to institute, or to instruct the Security
Trustee to institute any legal proceedings arising out of or
in connection with this Agreement and/or the Security
Documents until it and/or the Security Trustee has been
indemnified and/or secured to its satisfaction against any and
all costs, expenses or liabilities (including legal fees)
which it and/or the Security Trustee would or might incur as a
result;
(d) deem and treat (i) each Lender as the Person entitled to the
benefit of the Contribution of such Lender for all purposes of
this Agreement and the Security Documents unless and until a
Transfer Certificate shall have been filed with the Agent and
shall have become effective, and (ii) the office set opposite
the name of each Lender in schedule 1 or, as the case may be,
in any relevant Transfer Certificate as such Lender's lending
office unless and until a written notice of change of lending
office shall have been received by the Agent; and the Agent
may act upon any such notice unless and until the same is
superseded by a further such notice;
(e) rely as to matters of fact which might reasonably be expected
to be within the knowledge of any Security Provider upon a
certificate signed by any director of the relevant Security
Provider on behalf of such Security Provider; and
106
(f) refrain from doing anything which would, or might in its
opinion, be contrary to any law or regulation of any
jurisdiction and may do anything which is in its opinion
necessary or desirable to comply with any such law or
regulation.
17.5 NO LIABILITY OF SECURITY TRUSTEE AND AGENT
None of the Security Trustee, the Agent or any of their respective
employees and agents shall:
(a) be obliged to request any certificate or opinion under clause
11.1 or any other provision of the Finance Documents or to
make any enquiry as to the use of the proceeds of the Facility
unless (in the case of the Agent) so required in writing by
any Lender, in which case the Agent shall promptly make the
appropriate request of the relevant Security Provider; or
(b) be obliged to make any enquiry as to any breach or default by
any Security Provider in the performance or observance of any
of the provisions of any Finance Document or as to the
existence of a Default unless (in the case of the Agent) the
Agent has actual knowledge thereof or has been notified in
writing thereof by a Lender, in which case the Agent shall
promptly notify the Lenders of the relevant event or
circumstance; or
(c) be obliged to enquire whether or not any representation or
warranty made by any Security Provider pursuant to any of the
Finance Documents is true; or
(d) be obliged to do anything (including disclosing any document
or information) which would, or might in its opinion, be
contrary to any law or regulation or be a breach of any duty
of confidentiality or otherwise be actionable or render it
liable to any Person; or
(e) be obliged to account to any Lender for any sum or the profit
element of any sum received by it for its own account; or
(f) be obliged to institute any legal proceedings arising out of
or in connection with, or otherwise take steps to enforce any
of the Finance Documents other than on the instructions of the
Majority Lenders; or
(g) be liable to any Lender for any action taken or omitted under
or in connection with any of the Finance Documents or the Loan
unless caused by its gross negligence or wilful misconduct.
For the purposes of this clause 17 neither the Agent, nor the Security
Trustee shall be treated as having actual knowledge of any matter of
which the corporate finance or any other division outside the agency or
loan administration department of the Person for the time being acting
as the Agent or the Security Trustee, as the case may be, may become
aware in the context of corporate
107
finance, advisory or lending activities from time to time undertaken by
the Agent or the Security Trustee, as the case may be, for the Borrower
or any of its Subsidiaries or Associated Companies or any other Person
which may be a trade competitor of any of the Security Providers or may
otherwise have commercial interests similar to those of any of the
Security Providers.
17.6 NON-RELIANCE ON SECURITY TRUSTEE OR AGENT
Each Lender acknowledges, by virtue of its execution of this Agreement
or, as the case may be, a Transfer Certificate, that it has not relied
on any statement, opinion, forecast or other representation made by the
Security Trustee or the Agent to induce it to enter into this Agreement
and that it has made and will continue to make, without reliance on the
Agent or the Security Trustee and based on such documents as it
considers appropriate, its own appraisal of the creditworthiness of
each Security Provider and its own independent investigation of the
financial condition, prospects and affairs of each Security Provider in
connection with the making and continuation of the Loan under this
Agreement. None of the Security Trustee or the Agent shall have any
duty or responsibility, either initially or on a continuing basis, to
provide any Lender with any credit or other information with respect to
the Security Providers whether coming into its possession before the
making of any Advance or at any time or times thereafter, other than
(in the case of the Agent) as provided in clause 17.3(a).
17.7 NO RESPONSIBILITY ON SECURITY TRUSTEE OR AGENT FOR ANY SECURITY
PROVIDER'S PERFORMANCE
None of the Security Trustee or the Agent shall have any responsibility
or liability to any Lender:
(a) on account of the failure of any Security Provider to perform
its obligations under any Finance Document; or
(b) for the financial condition of any Security Provider; or
(c) for the completeness or accuracy of any statements,
representations or warranties in any Finance Document or any
document delivered under any Finance Document; or
(d) for the execution, effectiveness, adequacy, genuineness,
validity, enforceability or admissibility in evidence of any
of the Finance Documents or of any certificate, report or
other document executed or delivered under any of the Finance
Documents; or
(e) otherwise in connection with the Facility or its negotiation
or for acting (or, as the case may be, refraining from acting)
in accordance with the instructions of the Majority Lenders.
17.8 RELIANCE ON DOCUMENTS AND PROFESSIONAL ADVICE
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The Agent shall be entitled to rely on any communication, instrument or
document believed by it to be genuine and correct and to have been
signed or sent by the proper person and shall be entitled to rely as to
legal or other professional matters on opinions and statements of any
legal or other professional advisers selected or approved by it
(including those in the Agent's employment).
17.9 OTHER DEALINGS
The Agent may, without any liability to account to the Lenders, accept
deposits from, lend money to, and generally engage in any kind of
banking or other business with, and provide advisory or other services
to, any Security Provider or any of their respective Associated
Companies or any of the Lenders as if it were not the Agent, as the
case may be.
17.10 RIGHTS OF AGENT AND SECURITY TRUSTEE AS LENDER; NO PARTNERSHIP
With respect to its own Commitment and Contribution (if any) the Agent
and the Security Trustee shall have the same rights and powers under
this Agreement and the Security Documents as any other Lender and may
exercise the same as though it were not performing the duties and
functions delegated to it under this Agreement and/or the Security
Documents and the term "LENDERS" shall, unless the context clearly
otherwise indicates, include the Agent and the Security Trustee in its
individual capacity as a Lender. This Agreement shall not and shall not
be construed so as to constitute a partnership between the parties or
any of them.
17.11 AMENDMENTS; WAIVERS
(a) Subject to clause 17.11(b), the Agent may, with the consent of
the Majority Lenders (or if and to the extent expressly
authorised by the other provisions of this Agreement) and, if
so instructed by the Majority Lenders, shall (i) agree
amendments or modifications to this Agreement or any Security
Document with the Security Providers and/or (ii) vary or waive
breaches of, or defaults under, or otherwise excuse
performance of, any provision of any Finance Document by any
Security Provider. Any such action so authorised and effected
by the Agent shall be documented in such manner as the Agent
shall (with the approval of the Majority Lenders) determine,
shall be promptly notified to the Lenders by the Agent and
(without prejudice to the generality of clause 17.2) shall be
binding on all the Lenders.
(b) Except with the prior written consent of all the Lenders, the
Agent shall not have authority on behalf of the Lenders (A) to
agree with any Security Provider any amendment or modification
to any Finance Document or to grant waivers in respect of
breaches or defaults or to vary or excuse performance of or
under any Finance Document by any Security Provider, if the
effect of such amendment, modification, waiver, variation or
excuse would be to (i) reduce the Margin, (ii) postpone the
due date or reduce the amount of any reduction in
availability, any
109
payment of principal, interest, commitment commission or other
amount payable by any Security Provider under any Finance
Document, (iii) change the currency in which any amount is
payable by any Security Provider under any Finance Document,
(iv) increase any Lender's Commitment, (v) extend the
Availability Period, (vi) change the definition of "Majority
Lenders" in clause 1.5, (vii) change any provision of any
Finance Document which requires the approval or consent of all
the Lenders such that the relevant approval or consent may be
given otherwise than with the sanction of all the Lenders,
(viii) change clauses 4.1 or 4.2, (ix) change the order of
distribution under clause 8.10, (x) change clause 15.2, (xi)
change this clause 17.11 or (B) release any Security Provider
or any of their respective assets from the security created by
any of the Security Documents unless such release is to permit
the disposal or other dealing with such Security Provider or
asset in accordance with the terms of the Finance Documents.
(c) For the purposes of this clause 17.11 it is expressly agreed
and acknowledged that the execution of any deed or instrument
pursuant to a further assurance provision in the Security
Documents shall not constitute an amendment or modification
to, or variation of, this Agreement or any of the Security
Documents.
17.12 REIMBURSEMENT AND INDEMNITY BY LENDERS
Each Lender shall reimburse the Agent (rateably in accordance with such
Lender's Commitment or Contribution), to the extent that the Agent is
not reimbursed by the Security Providers, for the costs, charges and
expenses incurred by the Agent in connection with the negotiation,
preparation and execution of the Finance Documents and/or in
contemplation of, or otherwise in connection with, the enforcement or
attempted enforcement of, or the preservation or attempted preservation
of any rights under, or in carrying out its duties under, any of the
Finance Documents including (in each case) the fees and expenses of
legal or other professional advisers. Each Lender shall on demand
indemnify the Agent (rateably in accordance with its Commitment or
Contribution) against all liabilities, damages, costs and claims
whatsoever incurred by the Agent in connection with the Finance
Documents or the performance of its duties under the Finance Documents
or any action taken or omitted by the Agent under any of the Finance
Documents, unless such liabilities, damages, costs or claims arise from
the Agent's own gross negligence or wilful misconduct.
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17.13 RETIREMENT OF AGENT
(a) Subject to clause 17.15, the Agent may retire from its
appointment as Agent under this Agreement having given to the
Borrower and each of the Lenders not less than 30 days' notice
of its intention to do so, provided that no such retirement
shall take effect unless there has been appointed by the
Lenders (with the consent of the Borrower pursuant to clause
17.15) as a successor agent:
(i) a Lender nominated by the Majority Lenders; or
(ii) failing such a nomination, any reputable and
experienced bank or financial institution with
offices in London nominated by the Agent.
Any corporation into which the Agent may be merged or
converted or any corporation with which the Agent may be
consolidated or any corporation resulting from any merger,
conversion, amalgamation, consolidation or other
reorganisation to which the Agent shall be a party shall, to
the extent permitted by applicable law, be the successor Agent
under this Agreement without the execution or filing of any
document or any further act on the part of any of the parties
to this Agreement, save that notice of any such merger,
conversion, amalgamation, consolidation or other
reorganisation shall forthwith be given to the parent and the
Lenders.
(b) Upon any such successor as aforesaid being appointed, the
retiring Agent shall be discharged from any further obligation
under this Agreement (but shall continue to have the benefit
of this clause 17 in respect of any action it has taken or
refrained from taking prior to such discharge) and its
successor and each of the other parties to this Agreement
shall have the same rights and obligations among themselves as
they would have had if such successor had been a party to this
Agreement in place of the retiring Agent. The retiring Agent
shall provide its successor with copies of such of its records
as its successor reasonably requires to carry out its
functions under this Agreement.
17.14 SECURITY TRUSTEE AS JOINT CREDITOR
(a) Each Finance Party and each Obligor agrees that the Security
Trustee shall be the joint creditor (together with the
relevant other Finance Party) of each and every payment
obligation of each Obligor towards each of the other Finance
Parties under the Finance Documents and that accordingly the
Security Trustee will have its own independent right to demand
payment by each Obligor in satisfaction of those obligations,
provided that it is expressly acknowledged that any discharge
of any payment obligation to the Security Trustee or the
relevant other Finance Party shall to the same extent
discharge the corresponding obligation owing to the other
party.
111
(b) Without limiting or affecting the Security Trustee's right
against any Obligor (whether under this clause or under any
other provision of the Finance Documents) the Security Trustee
agrees with each other Finance Party (on a several and divided
basis) that it will not exercise its rights as joint creditor
with another Finance Party except with the prior written
consent of the relevant Finance Party. However, for the
avoidance of doubt, nothing in the previous sentence shall in
any way limit the Security Trustee's right to act in the
protection or preservation of rights under or to enforce any
Finance Document as contemplated by the relevant Finance
Document. Any amount recovered by the Security Trustee as a
result of the operation of this clause 17.14 shall be held for
the benefit of each Finance Party to be applied in accordance
with Security Trust Deed.
17.15 BORROWER CONSENT TO CHANGE OF AGENT
(a) If the Agent wishes to retire it must first give the Borrower
at least 10 Business Days' notice of its intention to do so
and such notice shall identify the Person (the "PROPOSED NEW
AGENT") whom it is proposed would be appointed as the new
Agent.
(b) Within 10 Business Days' of service of any notice pursuant to
clause 17.15(a), the Borrower may serve a counter-notice on
the Agent expressly withholding its consent to the appointment
of the Proposed New Agent as Agent (such consent not to be
unreasonably withheld).
(c) If the Borrower does not expressly withhold its consent within
the time period specified in clause 17.15(b) the Borrower
shall be deemed to have given its consent to the appointment
of the Proposed New Agent as Agent.
(d) It shall be deemed unreasonable for the Borrower to withhold
consent, inter alia:
(i) if the Proposed New Agent is a Lender or a Proposed
Transferee under clause 16.3 and the Borrower has
previously withheld its consent to the proposed
appointment of all other Lenders (other than a Lender
who is a Nortel Entity) or Proposed Transferees as
Agent; or
(ii) if:
(A) the Proposed New Agent is a Proposed
Transferee under clause 16.3 from a Nortel
Entity;
(B) such Nortel Entity is the only Lender;
(C) such Proposed Transferee has made it a
condition of transfer that the Proposed
Transferee (or one of its Affiliates) be
appointed Agent; and
112
(D) the Agent, having made reasonable efforts,
is unable to procure a reasonable
alternative Person, other than such Proposed
Transferee, to act as Agent hereunder who
would be reasonably acceptable to the
Borrower, such Proposed Transferee and the
Transferor Lender.
113
18 NOTICES AND OTHER MATTERS
18.1 NOTICES
Every notice, request, demand or other communication under this
Agreement shall:
(a) be in writing delivered personally or by first-class prepaid
letter (airmail if available) or telefax;
(b) be deemed to have been received, subject as otherwise provided
in this Agreement, in the case of a letter when delivered and,
in the case of a telefax, when a complete and legible copy is
received by the addressee (unless the date of despatch is not
a business day in the country of the addressee or the time of
despatch of any telefax is after the close of business in the
country of the addressee in which case it shall be deemed to
have been received at the opening of business on the next such
business day); and
(c) be sent:
(i) to the Borrower at:
Xxxxxxxxxxxxxx 00,
XX-0000,
Xxxxxx
Xxxxxxxxxxx
Attention: General Counsel/ Chief Financial Officer
Fax: 000 000 0000
(ii) to the Agent at:
Nortel Networks,
Loan Administration,
XX Xxx 000000
Xxxxxxxxxx,
Xxxxx
00000-0000
XXX
Attention: Xxxxxxxxx Xxx/ Xxxxxxxxxx Xxxxx, Loan
Administration
Fax: 0 000 000 0000
114
Tel: 0 000 000 0000
(iii) to each Lender: at its address specified in schedule
1 or in any relevant Transfer Certificate,
or to such other address or telefax number as is notified by
the relevant party to the other parties to this Agreement save
that a change of address of the Borrower or a Finance Party
need only be notified to the Agent and the Security Trustee.
18.2 NOTICES THROUGH THE AGENT
Every notice, request, demand or other communication under this
Agreement to be given by the Borrower to any other party shall be given
to the Agent for onward transmission as appropriate and to be given to
the Borrower (or any of them) shall (except as otherwise provided in
this Agreement) be given by the Agent.
18.3 NO IMPLIED WAIVERS, REMEDIES CUMULATIVE
No failure or delay on the part of any party hereto to exercise any
power, right or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise by any party hereto
of any power, right or remedy preclude any other or further exercise
thereof or the exercise of any other power, right or remedy. The
remedies provided in this Agreement are cumulative and are not
exclusive of any remedies provided by law.
18.4 ENGLISH TRANSLATIONS
All certificates, instruments and other documents to be delivered under
or supplied in connection with this Agreement shall be in the English
language or shall be accompanied by a certified English translation
upon which the Agent and the Lenders shall be entitled to rely.
18.5 COUNTERPARTS
This Agreement and each other Finance Document may be executed in any
number of counterparts and by the different parties on separate
counterparts, each of which when so executed and delivered shall be an
original, but all counterparts of the same Finance Document shall
together constitute one and the same instrument.
115
19 GOVERNING LAW AND JURISDICTION
19.1 LAW
This Agreement shall be governed by English law.
19.2 SUBMISSION TO JURISDICTION
For the benefit of the Finance Parties the Borrower irrevocably agrees
that:
(a) the High Court of Justice in England is to have jurisdiction
for all purposes of, or in connection with, the Finance
Documents;
(b) it submits to the jurisdiction of the High Court of Justice in
England; and
(c) any Finance Party may also commence proceedings against the
Borrower in any jurisdiction where the Borrower may have
assets.
19.3 AGENT FOR SERVICE OF PROCESS
The Borrower irrevocably designates, appoints and empowers Carrier 1
U.K. Ltd to receive for it and on its behalf service of process issued
out of the High Court of Justice in England in relation to any claim
arising out of or in connection with the Finance Documents.
IN WITNESS whereof the parties to this Agreement have caused this Agreement to
be duly executed on the date first above written.
116
SCHEDULE 1
THE LENDERS AND THEIR COMMITMENTS
NAME ADDRESS AND TELEFAX PERCENTAGE COMMITMENT
XXXXXX
Xxxxxx Xxxxxxxx XXX Xxxxxxxxx Xxx, Xxxxxxxxx, 000 per cent.
XX0 0XX
01628 432884
117
SCHEDULE 2
PART A
FORM OF DRAWDOWN NOTICE - SUPPLIER FINANCING
To: [Agent]
19
MULTI-CURRENCY FACILITY AGREEMENT
DATED _________________ 1999 (AS FROM TIME TO TIME AMENDED,
VARIED, EXTENDED, RESTATED, REFINANCED OR REPLACED, THE "AGREEMENT")
We refer to the Agreement and hereby give you notice that we wish to
draw down an Advance of [SPECIFY ONE OPTIONAL CURRENCY AND THE AMOUNT
OF SUCH OPTIONAL CURRENCY](1) on _______________19___ and select first
Interest Period in respect of the same to be ___ months. The funds
should be credited to [Nortel Account] in accordance with clauses
4.2(a) and 4.3(e) of the Agreement.
We confirm that:
(a) so far as we are aware, no event or circumstance has occurred
and is continuing which constitutes a Default; and
(b) the representations and warranties contained in clause 10.1 of
the Agreement to be repeated in accordance with clause 10.2 of
the Agreement are true and correct as at the date of this
notice as if made with respect to the facts and circumstances
existing at the date of this notice;
We attach copies of the documentation relating to this Advance as
required under clause 4.3 of the Agreement (the "RELEVANT
DOCUMENTATION"). We warrant that none of the Relevant Documentation has
supported any other Drawdown Notice made by us in respect of an Advance
which has not been repaid in full.
The Advance is to be used for the purpose of financing the acquisition
of Equipment by [SPECIFY NAME OF PURCHASER] (who is a [SPECIFY WHETHER
A SECURED PURCHASER OR AN UNSECURED PURCHASER] ) from [NAME NORTEL
ENTITY WHO IS THE SUPPLIER] under [DESCRIBE CONTRACT E.G. PARTIES/
DATE] in accordance with clause 4.2(a) of the Agreement[.
[The Margin applicable to this Advance pursuant to clause 5.8 of the
Agreement shall be [4] [5] per cent per annum.]
------------------------------------------------------------------------------
(1) If a drawdown in more than one currency is required then separate
Drawdown Notices will be required.
118
Words and expressions defined in the Agreement shall have the same
meanings where used in this notice.
This Drawdown Notice shall be governed by English Law.
For and on behalf of
................................................
as Borrower
119
PART B
FORM OF DRAWDOWN NOTICE - SUPPLIER RE-FINANCING
MULTI-CURRENCY FACILITY AGREEMENT
DATED _______________1999 (AS FROM TIME TO TIME AMENDED,
VARIED, EXTENDED, RESTATED, REFINANCED OR REPLACED, THE "AGREEMENT")
We refer to the Agreement and hereby give you notice that we wish to draw
down an Advance of
[SPECIFY ONE OPTIONAL CURRENCY AND THE AMOUNT OF SUCH OPTIONAL CURRENCY](1)
on ____________19___ and select first Interest Period in respect of the same
to be ____ months. The funds should be credited to [Account Name] in accordance
with clause 4.2(b) of the Agreement.
We confirm that:
(a) so far as we are aware, no event or circumstance has occurred and is
continuing which constitutes a Default; and
(b) the representations and warranties contained in clause 10.1 of the
Agreement to be repeated in accordance with clause 10.2 of the
Agreement are true and correct as at the date of this notice as if made
with respect to the facts and circumstances existing at the date of
this notice.
We attach copies of the documentation relating to this Advance as required under
clause 4.3 of the Agreement including a certified true copy of invoices relating
to this Advance (which were paid on the dates shown below) (the "RELEVANT
DOCUMENTATION"):
[LIST INVOICES AND PAYMENT DATES]
We warrant that none of the Relevant Documentation has supported any other
Drawdown Notice made by us in respect of an Advance which has not been repaid in
full.
The Advance is to be used for the purpose of re-financing the acquisition of
Equipment by [SPECIFY NAME OF PURCHASER] (who is a [SPECIFY WHETHER A SECURED
PURCHASER OR AN UNSECURED PURCHASER] ) from [NAME NORTEL ENTITY WHO IS THE
SUPPLIER] under [DESCRIBE CONTRACT E.G. PARTIES/ DATE] in accordance with clause
4.2(b) of the Agreement.
[The Margin applicable to this Advance pursuant to clause 5.8 of the Agreement
shall be [4] [5] per cent per annum.]
------------------------------------------------------------------------------
(1) If a drawdown in more than one currency is required then separate
Drawdown Notices will be required.
120
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
This Drawdown Notice shall be governed by English Law.
For and on behalf of
................................................
as Borrower
121
PART C
FORM OF DRAWDOWN NOTICE - NON-SUPPLIER FINANCING
To: [Agent]
19
MULTI-CURRENCY FACILITY AGREEMENT
DATED ______________ 1999 (AS FROM TIME TO TIME AMENDED,
VARIED, EXTENDED, RESTATED, REFINANCED OR REPLACED, THE "AGREEMENT")
We refer to the Agreement and hereby give you notice that we wish to draw
down an Advance of
[SPECIFY ONE OPTIONAL CURRENCY AND THE AMOUNT OF SUCH OPTIONAL CURRENCY](1)
on ___________________19___ and select first Interest Period in respect of
the same to be ____ months. The funds should be credited to [SPECIFY ACCOUNT
DETAILS] in accordance with clause 4.2(c) of the Agreement.
We confirm that:
(a) so far as we are aware, no event or circumstance has occurred and is
continuing which constitutes a Default; and
(b) the representations and warranties contained in clause 10.1 of the
Agreement to be repeated in accordance with clause 10.2 of the
Agreement are true and correct as at the date of this notice as if made
with respect to the facts and circumstances existing at the date of
this notice.
We attach a certified true copy of invoices and other documentation as required
under clause 4.3 of the Agreement (the "RELEVANT DOCUMENTATION"). We warrant
that none of the Relevant Documentation has supported any other Drawdown Notice
made by us in respect of an Advance which has not been repaid in full.
The Advance is to be used for the purpose of financing the acquisition of
Equipment by [SPECIFY NAME OF PURCHASER] (who is a [SPECIFY WHETHER A SECURED
PURCHASER OR AN UNSECURED PURCHASER] ) from [NAME VENDOR] under [DESCRIBE
CONTRACT E.G. PARTIES/ DATE] in accordance with clause 4.2(c) of the Agreement[.
[The Margin applicable to this Advance pursuant to clause 5.8 of the Agreement
shall be [4] [5] per cent per annum.]
------------------------------------------------------------------------------
(1) If a drawdown in more than one currency is required then separate
Drawdown Notices will be required.
122
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
This Drawdown Notice shall be governed by English Law.
For and on behalf of
................................................
as Borrower
123
PART D
FORM OF DRAWDOWN NOTICE - NON-SUPPLIER REFINANCING
MULTI-CURRENCY FACILITY AGREEMENT
DATED __________________ 1999 (AS FROM TIME TO TIME AMENDED,
VARIED, EXTENDED, RESTATED, REFINANCED OR REPLACED, THE "AGREEMENT")
We refer to the Agreement and hereby give you notice that we wish to draw
down an Advance of [SPECIFY ONE OPTIONAL CURRENCY AND THE AMOUNT OF SUCH
OPTIONAL CURRENCY](1) on ___________________19___ and select first Interest
Period in respect of the same to be ___ months. The funds should be credited to
[SPECIFY ACCOUNT DETAILS] in accordance with clause 4.2(d) of the Agreement.
We confirm that:
(a) so far as we are aware, no event or circumstance has occurred and is
continuing which constitutes a Default; and
(b) the representations and warranties contained in clause 10.1 of the
Agreement to be repeated in accordance with clause 10.2 of the
Agreement are true and correct as at the date of this notice as if made
with respect to the facts and circumstances existing at the date of
this notice.
We attach copies of the documentation relating to this Advance as required under
clause 4.3 of the Agreement including a certified true copy of invoices relating
to this Advance (which were paid on the dates shown below) as required under
clause 4.3 of the Agreement (the "RELEVANT DOCUMENTATION"):
[LIST INVOICES AND PAYMENT DATES]
We warrant that none of the Relevant Documentation has supported any other
Drawdown Notice made by us in respect of an Advance which has not been repaid in
full.
The Advance is to be used for the purpose of re-financing the acquisition of
Equipment by [SPECIFY NAME OF PURCHASER] (who is a [SPECIFY WHETHER A SECURED
PURCHASER OR AN UNSECURED PURCHASER] ) from [VENDOR] under [DESCRIBE CONTRACT
E.G. PARTIES/ DATE] in accordance with clause 4.2(b) of the Agreement.
[The Margin applicable to this Advance pursuant to clause 5.8 of the Agreement
shall be [4] [5] per cent per annum.]
------------------------------------------------------------------------------
(1) If a drawdown in more than one currency is required then separate
Drawdown Notices will be required.
124
Words and expressions defined in the Agreement shall have the same meanings
where used in this notice.
This Drawdown Notice shall be governed by English Law.
For and on behalf of
................................................
as Borrower
125
SCHEDULE 3
PART A - DOCUMENTS AND EVIDENCE REQUIRED
AS CONDITIONS PRECEDENT TO THE FIRST ADVANCE
(a) Copies, certified as true, complete and up-to-date copies by two
Officers of the certificate of incorporation and Memorandum and
Articles of Association (or equivalent constitutional documents) of the
Borrower.
(b) A copy, certified as a true copy by two Officers of resolutions of the
Board of Directors of the Borrower evidencing approval of this
Agreement and each Security Document to which it is a party (if any)
and authorising its appropriate officers to execute and deliver this
Agreement and each Security Document to which it is a party (if any)
and to give all notices and take all other action required by it under
this Agreement and each Security Document to which it is a party (if
any) including, in the case of the Borrower, Drawdown Notices.
(c) Copies, certified as true and complete (including all amendments and
supplements thereto) each Indenture and the Offering Memoranda.
(d) Copies, certified as true and complete (including all amendments and
supplements thereto) of each Warrant Agreement.
(e) Specimen signatures, authenticated by two Directors of the Borrower of
the persons authorised in the resolutions of the Board of Director
referred to in paragraph (b) above, together with originals of any
powers of attorney granted by the Borrower.
(f) The Business Plan.
(g) Copies, certified as true, complete and up-to-date by two Officers of
the Borrower of each of the documents mentioned in clause 11.2(f)(vii).
(h) An opinion of Xxxxxx Xxxx, solicitors to the Agent, dated no earlier
than the date of this Agreement.
(i) An opinion of Bonn & Xxxxxxx, special legal advisers in Luxembourg to
the Finance Parties, dated no earlier than the date of this Agreement.
(j) A copy of the audited consolidated financial statements of the Borrower
and its Subsidiaries for the financial year ended 31 December 1998.
(k) A report from DDV Telecommunications & Media Consultants
(l) Each Pledge Agreement;
(m) The Fee Letter referred to in clause 7.1(a)
(n) Fees payable under clause 7.1(a).
126
(o) All expenses owed to the Agent pursuant to clause 7.2(a).
(p) Copies, certified as true, complete and up-to-date copies by two
Officers of the Borrower of:
(i) each Material Agreement (save that in respect of Interconnect
Agreements, the conditions precedent shall only be those
listed in sub-paragraph (iii) below); and
(ii) each Licence in respect of the following Relevant
Jurisdictions:
(A) Germany;
(B) the United Kingdom;
(C) Austria;
(D) Belgium;
(E) Denmark;
(F) France;
(G) Ireland;
(H) Italy;
(I) Finland;
(J) Netherlands;
(K) Norway;
(L) Sweden; and
(M) Switzerland; and
(iii) each Interconnect Agreement in respect of the following
Relevant Jurisdictions:
(A) Germany;
(B) the United Kingdom;
(C) Austria;
(D) Belgium;
(E) France;
(F) Italy;
127
(G) Netherlands;
(H) Sweden; and
(I) Switzerland.
128
SCHEDULE 3
PART B - DOCUMENTS AND EVIDENCE UNDER CLAUSE 5.8(a)
(a) Copies, certified as true, complete and up-to-date copies by two
Officers relevant Purchaser of the Memorandum and Articles of
Association of the relevant Purchaser.
(b) Copies, certified as a true copy by two Officers of the Borrower, of
resolutions of the Board of Directors of the relevant Purchaser
evidencing approval of each Security Document to which it is a party
and authorising its appropriate officers to execute and deliver each
Security Document to which it is a party and to give all notices and
take all other action required by it under each Security Document to
which it is a party.
(c) Specimen signatures, authenticated by two Officers, of the persons
authorised in the resolutions of the Board of Directors referred to in
paragraph (b) above, together with originals of any powers of attorney
granted by the relevant Purchaser.
(d) Evidence (including but not limited to acceptance certificates)
reasonably satisfactory to the Agent that the relevant Purchaser has
unencumbered title to the relevant Equipment and that such Equipment
has been accepted under the relevant purchase contract.
(e) Security Documents in respect of the relevant Equipment executed by the
Purchaser.
(f) Security Trust Deed.
(g) An opinion of Xxxxxx Xxxx, solicitors to the Agent.
(h) An opinion of counsel in the Relevant Jurisdiction of the relevant
Purchaser.
(i) An opinion of counsel in the jurisdiction of the relevant Equipment if
the Equipment is to be located in a jurisdiction different to the
Relevant Jurisdiction of the Purchaser.
(j) Purchase Orders.
129
SCHEDULE 4
CALCULATION OF ADDITIONAL COST
(THE ADDITIONAL COST SHALL BE CALCULATED AS IF NORTEL NETWORKS PLC WERE THE
ONLY LENDER)
1 The Additional Cost shall be calculated by the Agent in respect of each
period for which it falls to be calculated relating to an Advance in
accordance with the following formulae:
In relation to Sterling Advance:
CL + S(L - Z) = 0.01F
--------------------- = PER CENT. PER ANNUM
100 - (C + S)
In relation to each other Advance (if any):
0.01F
Y ----- = PER CENT. PER ANNUM
100
Where:
C = The amount required to be held as a non-interest
bearing cash ratio deposit with the Bank of England
expressed as a percentage of an eligible
institution's eligible liabilities (above any stated
minimum).
F = The amount of Sterling per (pound)1,000,000 of the
fee base of an authorised institution payable to the
Financial Services Authority per annum (disregarding
any minimum fee payable under the Fees Regulations).
L = The rate of interest per annum at which Sterling
deposits of an amount comparable to the relevant
Advance are offered by the Agent to leading banks in
the London Interbank Market at or about 11.00 a.m. on
the date of calculation for a period comparable to
the period for which the Additional Cost is to be
calculated.
S = The amount required to be placed as special deposits
with the Bank of England, expressed as a percentage
of an eligible institution's eligible liabilities
(above any stated minimum).
Y = The fraction of foreign currency liabilities taken
into account under the Fees Regulations in
calculating the fee base (disregarding any offset for
claims on non-resident offices).
130
Z = The lower of L and the rate of interest per annum
paid by the Bank of England on special deposits at or
about 11.00 a.m. on the date of calculation.
2 For the purposes of calculating the Additional Cost:
(a) C, L, S and Z are included in the formula as numbers and not
as percentages, e.g. if C = 0.15 per cent. and L = 7 per cent.
CL is calculated as 0.15 x 7;
(b) the formula is applied on the first day of each period for
which it falls to be calculated (and the result shall apply
for the duration of such period);
(c) each amount is rounded up to the nearest four decimal places;
and
(d) if the formula produces a negative percentage, the percentage
shall be taken as zero.
3 If alternative or additional financial requirements are imposed by the
Bank of England, the Financial Services Authority or any other United
Kingdom governmental authority or agency which in the Agent's opinion
(after consultation with the Lenders) make the formulae (or either of
them) no longer appropriate, the Agent shall be entitled by notice to
the Borrower to stipulate such other formulae as shall be suitable to
apply in substitution for the formulae. Any such other formulae so
stipulated shall take effect in accordance with the terms of such
notice.
4 In this schedule 4:
"AUTHORISED" and "INSTITUTION" have the meanings given to those terms
in the Banking Xxx 0000;
"BANK OF ENGLAND ACT" means the Bank of Xxxxxxx Xxx 0000;
"ELIGIBLE INSTITUTION" has the meaning given to that term in schedule 2
to the Bank of England Act;
"ELIGIBLE LIABILITIES" has the meaning given to that term in the Cash
Ratio Deposits (Eligible Liabilities) Order 1999 or the applicable
substitute order made under the Bank of England Act as is in force on
the date of application of the formula;
"FEE BASE" has the meaning given to that term in the Fees Regulations;
"FEES REGULATIONS" means the Banking Supervision (Fees) Regulations
1999 or the applicable substitute regulations made under the Bank of
England Act as are in force on the date of application of the formula;
and
"SPECIAL DEPOSITS" has the meaning given to that term by the Bank of
England on the date of application of the formula.
131
SCHEDULE 5
FORM OF TRANSFER CERTIFICATE
LENDERS ARE ADVISED NOT TO EMPLOY TRANSFER CERTIFICATES WITHOUT FIRST ENSURING
THAT THE TRANSACTION COMPLIES WITH ALL APPLICABLE LAWS AND REGULATIONS,
INCLUDING THE FINANCIAL SERVICES XXX 0000 AND REGULATIONS MADE THEREUNDER.
To: [Agent]
Attention: ______________________19___
TRANSFER CERTIFICATE
This Transfer Certificate relates to an Agreement (as from time to time amended,
varied, extended, restated, refinanced or replaced, the "AGREEMENT") dated
_________________1999 between ________________. Terms defined in the Agreement
shall have the same meaning in this Transfer Certificate.
1 [NAME OF TRANSFEROR LENDER] (the "TRANSFEROR LENDER") (a) confirms the
accuracy of the summary of its Commitment and Contribution set out in
the schedule to this Transfer Certificate; and (b) requests [TRANSFEREE
LENDER] (the "TRANSFEREE") to accept by way of assignment and transfer
the portion of its Commitment and Contribution specified in the
schedule to this Transfer Certificate by counter-signing and delivering
this Transfer Certificate to the Agent at its address for the service
of notices specified in the Agreement.
2 The Transferee requests the Agent (on behalf of itself and the other
parties to the Agreement) to accept this Transfer Certificate as being
delivered to the Agent pursuant to and for the purposes of clause 16.3
of the Agreement, so as to take effect in accordance with its terms on
[DATE OF TRANSFER], (the "EFFECTIVE DATE").
3 The Agent (on behalf of itself and the other parties to the Agreement)
confirms the assignment and transfer effected by this Transfer
Certificate pursuant to and for the purposes of clause 16.3 of the
Agreement.
4 The Transferee confirms:
(a) that it has received a copy of the Agreement and all the
Security Documents and other documentation and information
required by it in connection with the transactions
contemplated by this Transfer Certificate;
(b) that it has made its own assessment of the execution,
effectiveness, adequacy, genuineness, validity, enforceability
and admissibility in evidence of the Agreement, the Security
Documents and this Transfer
132
Certificate and has not relied and will not rely on the
Transferor Lender or any statements made by the Transferor
Lender in that respect;
(c) that it has made and will continue to make its own appraisal
of the creditworthiness of the Security Providers and its own
independent investigation of the financial condition,
prospects and affairs of the Security Providers and has not
relied and will not rely on the Transferor Lender, the Agent,
the Security Trustee or any other Lender or any statement,
opinion, forecast or other representation made by the
Transferor Lender, the Agent, the Security Trustee or any
other Lender in that respect;
(d) accordingly, none of the Transferor Lender, the Agent, the
Security Trustee or any other Lender shall have no liability
or responsibility to the Transferee in respect of any of the
foregoing matters[; and]
(e) it is a Qualifying Person.
5 Execution of this Transfer Certificate by the Transferee constitutes
its representation to the Transferor Lender and all other parties to
the Agreement and the Security Trust Deed that it has power to become
party to the Agreement and the Security Trust Deed as a Lender on the
terms herein and therein set out and has taken all necessary steps to
authorise execution and delivery of this Transfer Certificate.
6 The Transferee acknowledges that the Transferor Lender has no
obligation to repurchase or re-acquire any of the rights and
obligations assigned or transferred by virtue of this Transfer
Certificate or to support, indemnify or compensate the Transferee for
any losses suffered by the Transferee as a consequence of the novation
effected by virtue of this Transfer Certificate.
7 The Transferee hereby undertakes to the Transferor Lender, the Security
Providers, the Security Trustee and the Agent that it will perform in
accordance with their terms all those obligations which by the
respective terms of the Agreement will be assumed by it after
acceptance of this Transfer Certificate by the Agent.
8 This Transfer Certificate is governed by English law.
NOTE: THIS TRANSFER CERTIFICATE IS NOT A SECURITY, BOND, NOTE, DEBENTURE,
INVESTMENT OR SIMILAR INSTRUMENT.
AS WITNESS the hands of the authorised signatories of the parties hereto on the
date appearing below.
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THE SCHEDULE
DOLLAR AMOUNT
AMOUNT OF SECURED/ NEXT INTEREST PORTION OF COMMITMENT PORTION
ADVANCE UNSECURED ADVANCE PAYMENT DATE TRANSFERRED $ TRANSFERRED $
------- ----------------- ------------ ----------- ------------- -------------
ADMINISTRATIVE DETAILS OF TRANSFEREE
Lending office:
Account for payments:
Telephone:
Telefax:
Attention:
[TRANSFEROR LENDER] [TRANSFEREE]
By: By:
Date: Date:
The Agent
By:
on its own behalf
and on behalf of the other parties to the Agreement
Date:
]
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SCHEDULE 6
DOCUMENTS AND EVIDENCE TO BE DELIVERED BY A SUBSIDIARY GUARANTOR
(a) A Subsidiary Guarantee duly executed by the Subsidiary
Guarantor and the Borrower.
(b) A copy of the constitutional documents of each of the
Subsidiary Guarantor.
(c) A copy of a resolution of the board of directors of each of
the Subsidiary Guarantor approving the terms of, and the
transactions contemplated by, the Subsidiary Guarantee and
authorising its Authorised Officers to execute and deliver the
Subsidiary Guarantee and give all notices and take all other
action required by it under the Finance Documents to which it
is party;
(d) A certificate of a director of the Subsidiary Guarantor
certifying that the amounts to be guaranteed by the Subsidiary
Guarantor would not cause any guaranteeing limit binding on it
to be exceeded.
(e) A specimen of the signature of each person authorised by a
resolution referred to in paragraph (c) above.
(f) A legal opinion of English legal advisers, acceptable to the
Agent, addressed to Agent and to the Security Trustee on
behalf of the Finance Parties.
(g) If the Subsidiary Guarantor is incorporated in a jurisdiction
outside England, a legal opinion of legal advisers, acceptable
to the Agent, in the jurisdiction of incorporation of the
Subsidiary Guarantor (as appropriate), addressed to the Agent
and to the Security Trustee on behalf of the Finance Parties.
(h) A certificate of an Authorised Officer of the Subsidiary
Guarantor certifying that each copy document specified in this
schedule 6 and relating to it is correct, complete and in full
force and effect as at a date no earlier than the date of the
Subsidiary Guarantee.
(i) A certificate of an Authorised Officer of the Borrower
confirming that its constitutional documents have not been
amended (or, if they have, enclosing a copy of the amended
constitutional documents) and that all authorisations and
resolutions authorising its appropriate officers to execute
and deliver the Subsidiary Guarantee remain in full force and
effect.
(j) Any other documents as the Agent may reasonably require after
taking the advice of the legal advisers referred to in
paragraphs (g) and (h) above.
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SCHEDULE 7
AGENT'S LETTER
[Headed paper of Agent]
To: [The Borrower]
Dear Sirs,
REQUEST TO DESIGNATE A PURCHASER AS A SECURED PURCHASER
You have indicated to us that you intend to make a Drawdown Request relative to
[IDENTIFY NAME OF PURCHASER] within the next two Banking Days.
Based on the information and documentation you have supplied to us, we confirm
that for the purposes of clause 5.8(c) of the Loan Agreement, such Purchaser
shall be designated a Secured Purchaser.
This letter shall be governed by English law.
Yours faithfully
.............................
(for the Agent)
136
BORROWER
SIGNED for and on behalf of ) /s/ XXXXX XXXXXXX,
CARRIER I INTERNATIONAL ) ------------------------
S.A. ) CHIEF OPERATING OFFICER
/s/ KEES VAN OPHEM
------------------------
VICE PRESIDENT
& GENERAL COUNSEL
LENDERS
SIGNED for and on behalf of ) /s/ XXXX X XXXXXX
NORTEL NETWORKS ) ------------------------
PLC. )
AGENT
SIGNED for and on behalf of ) /s/ XXXX X XXXXXX
NORTEL NETWORKS ) ------------------------
INC. )
137