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EXECUTION COPY
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CREDIT AGREEMENT,
dated as of
June 27, 1997,
among
GLOBAL TELESYSTEMS LTD.,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
DEUTSCHE BANK AG, NEW YORK BRANCH, and
CANADIAN IMPERIAL BANK OF COMMERCE,
as the Lead Agents,
DEUTSCHE BANK AG, NEW YORK BRANCH,
as the Administrative Agent,
and
CANADIAN IMPERIAL BANK OF COMMERCE,
as the Syndication Agent, the Documentation
Agent and the Issuing Bank.
----------------------------------
DEUTSCHE MORGAN GRENFELL INC. and
CIBC WOOD GUNDY SECURITIES CORP.,
as the Arrangers.
----------------------------------
Construction, Working Capital and Term Financing of the
Atlantic Crossing Fiber-optic Submarine Cable System.
================================================================================
TABLE OF CONTENTS
Page
ARTICLE IDEFINITION
SECTION 1.01. Defined Terms.................................................................2
SECTION 1.02. Classification of Loans and Borrowings.......................................35
SECTION 1.03. Terms Generally..............................................................35
SECTION 1.04. Accounting Terms; GAAP.......................................................36
ARTICLE IITHE COMMITMENTS
SECTION 2.01. Commitments. ................................................................36
SECTION 2.02. Loans and Borrowings.........................................................36
SECTION 2.03. Requests for Borrowings......................................................37
SECTION 2.04. Special Provisions for Working Capital Loans.................................38
SECTION 2.05. Letters of Credit............................................................39
SECTION 2.06. Funding of Borrowings........................................................44
SECTION 2.07. Interest Elections...........................................................45
SECTION 2.08. Termination and Reduction of Commitments.....................................46
SECTION 2.09. Repayment of Loans; Evidence of Debt.........................................47
SECTION 2.10. Optional Prepayments of Loans................................................48
SECTION 2.11. Mandatory Prepayments........................................................49
SECTION 2.12. Fees.........................................................................51
SECTION 2.13. Interest.....................................................................52
SECTION 2.14. Alternate Rate of Interest; Illegality.......................................52
SECTION 2.15. Increased Costs..............................................................53
SECTION 2.16. Break Funding Payments.......................................................54
SECTION 2.17. Taxes........................................................................55
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..................57
SECTION 2.19. Mitigation Obligations; Replacement of Lenders...............................58
ARTICLE IIIREPRESENTATIONS AND WARRANTIES
SECTION 3.01. Financial Condition..........................................................59
SECTION 3.02. No Change....................................................................60
SECTION 3.03. Organization; Powers.........................................................60
SECTION 3.04. Authorization; Enforceability................................................60
SECTION 3.05. Corporate Structure..........................................................60
SECTION 3.06. Compliance with Law..........................................................61
SECTION 3.07. No Legal Bar.................................................................61
SECTION 3.08. Governmental Actions.........................................................61
SECTION 3.09. Litigation...................................................................61
SECTION 3.10. Environmental Matters........................................................61
SECTION 3.11. No Default; Event of Default.................................................62
SECTION 3.12. Properties...................................................................62
SECTION 3.13. Taxes........................................................................62
SECTION 3.14. Federal Regulations..........................................................62
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SECTION 3.15. ERISA........................................................................62
SECTION 3.16. Investment Company Act.......................................................62
SECTION 3.17. Security Documents...........................................................62
SECTION 3.18. Principal Place of Business..................................................63
SECTION 3.19. Disclosure...................................................................63
SECTION 3.20. Sufficiency of System Contracts..............................................63
SECTION 3.21. Immunity.....................................................................63
SECTION 3.22. Export Control...............................................................64
SECTION 3.23. Foreign Corrupt Practices Act................................................64
SECTION 3.24. Intellectual Property........................................................64
ARTICLE IVCONDITIONS
SECTION 4.01. Conditions Precedent to the Initial Credit Extensions........................64
SECTION 4.02. Conditions Precedent to Subsequent Credit Extensions.........................71
ARTICLE VAFFIRMATIVE COVENANTS
SECTION 5.01. Financial Statements and Other Information...................................74
SECTION 5.02. Reports......................................................................75
SECTION 5.03. Payment of Obligations.......................................................76
SECTION 5.04. Conduct of Business; System Completion.......................................76
SECTION 5.05. Existence....................................................................76
SECTION 5.06. Compliance with Laws.........................................................76
SECTION 5.07. Performance of Agreements....................................................77
SECTION 5.08. Taxes and Claims.............................................................77
SECTION 5.09. Notices......................................................................77
SECTION 5.10. Insurance....................................................................77
SECTION 5.11. Fiscal Year..................................................................78
SECTION 5.12. Use of Proceeds..............................................................78
SECTION 5.13. Environmental Matters........................................................78
SECTION 5.14. Operating Budgets; Operating Plans...........................................78
SECTION 5.15. Governmental Actions.........................................................79
SECTION 5.16. Cooperation with Independent Engineer........................................79
SECTION 5.17. Spare Parts..................................................................79
SECTION 5.18. Interest Rate Protection.....................................................79
SECTION 5.19. Revenue Account..............................................................79
SECTION 5.20. Maintenance of Process Agent.................................................80
SECTION 5.21. System Operation and Maintenance.............................................80
SECTION 5.22. Event of Loss................................................................80
SECTION 5.23. Books and Records; Inspection Rights.........................................80
SECTION 5.24. Export Control...............................................................80
SECTION 5.25. Foreign Corrupt Practices Act................................................80
SECTION 5.26. Further Assurances...........................................................81
SECTION 5.27. As to Intellectual Property Collateral.......................................81
SECTION 5.28. Future Subsidiaries..........................................................81
SECTION 5.29. Lease........................................................................82
SECTION 5.30. Foreign Subsidiary Collateral; Mortgages.....................................83
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ARTICLE VINEGATIVE COVENANTS
SECTION 6.01. Indebtedness.................................................................84
SECTION 6.02. Liens........................................................................85
SECTION 6.03. Fundamental Changes..........................................................85
SECTION 6.04. Sale of Assets...............................................................85
SECTION 6.05. Investments, Loans, Advances, Guarantees and Acquisitions....................85
SECTION 6.06. Restricted Payments..........................................................87
SECTION 6.07. Amendment of System Contracts, etc...........................................87
SECTION 6.08. Supply Contract..............................................................88
SECTION 6.09. Addition to Configuration....................................................89
SECTION 6.10. Permitted System Upgrades....................................................90
SECTION 6.11. Leases.......................................................................90
SECTION 6.12. Change of Office.............................................................90
SECTION 6.13. Change of Name...............................................................90
SECTION 6.14. Transactions with Affiliates.................................................90
SECTION 6.15. Sale and Leaseback...........................................................91
SECTION 6.16. Approval of Additional Contracts.............................................91
SECTION 6.17. Capital Expenditures.........................................................91
SECTION 6.18. Limitations on Transfer and Issuance of Interests............................91
SECTION 6.19. Unrelated Activities; Abandonment; New Subsidiaries..........................92
SECTION 6.20. Set-off......................................................................92
SECTION 6.21. Changes in Capital Budget....................................................92
SECTION 6.22. Payment of Construction Costs................................................93
SECTION 6.23. Sales of Capacity............................................................93
SECTION 6.24. Financial Covenants..........................................................93
SECTION 6.25. Amendments, etc. of Organizational and Other Documents.......................94
SECTION 6.26. Management and Advisory Fees, etc............................................95
SECTION 6.27. Immunity.....................................................................95
ARTICLE VIIEVENTS OF DEFAULT
SECTION 7.01. Non-Payment of Obligations...................................................95
SECTION 7.02. Breach of Warranty...........................................................95
SECTION 7.03. Non-Performance of Certain Covenants and Obligations.........................96
SECTION 7.04. Involuntary Bankruptcy Proceeding, etc.......................................96
SECTION 7.05. Voluntary Bankruptcy Proceeding, etc.........................................96
SECTION 7.06. Judgments....................................................................97
SECTION 7.07. ERISA........................................................................97
SECTION 7.08. Impairment of Security, etc..................................................97
SECTION 7.09. Commercial Operation.........................................................97
SECTION 7.10. Impairment of System Contract................................................97
SECTION 7.11. Default Under System Contract................................................98
SECTION 7.12. Liquidated Damages...........................................................98
SECTION 7.13. Revocation of Landing License, etc...........................................98
SECTION 7.14. Change in Control............................................................98
SECTION 7.15. Default on Other Indebtedness................................................98
SECTION 7.16. Delay in Construction or Installation........................................99
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ARTICLE VIIIACCOUNTS
SECTION 8.01. Creation of Accounts.........................................................99
SECTION 8.02. Required Deposits into the Accounts.........................................100
SECTION 8.03. Deposits Held as Cash Collateral............................................103
SECTION 8.04. Source of Payments; Deposits Irrevocable....................................103
SECTION 8.05. Books of Account; Statements................................................103
SECTION 8.06. Location of the Accounts....................................................104
SECTION 8.07. Construction Account........................................................104
SECTION 8.08. Revenue Account.............................................................104
SECTION 8.09. Special Payment Account.....................................................108
SECTION 8.10. Debt Reserve Account........................................................109
SECTION 8.11. Holdings Interest Reserve Account...........................................109
SECTION 8.12. Operating Reserve Account...................................................110
SECTION 8.13. Insurance Proceeds Account..................................................111
SECTION 8.14. Clean-Up Account............................................................112
SECTION 8.15. Sales and Issuances Proceeds Account........................................112
SECTION 8.16. Construction Contingency Reserve Account....................................113
SECTION 8.17. VAT Refund Account..........................................................114
SECTION 8.18. Current Account.............................................................114
SECTION 8.19. Subsidiary Accounts.........................................................114
SECTION 8.20. Release of Excess Amounts...................................................115
SECTION 8.21. Acceleration................................................................115
SECTION 8.22. Investment..................................................................115
SECTION 8.23. Value.......................................................................115
SECTION 8.24. Other Determinations........................................................116
SECTION 8.25. Sales of Permitted Investments..............................................116
SECTION 8.26. Available Cash..............................................................116
SECTION 8.27. Termination.................................................................116
SECTION 8.28. Rights of Sales Agent to Commissions........................................116
SECTION 8.29. Conflicts With Other Loan Documents.........................................116
SECTION 8.30. Checking Account............................................................117
SECTION 8.31. Purchaser Escrow Arrangements...............................................117
ARTICLE IXTHE ADMINISTRATIVE AGENT, OTHER AGENTS AND AGENT
RELATED PERSONS
SECTION 9.01. Authorization and Action....................................................117
SECTION 9.02. Exculpation of, and Reliance by, Agents and Agent Related Persons...........118
SECTION 9.03. Agents, Agent Related Persons and Affiliates................................118
SECTION 9.04. Lender Credit Decision......................................................119
SECTION 9.05. Indemnification.............................................................119
SECTION 9.06. Collateral Matters..........................................................120
SECTION 9.07. Successor Administrative Agent..............................................120
ARTICLE XMISCELLANEOUS
SECTION 10.01. Notices....................................................................121
SECTION 10.02. Waivers; Amendments........................................................122
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SECTION 10.03. Expenses; Indemnity; Damage Waiver.........................................123
SECTION 10.04. Successors and Assigns; Consent and Agreement..............................124
SECTION 10.05. Limited Recourse...........................................................127
SECTION 10.06. Survival...................................................................127
SECTION 10.07. Counterparts; Integration; Effectiveness...................................128
SECTION 10.08. Severability...............................................................128
SECTION 10.09. Right of Setoff............................................................128
SECTION 10.10. Governing Law; Jurisdiction; Consent to Service of Process.................128
SECTION 10.11. WAIVER OF JURY TRIAL.......................................................129
SECTION 10.12. Headings...................................................................129
SECTION 10.13. Replacement of Independent Engineer or Insurance Consultant................129
SECTION 10.14. Confidentiality............................................................130
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SCHEDULES:
Schedule 1.01(a) -- Permitted Reserve LC Facility
Schedule 2.01 -- Lenders; Commitments
Schedule 2.09 -- Principal Amortization Table
Schedule 3.05(a) -- Borrower Capital Structure
Schedule 3.05(b) -- Subsidiaries
Schedule 3.08 -- Governmental Actions
Schedule 3.13 -- Taxes
Schedule 3.17 -- Collateral Filings
Schedule 5.10 -- Insurance
EXHIBITS:
Exhibit A-1 -- Form of Working Capital Note
Exhibit A-2 -- Form of Term Note
Exhibit B-1 -- Form of Borrowing Request
Exhibit B-2 -- Form of Issuance Request
Exhibit B-3 -- Form of Borrowing Certificate
Exhibit C -- Form of Continuation/Conversion Notice
Exhibit D -- Form of Assignment and Acceptance
Exhibit E-1 -- Form of Borrower Security Agreement
Exhibit E-2 -- Form of Subsidiary Security Agreement
Exhibit E-3 -- Form of SSI Lender Security Agreement
Exhibit F-1 -- Form of Holdings Pledge Agreement
Exhibit F-2 -- Form of Borrower Pledge Agreement
Exhibit F-3 -- Form of SSI Lender Pledge Agreement
Exhibit G -- Form of Subsidiary Guaranty Agreement
Exhibit H -- Form of Closing Date Certificate
Exhibit I-1 -- Form of Contingency Letter of Credit
Exhibit I-2 -- Form of Retainage Letter of Credit
Exhibit J -- Form of SSI Consent
Exhibit K -- Form of Construction Progress Certificate
Exhibit L -- Form of Pre-approved Capacity Sales Agreement
Exhibit M-1 -- Form of Expense Certificate
Exhibit M-2 -- Form of Article VIII Certificate
Exhibit N -- Form of Participation Certificate
Exhibit O-1 -- Form of Legal Opinion of Appleby, Spurling & Kempe
Exhibit O-2 -- Form of Legal Opinion of Simpson Thacher & Bartlett
Exhibit O-3 -- Form of Legal Opinion of Hogan & Hartson, LLP
Exhibit O-4 -- Form of Legal Opinion of Clifford Chance
Exhibit O-5 -- Form of Legal Opinion of in-house counsel to AT&T
Exhibit O-6 -- Form of Legal Opinion of in-house counsel to SSI
Exhibit O-7 -- Form of Legal Opinion of Davis Polk & Wardwell
-vi-
CREDIT AGREEMENT, dated as of June 27, 1997 (as amended, supplemented,
amended and restated or otherwise modified from time to time, this "Agreement"),
among GLOBAL TELESYSTEMS LTD., a corporation organized and existing under the
laws of Bermuda (the "Borrower"), the financial institutions from time to time
--------
parties hereto as lenders (collectively, the "Lenders"), DEUTSCHE BANK AG, NEW
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YORK BRANCH, and CANADIAN IMPERIAL BANK OF COMMERCE, acting by and/or through
one or more of its branches, agencies or affiliates ("CIBC"), as lead agents for
----
the Lenders (in such capacity, the "Lead Agents"), DEUTSCHE BANK AG, NEW YORK
-----------
BRANCH, as administrative agent for the Lenders (in such capacity, the
"Administrative Agent"), and CIBC, as syndication agent for the Lenders (in such
---------------------
capacity, the "Syndication Agent"), documentation agent for the Lenders (in such
-----------------
capacity, the "Documentation Agent") and issuer of the Letters of Credit
-------------------
referred to herein (in such capacity, the "Issuing Bank").
------------
W I T N E S S E T H :
-------------------
WHEREAS, capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to them in Section 1.01 of this Agreement;
------------
WHEREAS, the Borrower (together with its Subsidiaries) proposes to develop,
construct, own (and lease), provide and sell Capacity on a four fiber pair,
fiber-optic submarine cable system to be known as the Atlantic Crossing Cable
System or AC-1, which is intended to be used to provide direct
telecommunications service between and among the United States, the United
Kingdom and the Federal Republic of Germany (as modified from time to time in
accordance with the terms hereof, the "System");
------
WHEREAS, in order to provide for the design, construction and installation
of the System, the Borrower has entered into the Supply Contract with the
Contractor (and, pursuant to Supplement No. 1 thereto, the Subsidiaries became
or shall become parties thereto);
WHEREAS, the Contractor's obligations with respect to the Work under and as
defined in the Supply Contract are being guaranteed by AT&T Corp. pursuant to,
and subject to the limitations set forth in, the Supply Contract Guaranty;
WHEREAS, in order to provide security for the payment to the Contractor of
amounts owing under the Supply Contract, the Borrower, the Contractor and the
Escrow Agent have entered into the Contractor Escrow and Security Agreement;
WHEREAS, in order to provide for the operation, administration and
maintenance of the System, the Borrower has
-1-
entered into the OA&M Agreement with the Operator (and, pursuant to Supplement
No. 1 thereto, the Subsidiaries became or shall become parties thereto);
WHEREAS, in order to market and sell Capacity, the Borrower has entered
into the Sales Agency Agreement with the Sales Agent;
WHEREAS, certain of the assets located in the United States to be used in
connection with the operation of the System are and/or shall be owned by the
subsidiary of the Contractor referred to herein as SSI Sub 2, which shall grant
an indefeasible right of use and option in favor of the U.S. Subsidiary pursuant
to the SSI IRU and Option Agreement;
WHEREAS, in order to finance a portion of the design, development,
construction and installation of the System, Holdings, the Borrower's parent,
has agreed to make cash equity contributions to the Borrower in an aggregate
amount equal to the Net Equity Funding Commitment;
WHEREAS, in order to finance the remaining portion of the design,
development, construction and installation of the System, the Borrower is
entering into this Agreement pursuant to which the Lenders and the Issuing Bank
have agreed, subject to the terms and conditions set forth herein, to make
certain Credit Extensions to the Borrower; and
WHEREAS, in furtherance of the foregoing and in order to secure and support
the Borrower's obligations to the Lenders and the Issuing Bank under the Loan
Documents, Holdings, the Borrower and the Subsidiaries will enter into the
Security Documents (including with respect to the aforesaid SSI IRU and Option
Agreement) to which they are parties (and the Subsidiaries (other than the
German Subsidiary) will enter into the Subsidiary Guaranty Agreement);
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1. Defined Terms. As used in this Agreement, the following
-------------
terms shall have the meanings specified below:
"ABR" when used in reference to any Loan or Borrowing, refers to whether
---
such Loan, or the Loans comprising such
-2-
Borrowing, are bearing interest at a rate determined by reference to the
Alternate Base Rate.
"Accounts" shall be the collective reference to the Revenue Account, the
--------
Construction Account, the Debt Reserve Account, the Holdings Interest Reserve
Account, the Operating Reserve Account, the Construction Contingency Reserve
Account, the Clean-Up Account, the Insurance Proceeds Account, the Special
Payment Account, the Sales and Issuances Proceeds Account, the Current Account,
the VAT Refund Account, the Subsidiary Accounts and each other "Collateral
Account", together with each sub-account of such accounts, established and
maintained pursuant to Article VIII.
------------
"Actual Date of Commercial Operation" means the date the Borrower receives
-----------------------------------
a Commissioning Report under the Supply Contract demonstrating that the System
is Ready for Commercial Service or Ready for Provisional Acceptance.
"Additional Contracts" means any contract entered into by the Borrower or
--------------------
any Subsidiary after the Closing Date (other than employment contracts and
contracts involving less than $1,000,000 annually).
"Additional Material Contract" means each Additional Contract designated as
----------------------------
an "Additional Material Contract" in accordance with Section 6.16.
------------
"Additional Non-Material Contract" means each Additional Contract
--------------------------------
designated as an "Additional Non-Material Contract" in accordance with Section
-------
6.16.
----
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
------------------
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" is defined in the preamble and includes each of its
-------------------- --------
successors hereunder.
"Advisory Services Agreement" means the Advisory Services Agreement, dated
---------------------------
as of March 25, 1997, between the Borrower and PCG Telecom Services LLC, as the
same may be amended, supplemented, amended and restated or otherwise modified
from time to time in accordance with the terms hereof.
"Advisory Services Fee" means the "Fee", as defined in the Advisory
---------------------
Services Agreement.
"Affiliate" means, with respect to a specified Person, another Person
---------
(other than a subsidiary of the Person specified)
-3-
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agent Related Persons" means the Agents, the Issuing Bank, the Arrangers
---------------------
and their respective officers, directors, partners, agents, employees and
Affiliates and Subsidiaries.
"Agents" is the collective reference to the Administrative Agent, the
------
Syndication Agent, the Documentation Agent and each Lead Agent.
"Agreement" is defined in the preamble.
--------- --------
"Alternate Base Rate" means, for any day, a rate per annum equal to the
-------------------
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Annex H Costs" means the costs set forth on Annex H to the OA&M Agreement.
-------------
"Applicable Percentage" means, with respect to any Lender, the percentage
---------------------
of the total Commitments represented by such Lender's Commitments; provided
--------
that, for purposes of this definition, Lenders obligated to purchase
participations in Working Capital Loans pursuant to Section 2.04(a) shall be
---------------
deemed to have Working Capital Loan Commitments in amounts equal to such
participation obligations and the Working Capital Lenders' Working Capital Loan
Commitments shall be deemed to be ratably reduced by such participation
obligations. If the Commitments have terminated or expired, the Applicable
Percentages shall be determined based upon the Commitments most recently in
effect, giving effect to any assignments.
"Applicable Rate" means, for any day, with respect to any ABR Loans or
---------------
Eurodollar Loans, the applicable rate per annum set forth below under the
caption "ABR Spread" or "Eurodollar Spread", as the case may be:
ABR Spread Eurodollar Spread
---------- -----------------
1.50% 2.50%
The Applicable Rates set forth above shall be reduced by .50% per annum if and
so long as the Sales Threshold has been met when no
-4-
Designated Event or Specified Default shall have occurred and be continuing.
"Arrangers" means CIBC Wood Gundy Securities Corp., a non-banking affiliate
---------
of Canadian Imperial Bank of Commerce, and Deutsche Morgan Grenfell Inc., a non-
bank indirect subsidiary of Deutsche Bank AG, each in its capacity as an
arranger with respect hereto.
"Article VIII Certificate" means each certificate of the Borrower,
------------------------
substantially in the form of Exhibit M-2, delivered pursuant to Article VIII.
----------- ------------
"Assessment Rate" means, for any day, the annual assessment rate in effect
---------------
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
--------
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined by the Administrative Agent to be representative of the cost of
such insurance to the Lenders.
"Assignment and Acceptance" means an assignment and acceptance entered into
-------------------------
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 10.04), and accepted by the Administrative Agent,
-------------
substantially in the form of Exhibit D or any other form approved by the
---------
Administrative Agent.
"AT&T" means AT&T Corp., a New York corporation.
----
"Availability Period" means
-------------------
(a) with respect to any Loan (other than a Loan made to reimburse an
LC Disbursement in accordance with Section 2.05(e)), the period from and
---------------
including the Closing Date to but excluding the earliest of (i) if the
Actual Date of Commercial Operation does not occur prior to the Guaranteed
Completion Date, the Guaranteed Completion Date, (ii) if the Actual Date of
Commercial Operation does occur prior to the Guaranteed Completion Date,
the date on which the Contractor has received payment in full of all
amounts due under the Supply Contract other than the portion thereof
constituting the Final Contractor Payment, and (iii) the date of
termination of the Commitments; and
-5-
(b) with respect to any Loan made to reimburse an LC Disbursement
under any Letter of Credit in accordance with Section 2.05(e), the period
---------------
from and including the date the related Letter of Credit is issued to but
excluding the earliest of (i) the date such Letter of Credit is terminated
in accordance with its terms (other than by reason of a drawing
thereunder), (ii) the date such LC Disbursement is reimbursed in accordance
with Section 2.05(e) from funds other than the proceeds of a Loan, (iii)
---------------
the date which is five Business Days after the date the Borrower receives
notice of such LC Disbursement and (iv) the date of termination of the
Commitments.
"Base CD Rate" means the sum of (a) the Three-Month Secondary CD Rate
------------
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Blockage Event" means the occurrence and continuance of (a) an Event of
--------------
Default arising under Section 7.01, (b) a Default or Event of Default arising
------------
under Section 7.04 or 7.05 (but only if such event is with respect to the
------------ ----
Borrower), (c) a Default arising under Section 7.11 (but only if such Default is
------------
with respect to the Operator or the Contractor) during the period of time the
Operator or the Contractor, as the case may be, is being replaced in accordance
with the terms of such Section 7.11 or (d) an Event of Default arising under
------------
Section 7.11 (but only if such Event of Default is with respect to the Operator
------------
or the Contractor).
"Board" means the Board of Governors of the Federal Reserve System of the
-----
United States of America.
"Borrower" is defined in the preamble.
-------- --------
"Borrower Pledge Agreement" means the Pledge Agreement, dated as of the
-------------------------
date hereof, substantially in the form of Exhibit F-2, made by the Borrower in
-----------
favor of the Administrative Agent, as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time, including as
supplemented by the Foreign Subsidiary Pledge Supplements.
"Borrower Security Agreement" means the Security Agreement, dated as of the
---------------------------
date hereof, substantially in the form of Exhibit E-1, made by the Borrower in
-----------
favor of the Administrative Agent, as the same may be amended, supplemented,
amended and restated or otherwise modified from time to time.
"Borrowing" means Loans of the same Class and Type, made, converted or
---------
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
-6-
"Borrowing Certificate" means a certificate of the Borrower, substantially
---------------------
in the form of Exhibit B-3.
-----------
"Borrowing Date" means the last Business Day of each calendar month.
--------------
"Borrowing Request" means a notice from the Borrower, substantially in the
-----------------
form of Exhibit B-1. Each Borrowing Request shall specify the information
-----------
specified in Section 2.03 and shall be accompanied by a certificate of the
------------
Borrower setting forth all costs which have been incurred and which are to be
paid with the proceeds of the proposed Borrowing (with all applicable invoices
attached). The final Borrowing Request delivered at the end of the Availability
Period shall include a statement certifying all costs set forth in the Capital
Budget which have not yet been funded, which costs will be prefunded into the
Clean-Up Account.
"Business Day" means any day that is not a Saturday, Sunday or other day on
------------
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
--------
the term "Business Day" shall also exclude any day on which banks are not open
------------
for dealings in dollar deposits in the London interbank market.
"Capacity" means S Capacity and/or T Capacity, as the context may require.
--------
"Capacity Sales Agreements" means all agreements for the sale or lease or
-------------------------
other disposition of Capacity entered into between the Borrower or any
Subsidiary and any other Person, as each may be amended, supplemented, amended
and restated or otherwise modified from time to time in accordance with the
terms hereof.
"Capacity Sales Revenue" means the cumulative cash revenue (net of sales
----------------------
commissions) received by the Borrower and its Subsidiaries from the sales of
Capacity and from payments in respect of maintenance charges from customers,
but, in any event, not double counting payments received by the Subsidiaries
from the Borrower under the Intercompany Agreement.
"Capital Budget" shall have the meaning set forth in Section 4.01(h).
-------------- ---------------
"Capital Costs" means all costs and expenses incurred or to be incurred by
-------------
the Borrower or any Subsidiary in connection with the design, development,
installation, construction, completion, start-up and testing of the System (and
shall include, in any event, all interest and other financing costs during
construction incurred or to be incurred by the Borrower, any Subsidiary (if
permitted pursuant to Section 6.01) and Holdings (pursuant to the
------------
-7-
Holdings Note Purchase Agreement)), all payments under Hedging Agreements and
all OA&M Expenses to the extent set forth in the Capital Budget, all as set
forth in the then current Capital Budget.
"Capital Lease Obligations" of any Person, means the obligations of such
-------------------------
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means any and all shares, interests, participation or other
-------------
equivalents (however designated) of capital stock of a corporation, and any and
all equivalent ownership interests in a Person (other than a corporation).
"Casualty Proceeds" all payments received by the Administrative Agent, the
-----------------
Borrower or any Subsidiary from any insurer in respect of casualty to or loss of
property, all awards and proceeds in respect of a taking, but excluding business
interruption insurance or delayed opening of business insurance and payments in
respect of liability policies.
"Casualty Proceeds Deposits" is defined in Section 8.13.
-------------------------- ------------
"Certificate of Commercial Service" is defined in the Supply Contract.
---------------------------------
"Certificate of Final Acceptance" is defined in the Supply Contract.
-------------------------------
"Certificate of Provisional Acceptance" is defined in the Supply Contract.
-------------------------------------
"Change in Control" means and shall be deemed to have occurred if (a) there
-----------------
shall occur any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Borrower and its Subsidiaries to any Person or group of related Persons for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (a
"Group"), together with any Affiliates thereof; (b) the holders of Capital Stock
-----
of the Borrower shall approve any plan or proposal for the liquidation or
dissolution of the Borrower; (c) any Person or Group (other than the Permitted
Holders) shall become, after the Closing Date, the owner, directly or
indirectly, beneficially or of record, of Voting Stock representing more than
35% of the total voting power of all Voting Stock of Holdings or the Borrower;
(d) any "Change of Control" as defined in the Holdings Note Purchase Agreement
-8-
shall occur; (e) there shall be a termination of PCG or its Affiliates under the
Advisory Services Agreement; (f) the Borrower shall cease to be at least a 65%
owned, direct subsidiary of Holdings, with all ownership interests in the
Borrower held by all Persons free and clear of all consensual Liens except Liens
in favor of the Administrative Agent; (g) Holdings shall cease to control a
majority of the seats on the Board of Directors of the Borrower; or (h) the PCG
Group and their respective Affiliates shall cease to own and control, directly
or indirectly, at least 95% of their aggregate initial holdings in Holdings as
of the Closing Date, beneficially and of record.
"Change in Law" means (a) the adoption of any law, rule or regulation after
-------------
the Closing Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Closing Date or (c) compliance by any Lender, any parent of any Lender or the
Issuing Bank with any request, guideline or directive of any Governmental
Authority made or issued after the Closing Date (whether or not having the force
of law).
"Checking Account" is defined in Section 8.02(b).
---------------- ---------------
"CIBC" is defined in the preamble.
---- --------
"Class" when used in reference to any Loan or Borrowing, refers to whether
-----
such Loan, or the Loans comprising such Borrowing, are Working Capital Loans or
Term Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Working Capital Loan Commitment or a Term Loan Commitment.
"Clean-Up Account" means the special account designated by that name
----------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Closing Date" means the date on which this Agreement shall have been
------------
executed and delivered by the parties hereto and the conditions specified in
Section 4.01 are satisfied or waived as evidenced by the making of the initial
------------
Loans.
"Closing Date Certificate" means a certificate of a Responsible Officer of
------------------------
the Borrower, substantially in the form of Exhibit H.
---------
"Code" means the Internal Revenue Code of 1986, as amended from time to
----
time.
"Collateral" means any and all "Collateral", as defined in any applicable
----------
Security Document.
-9-
"Commercial Operation Date" means the earlier of (a) the date the
-------------------------
Certificate of Commercial Service is issued with respect to the System and (b)
the date the Certificate of Provisional Acceptance is issued with respect to the
System.
"Commitment" means the Working Capital Loan Commitment or the Term Loan
----------
Commitment, or a combination thereof (as the context requires).
"Confidential Memorandum" means the Confidential Information Memorandum,
-----------------------
dated April 1997, with respect to Atlantic Crossing U.S.$410,000,000 Senior
Secured Facilities distributed by the Arrangers.
"Consolidated Interest Expense" means, with respect to the Borrower and the
-----------------------------
Subsidiaries for any period, the sum of (a) gross interest expense (including
all cash and accrued interest expense) of the Borrower and the Subsidiaries for
such period on a consolidated basis and (b) that portion of Permitted Senior
Cash Dividends paid during such period in respect of interest on the Holdings
Senior Notes.
"Consolidated Net Income" means, for any period, net income of the Borrower
-----------------------
and the Subsidiaries determined on a consolidated basis in accordance with GAAP.
"Construction Account" means the special account designated by that name
--------------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Construction Contingency Reserve Account" means the special account
----------------------------------------
designated by that name established by the Administrative Agent pursuant to
Section 8.01(a).
---------------
"Construction Progress Certificate" means a certificate from the Contractor
---------------------------------
(and countersigned by the Borrower and the Independent Engineer), substantially
in the form of Exhibit K.
---------
"Consultants" means, collectively, the Independent Engineer, the Market
-----------
Consultant and the Insurance Consultant.
"Contest" means, with respect to any tax, Lien, claim or obligation, a
-------
contest pursued in good faith and by appropriate proceedings diligently
conducted, so long as (a) adequate reserves in accordance with GAAP have been
established with respect thereto, (b) no Lien shall have been filed in
connection therewith or any Lien filed in connection therewith shall have been
removed from the record by the bonding thereof and (c) the failure to pay such
tax, Lien, claim or obligation during the pendency of such contest could not
reasonably be expected to have a Material Adverse Effect.
-10-
"Contingency Letter of Credit" means the reducing Letter of Credit,
----------------------------
substantially in the form of Exhibit I-1, or such other form as agreed to by the
-----------
Borrower, the Contractor, the Administrative Agent and the Issuing Bank, issued
to support the Borrower's obligation to maintain amounts in the Escrow
Contingent Account as contemplated by Sub-Article 5(C)(7) of the Supply
Contract, as such Letter of Credit may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Continuation/Conversion Notice" means a request by the Borrower to convert
------------------------------
or continue a Working Capital Borrowing or a Term Loan Borrowing in accordance
with Section 2.07, substantially in the form of Exhibit C.
------------ ---------
"Contractor" means SSI.
----------
"Contractor Escrow and Security Agreement" means the Escrow and Security
----------------------------------------
Agreement, dated as of March 25, 1997, among SSI, the Borrower and the Escrow
Agent, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with the terms hereof.
"Contractual Obligation" means, as to any Person, any provision of any
----------------------
security issued by such Person or any agreement, instrument, judgment, order,
decree or other undertaking to which such Person is a party or by which it or
any of its property is bound.
"Contract Variation" means any amendment, supplement, waiver, consent or
------------------
other modification to the Supply Contract and shall include any "Contract
Variation" as such term is defined in the Supply Contract.
"Control" means the possession, directly or indirectly, of (a) the power to
-------
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise and/or
(b) the ownership of 10% or more of the securities having ordinary voting power
for the election of directors of a Person. "Controlling" and "Controlled" have
----------- ----------
meanings correlative thereto.
"Credit Extension" means, as the context may require, (a) the making of a
----------------
Loan by a Lender or (b) the issuance of any Letter of Credit, or the extension
of any expiration date of any previously issued Letter of Credit, by the Issuing
Bank.
"Current Account" means the special account designated by that name
---------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
-11-
"Debt Reserve Account" means the special account designated by that name
--------------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Debt Reserve Amount" means, at any time of determination, an amount equal
-------------------
to six months of anticipated interest on the Loans using the interest rate in
effect as of such date with respect to the Loans plus an amount equal to the
next scheduled principal payment on the Loans.
"Default" means any event or condition which constitutes an Event of
-------
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Defaulting Lender" means any Lender with respect to which a Lender Default
-----------------
is in effect.
"Designated Event" means, as of any Principal Payment Date, the Borrower's
----------------
failure to be in compliance with Section 6.24 as of such Principal Payment Date,
------------
as set forth in the certificate delivered by the Borrower to the Administrative
Agent in accordance with Section 5.02(c), or the failure of the Borrower to
---------------
deliver such a certificate when required under Section 5.02(c), and such
---------------
Designated Event shall be deemed to continue until such time as the Borrower
shall have delivered a certificate under Section 5.02(c) indicating compliance
---------------
with Section 6.24 and the Borrower shall be in compliance with Section 6.24.
------------ ------------
"Documentation Agent" is defined in the preamble.
------------------- --------
"Dollars" or "$" refers to lawful money of the United States of America.
------- -
"EBITDA" means, for any period, Consolidated Net Income for such period,
------
plus, without duplication and (other than with respect to amounts included in
----
clause (b) of the definition of Consolidated Interest Expenses) to the extent
----------
deducted from revenues in determining Consolidated Net Income for such period
(a) the aggregate amount of Consolidated Interest Expense for such period, (b)
the aggregate amount of letter of credit fees paid during such period, (c) the
aggregate amount of income tax expense for such period, (d) all amounts
attributable to depreciation and amortization for such period and (e) all non-
cash, non-recurring charges during such period, and minus, without duplication
-----
and to the extent added to revenues in determining Consolidated Net Income for
such period, all non-cash, non-recurring gains during such period, in each case
determined in accordance with GAAP.
-12-
"Environmental Laws" means all applicable laws, rules, permits, orders and
------------------
regulations relating to the protection of the environment and natural resources,
and all similar items under the laws of each jurisdiction (including the United
States, Bermuda, the United Kingdom and the Federal Republic of Germany), where
the Borrower and its Subsidiaries are incorporated and/or operate.
"Environmental Liability" means any liability, contingent or otherwise
-----------------------
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any Subsidiary directly or
indirectly resulting from or based upon (a) violation of any Environmental Law
or (b) the release or threatened release of any Hazardous Materials into the
environment.
"Equity Contributions" means each contribution of cash equity by Holdings
--------------------
to the Borrower to fund the development, construction, installation or ownership
of the System.
"Equity Funding Commitment" means $325,000,000.
-------------------------
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"ERISA Affiliate" means any entity (whether or not incorporated) that,
---------------
together with the Borrower, is treated as a single employer under Section 414(b)
or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section
412 of the Code, is treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
-----------
4043(c) of ERISA or the regulations issued thereunder with respect to a Plan
(other than an event for which the 30-day notice period is waived under
applicable PBGC regulations); (b) the failure to make a required contribution to
any Plan sufficient to give rise to a lien under Section 302(f) of ERISA; (c)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (d) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (e) the taking of any steps by the Borrower or any of its
ERISA Affiliates to terminate any Plan, if such termination could result in any
liability under Title IV of ERISA with respect to such Plan; (f) the receipt by
the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (g) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal,
-13-
within the meaning of Section 4063 of ERISA, from any multiple-employer Plan; or
(h) the receipt by the Borrower or any ERISA Affiliate of any notice from any
Multiemployer Plan concerning the imposition of Withdrawal Liability or a
determination that a Multiemployer Plan is, or is expected to be, insolvent or
in reorganization, within the meaning of Title IV of ERISA.
"Escrow Account" means the "Escrow Account", as defined in the Contractor
--------------
Escrow and Security Agreement.
"Escrow Agent" means The Chase Manhattan Bank, a New York chartered bank,
------------
in its capacity as escrow agent under the Contractor Escrow and Security
Agreement, and each of its successors and assigns as such thereunder.
"Escrow Contingency Requirement" means $50,000,000.
------------------------------
"Escrow Contingent Account" means the "Contingent Account", as defined in
-------------------------
the Contractor Escrow and Security Agreement.
"Escrow Dispute Account" means the "Dispute Account", as defined in the
----------------------
Contractor Escrow and Security Agreement.
"Escrow Payment Account" means the "Payment Account", as defined in the
----------------------
Contractor Escrow and Security Agreement.
"Eurodollar" when used in reference to any Loan or Borrowing, refers to
----------
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" is defined in Article VII.
---------------- -----------
"Event of Loss" means (a) the actual loss or constructive total loss of all
-------------
or substantially all of any Segment of the System or (b) the loss, destruction
or damage of any material portion of a Segment of the System.
"Excess Cash Flow" means, for each semi-annual period ending on a Principal
----------------
Payment Date (or, with respect to the Initial Principal Payment Date, the period
from the Commercial Operation Date to the Initial Principal Payment Date), all
cash revenue received during such period by the Borrower and the Subsidiaries
and available to the Borrower after the application of the amounts set forth in
clauses first through fourth of Section 8.08(d) in accordance with the terms of
------------- ------ ---------------
Article VIII.
------------
"Excluded Taxes" means, with respect to the Administrative Agent, any other
--------------
Agent, any Lender, the Issuing Bank or any other recipient of any payment to be
made by or on account of any obligation of the Borrower hereunder, (a) Taxes
imposed by the jurisdiction under the laws of which such recipient is organized
-14-
or in which its principal office is located or, in the case of any Lender, in
which its applicable lending office is located, (b) any branch profits Taxes
imposed by the United States of America or any similar Tax imposed by any other
jurisdiction in which any Lender is located and (c) in the case of a Lender, any
withholding Tax that is imposed on amounts payable to such Lender unless,
subject to Section 10.04 with respect to assignees, (i) such withholding Tax is
-------------
the result of a Change in Law and (ii) such Lender has complied with the
provisions of Section 2.17(e).
---------------
"Expense Certificate" means each certificate of the Borrower, substantially
-------------------
in the form of Exhibit M-1, delivered pursuant to Section 8.08(b).
----------- ---------------
"Federal Funds Effective Rate" means, for any day, the weighted average
----------------------------
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Final Contractor Payment" means that portion (5%) of the Initial Contract
------------------------
Price which is payable to the Contractor upon System Final Completion.
"First Principal Amortization Reset Date" is the last day of the
---------------------------------------
"Availability Period" as set forth in clause (a) of the definition thereof.
----------
"Foreign Subsidiary Pledge Supplements" means all supplements to the
-------------------------------------
Borrower Pledge Agreement in respect of Subsidiaries of the Borrower
incorporated outside the United States of America, in form and substance
reasonably satisfactory to the Administrative Agent, as the same may be amended,
supplemented, amended and restated or otherwise modified from time to time.
"GAAP" means generally accepted accounting principles in the United States
----
of America.
"German Subsidiary" means the German corporation to be known as Global
-----------------
Telesystems GmbH, which is, as of the Closing Date, in the process of being
formed by the Borrower as a direct, wholly-owned subsidiary of the Borrower.
-15-
"German Subsidiary Account" means the special account of the German
-------------------------
Subsidiary designated by that name established by the Administrative Agent
pursuant to Section 8.01(b).
---------------
"Governmental Action" means all permits, authorizations, registrations,
-------------------
consents, approvals, notices and licenses of or with any Governmental Authority
that are required in connection with the construction, installation and
operation of the System, including all Landing Licenses.
"Governmental Authority" means the government of the United States of
----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
--------- ---------
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
---------------
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include endorsements for
--------
collection or deposit in the ordinary course of business.
"Guaranteed Completion Date" means June 30, 1999.
--------------------------
"Hazardous Materials" means all materials defined as hazardous substances
-------------------
under the Federal Comprehensive Environmental Response, Compensation and
Liability Act, petroleum or petroleum distillates, or friable asbestos or
friable asbestos containing materials, and all similar items under the laws of
each jurisdiction (including the United States, Bermuda, the United Kingdom and
the Federal Republic of Germany) where the Borrower and its Subsidiaries are
incorporated and/or operate.
"Hedging Agreement" means any interest rate protection agreement, foreign
-----------------
currency exchange agreement, commodity price
-16-
protection agreement or other interest or currency exchange rate or commodity
price hedging arrangement.
"Holdings" means Global Telesystems Holdings Ltd., a corporation organized
--------
and existing under the laws of Bermuda.
"Holdings Interest Reserve Account" means the special account designated by
---------------------------------
that name established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Holdings Interest Reserve Amount" means, at any time of determination, an
--------------------------------
amount equal to six months of anticipated interest on the Holdings Senior Notes.
"Holdings Note Purchase Agreement" means the Senior Note Securities
--------------------------------
Purchase Agreement, dated as of March 25, 1997, among Holdings and the
Purchasers named therein, as the same may be amended, supplemented, amended and
restated or otherwise modified from time to time.
"Holdings Pledge Agreement" means the Pledge Agreement, dated as of the
-------------------------
date hereof, substantially in the form of Exhibit F-1, made by Holdings in favor
-----------
of the Administrative Agent, as the same may be amended, supplemented, amended
and restated or otherwise modified from time to time.
"Holdings Senior Notes" means the senior notes issued by Holdings pursuant
---------------------
to the Holdings Note Purchase Agreement.
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person in
respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (d) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (e) all Guarantees by such Person of
Indebtedness of others, (f) all Capital Lease Obligations of such Person, (g)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (h) all obligations under
Hedging Agreements and (i) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
-17-
"Independent Engineer" means Conexart Technologies, Inc. or such other
--------------------
engineer or engineering firm as may be appointed by the Administrative Agent in
accordance with Section 10.13.
-------------
"Initial Contract Price" is defined in the Supply Contract.
----------------------
"Initial Principal Payment Date" means the first May 31 or November 30 (or,
------------------------------
if such day is not a Business Day, the immediately preceding Business Day) to
occur more than two months after the Commercial Operation Date.
"Insurance Consultant" means Sedgwick Energy & Marine Limited or such other
--------------------
insurance consulting firm as may be appointed by the Administrative Agent in
accordance with Section 10.13.
-------------
"Insurance Proceeds Account" means the special account designated by that
--------------------------
name established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Intercompany Agreement" means the Intercompany Agreement, dated as of the
----------------------
date hereof, in form and substance reasonably satisfactory to the Lead Agents,
among the Borrower, the U.S. Subsidiary and the U.K. Subsidiary (and, once the
German Subsidiary is created, the German Subsidiary), as the same may be
amended, supplemented or otherwise modified from time to time.
"Interconnect Agreements" means each agreement entered into by the Borrower
-----------------------
and/or the Subsidiaries with another Person providing for the connection of the
System to any other fiber-optic networks, including backhaul interconnections.
"Interest Coverage Ratio" means, on any date of determination, the ratio of
-----------------------
(a) EBITDA to (b) Consolidated Interest Expense.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
---------------------
Business Day of each February, May, August and November and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar Borrowing, the
---------------
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three, six or, if
available to all Lenders, twelve months thereafter, as the Borrower may elect;
provided, that (a) if any Interest Period would end on a day
--------
-18-
other than a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period and
(c) Interest Periods shall be selected so that sufficient funds are available
without breakage to make scheduled amortization payments on the Loans. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
"Issuance Request" means a Letter of Credit request and certificate duly
----------------
executed by the Borrower, substantially in the form of Exhibit B-2.
-----------
"Issuing Bank" means Canadian Imperial Bank of Commerce and/or any of its
------------
Affiliates reasonably satisfactory to the Borrower, in its capacity as the
issuer of the Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.05(i).
---------------
"Landing Countries" means, at any time of determination, each country in
-----------------
which the System is landed or planned to land at such time. As of the date of
this Agreement, the System is planned to land in the United States, Great
Britain and the Federal Republic of Germany (or, if selected as an alternative
to the Federal Republic of Germany in accordance with the terms of the Supply
Contract, The Netherlands).
"Landing License" means, with respect to any Landing Country, the
---------------
telecommunications license (if a license is required, no such license being
required in the Federal Republic of Germany) issued by a Governmental Authority
in such Landing Country permitting the System to land in such Landing Country.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
---------------
Letter of Credit.
"LC Exposure" means, at any time of determination, the sum of (a) the
-----------
aggregate undrawn amount of all outstanding Letters of Credit at such time plus
(b) the aggregate amount of all LC Disbursements that have not yet been
reimbursed by or on behalf of the Borrower at such time. The LC Exposure of any
Lender at any time of determination shall be its Applicable Percentage of the
total LC Exposure at such time.
"Lead Agents" is defined in the preamble.
----------- --------
-19-
"Lead Agents Fee Letters" means the fee letters, dated as of June 1, 1997,
-----------------------
respectively, between the Borrower and one or both of the Lead Agents.
"Lender Default" means (a) the refusal (which has not been retracted) of a
--------------
Lender to make available its portion of any Borrowing or to fund its portion of
any unreimbursed payment under Section 2.05(e) or (b) a Lender having notified
---------------
the Administrative Agent and/or the Borrower that it does not intend to comply
with its obligations under Section 2.01 or under Section 2.05, in the case of
------------ ------------
either clause (a) or clause (b) above, as a result of the appointment of a
---------- ----------
receiver or conservator with respect to such Lender at the direction or request
of any regulatory agency or authority.
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
------- -------------
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to this
----------------
Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
---------
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
---------
Eurodollar Borrowing for such Interest Period shall be the average rate (rounded
upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are offered by
the principal New York office of each Reference Lender in immediately available
funds in the London interbank market at approximately 11:00 a.m., London time,
two Business Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset (a) any mortgage, deed of trust,
----
lien, pledge, hypothecation, encumbrance, charge, security interest or similar
encumbrance in, on or of such asset and (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention agreement
(or any financing lease having substantially the same economic effect as any of
the foregoing) relating to such asset.
-20-
"Liquidated Damages" means payments made by the Contractor or the Supply
------------------
Contract Guarantor under Article 22 of the Supply Contract.
"Loan Documents" shall be the collective reference to this Agreement, the
--------------
Notes, the Lead Agents Fee Letters, the Security Documents and the Subsidiary
Guaranty Agreement.
"Loan Parties" shall be the collective reference to Holdings, the Borrower
------------
and each Subsidiary.
"Loans" shall be the collective reference to the Working Capital Loans and
-----
the Term Loans.
"Majority Lenders" means, at any time of determination, Non-Defaulting
----------------
Lenders having Working Capital Exposures, LC Exposure, outstanding Term Loans
and unused Commitments representing more than 51% of the sum of the total
Working Capital Exposures, LC Exposure, outstanding Term Loans and unused
Commitments of such Non-Defaulting Lenders at such time.
"Market Consultant" means KMI Corporation or such other market consultant
-----------------
firm as may be appointed by the Borrower and the Administrative Agent.
"Material Adverse Effect" means a material adverse effect on (a) the System
-----------------------
or the ownership thereof, (b) the business, assets, revenues (with respect to
representations and warranties made after the Commercial Operation Date),
results of operations (with respect to representations and warranties made after
the Commercial Operation Date) or financial condition (or, with respect to
representations and warranties made as of the Closing Date only, prospects) of
the Borrower and the Subsidiaries taken as a whole, (c) the ability to achieve
the Actual Date of Commercial Operation by the Guaranteed Completion Date, (d)
the ability of (i) the Borrower, (ii) any of the Subsidiaries (unless curable by
the Borrower or another Subsidiary) or (iii) the Supply Contract Guarantor, to
perform their respective obligations under the Loan Documents or the Systems
Contracts to which it is a party or (e) the validity or enforceability of the
Loan Documents or the Lenders' rights and remedies under the Loan Documents.
"Material Impact" means (a) a material adverse effect on the Lenders, (b) a
---------------
material adverse effect on the Collateral contemplated on the date hereof to be
granted to the Administrative Agent (including under Section 5.30, but excluding
------------
Collateral not comprising the System as contemplated on the date hereof), or the
Lenders' position with respect thereto, (c) a Material Adverse Effect, (d) an
adverse effect on the revenues of the Borrower and the Subsidiaries taken as a
whole or (e) a material delay in obtaining, or a material risk in not obtaining,
-21-
or in the termination or revocation of, a material Governmental Action necessary
to complete or operate the System as contemplated on the date hereof.
"Material Operating Budget Deviation" means, with respect to the Operating
-----------------------------------
Budget for any Operating Year, the payment of any OA&M Expense (excluding Sales
Commissions) which would result in total operating costs (excluding Sales
Commissions) for such Operating Year (after giving effect to all other payments
of OA&M Expenses (excluding Sales Commissions) in such Operating Year, including
all other cost overruns and underruns or other savings with respect to any
budget category) exceeding the total operating costs (excluding Sales
Commissions) set forth in the Operating Budget for such Operating Year, and such
excess, when added to the "Cumulative Overruns" for all prior Operating Years,
would exceed an amount equal to 20% of the "Benchmark Costs" for all Operating
Years (including the current Operating Year). For purposes of this definition,
"Benchmark Costs" shall be the total operating costs (excluding Sales
---------------
Commissions) for each Operating Year set forth in the Operating Plan, and
"Cumulative Overruns" shall be, at any time, an amount equal to the excess of
--------------------
(a) the sum of the actual operating costs (excluding Sales Commissions earned in
accordance with the Sales Agency Agreement) for each complete Operating Year
ended over (b) the sum of the Benchmark Costs for each such complete Operating
----
Year ended.
"Maturity Date" means November 30, 2002.
-------------
"Monthly OA&M Transfer Date" is defined in Section 8.08(b)(i).
-------------------------- ------------------
"Moody's" means Moody's Investors Service, Inc.
-------
"Mortgages" means the mortgages, deeds of trust and other instruments
---------
required to be executed and delivered by Loan Parties owning real property
pursuant to the terms of this Agreement (including Section 5.30 hereof),
------------
creating, in favor of the Administrative Agent for the benefit of the Lenders,
Liens on such real property, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA.
"Net Cash Proceeds" means (a) with respect to the sale, transfer, lease or
-----------------
other disposition of any asset (excluding Capacity) by the Borrower or any
Subsidiary, an amount certified in reasonable detail by a Responsible Officer of
the Borrower to the Lenders as the excess, if any, of (i) the sum of cash
received in connection with such sale, transfer, lease or other disposition over
(ii) the sum of (A) amounts placed in escrow or held as a reserve, in accordance
with GAAP, against any
-22-
liabilities associated with such sale or disposition (except that, to the extent
and as of the time any such amounts are released from such reserve, such amounts
shall constitute Net Cash Proceeds), (B) amounts paid to minority interest
holders of such asset and the principal amount of any Indebtedness (other than
Indebtedness under this Agreement) which is secured by any such asset and which
is repaid in connection with the sale, transfer, lease or other disposition
thereof, (C) the reasonable out-of-pocket expenses incurred or to be incurred by
the Borrower or such Subsidiary in connection with such sale, transfer, lease or
other disposition and (D) provision for taxes attributable to such sale,
transfer, lease or other disposition (as estimated by the Borrower in good
faith, provided that to the extent such estimate shall have exceeded the amount
--------
of taxes actually paid, such difference shall thereupon constitute Net Cash
Proceeds), (b) with respect to the issuance of any Capital Stock by the
Borrower, an amount certified in reasonable detail by a Responsible Officer of
the Borrower to the Lenders as the excess of (i) the sum of the cash received in
connection with such issuance over (ii) the underwriting discounts and
commissions (if any) and other reasonable fees, out-of-pocket expenses and other
costs incurred or to be incurred by the Borrower in connection with such
issuance and (c) with respect to the incurrence of Indebtedness by Holdings or
the Borrower, an amount certified in reasonable detail by a Responsible Officer
of Holdings or the Borrower, as the case may be, to the Lenders as the excess of
(i) the sum of the cash received in connection with such incurrence of
Indebtedness over (ii) the reasonable fees, out-of-pocket expenses and other
costs incurred or to be incurred by Holdings or the Borrower in connection with
such incurrence of Indebtedness.
"Net Equity Funding Commitment" means an amount equal to the Equity Funding
-----------------------------
Commitment minus an amount equal to the sum of (a) the fees, out-of-pocket
expenses and other costs incurred by Holdings in connection with the issuance of
the Holdings Senior Notes and the issuance of its Capital Stock prior to the
Closing Date, (b) that portion of the proceeds of the Holdings Senior Notes
retained by Holdings not exceeding $26,400,000 to provide for an interest
reserve account for the holders of the Holdings Senior Notes, (c) that portion
of the proceeds of the Capital Stock issued prior to the Closing Date retained
by Holdings not exceeding $500,000, (d) that portion of the proceeds of the
Holdings Senior Notes not exceeding $500,000 retained by Holdings to pay for
general and administrative expenses of Holdings and (e) the fees, out-of-pocket
expenses and other expenses incurred by Holdings or the Borrower and paid by
Holdings in connection with the transactions contemplated hereby or by any of
the foregoing; provided, that the amounts set forth in clauses (a) through (e)
-------- ----------- ---
are consistent with the Capital Budget.
-23-
"Non-Defaulting Lender" means and includes each Lender other than a
---------------------
Defaulting Lender.
"Non-Material System Contracts" shall be the collective reference to the
-----------------------------
Advisory Services Agreement, the SSI Indemnity Agreement, the SSI Subordinated
Pledge Agreement, the SSI Subordinated Security Agreement, the Intercompany
Agreement, each Additional Non-Material Contract and the Contractor Escrow and
Security Agreement.
"Notes" shall be the collective reference to the Term Notes and the Working
-----
Capital Notes.
"OA&M Agreement" means the Operations, Administration and Maintenance
--------------
Agreement, dated as of March 25, 1997, between the Borrower and the Operator, as
the same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"OA&M Expenses" means all operation, administration and maintenance
-------------
expenses with respect to the System which are payable by the Borrower or any
Subsidiary (including all selling, general and administrative expenses, all
commissions on sales of Capacity, all amounts in respect of reimbursements
payable under Section 2(b) of the Advisory Services Agreement, all sales, excise
and similar taxes, all other taxes and duties payable by the Borrower or such
Subsidiary and all payments owing to the Operator under the OA&M Agreement in
respect of work performed thereunder); provided, however, that OA&M Expenses
-------- -------
shall not include (i) prior to the Commercial Operation Date, amounts payable
which are Capital Costs and are set forth in the Capital Budget, (ii) amounts
payable in respect of Permitted System Upgrades and Permitted Costs, (iii) any
non-cash expenses, (iv) income and franchise taxes payable by any Subsidiary,
(v) all payments made to the Subsidiaries under the Intercompany Agreement and
(vi) the Advisory Services Fee.
"Obligations" is defined in the Borrower Security Agreement.
-----------
"Obligors" shall be the collective reference to the Borrower, Holdings, the
--------
Subsidiaries, the Contractor (until the expiration of the basic warranty period
under the Supply Contract) and, prior to the performance of all obligations
under the Supply Contract Guaranty, the Supply Contract Guarantor.
"Operating Budget" is defined in Section 5.14.
---------------- ------------
"Operating Budget Deviation" means, with respect to the Operating Budget
--------------------------
for any Operating Year, the payment of any OA&M Expense (excluding Sales
Commissions) which would result in total operating costs (excluding Sales
Commissions) for such Operating Year (after giving effect to all other payments
of OA&M Expenses
-24-
(excluding Sales Commissions) in such Operating Year, including all other cost
overruns and underruns or other savings with respect to any budget category)
exceeding the total operating costs (excluding Sales Commissions) set forth in
the Operating Budget for such Operating Year by more than 5%.
"Operating Plan" is defined in Section 5.14.
-------------- ------------
"Operating Reserve Account" means the special account designated by that
-------------------------
name established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"Operating Reserve Amount" means, at any time of determination, an amount
------------------------
equal to six months of anticipated operating expenses in accordance with the
then current Operating Budget of the Borrower and the Subsidiaries.
"Operating Year" means, initially, the period from the date the United
--------------
States to United Kingdom segment of the System becomes operational to the
following December 31st and, thereafter, each ensuing calendar year.
"Operator" means SSI.
--------
"Other Taxes" means any and all present or future stamp or documentary
-----------
Taxes, charges or similar levies arising from any payment hereunder or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement.
"Participation Certificate" is defined in Section 2.04(a).
------------------------- ---------------
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"PCG" means Pacific Capital Group, Inc., a California corporation.
---
"PCG Group" means, collectively, PCG and such Persons who were principals,
---------
officers, directors or employees of PCG as of the Closing Date (whether at any
future time such Person ceases to be such) and any other Person who becomes a
principal, officer, director or employee of PCG after the Closing Date.
"Perfectible Collateral" is defined in Section 3.17.
---------------------- ------------
"Permitted Costs" means (a) all amounts due under the Supply Contract
---------------
(including, in respect of Permitted System Upgrades), (b) any and all amounts
due in connection with any change to the configuration of the System permitted
under Section 6.09, (c) any and all amounts due in respect of any capital
------------
expenditure permitted under Section 6.17 and (d) any other amount applied to
------------
-25-
costs of the type set forth in Section 8.08(b), Section 8.08(c) or in clauses
--------------- --------------- -------
first through fourth of Section 8.08(d).
----- ------ ---------------
"Permitted Encumbrances" means:
----------------------
(a) Liens imposed by law for taxes that are not yet due or are being
contested in accordance with Section 5.03;
------------
(b) (i) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens relating to the construction of the System
or (ii) other Liens arising in the ordinary course of business and securing
obligations that are not overdue by more than 60 days or are being
contested in accordance with Section 5.03;
------------
(c) any Liens on any portion of the System arising by operation of
law through the Contractor (or any of its subcontractors);
(d) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(e) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;
(g) Liens arising under any Loan Document or System Contract;
(h) Liens arising under the Contractor Escrow and Security Agreement;
(i) Liens granted by the German Subsidiary in favor of the Borrower
under the security agreement entered into in accordance with Section
-------
5.30(b);
-------
(j) the rights of any purchaser of Capacity with respect to the use
of portions of the System as set forth or referred to in the Capacity Sales
Agreements; and
(k) Liens arising out of judgments or awards with respect to which
appeals or other proceedings for review are
-26-
being prosecuted in good faith and by appropriate proceedings diligently
conducted and for the payment of which adequate reserves have been provided
or other provisions reasonably satisfactory to the Administrative Agent
have been made.
"Permitted Holders" means each of PCG, PCG Telecom LDC, CIBC and their
-----------------
respective Affiliates.
"Permitted Investments" means:
---------------------
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, a
credit rating of at least A-1 from S&P or at least P-1 from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and overnight sweep accounts, money
market deposit accounts issued or offered by, (i) the Administrative Agent
or any of its Affiliates, (ii) any Lender or (iii) any other bank which has
a combined capital and surplus and undivided profits of not less than
$250,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered
----------
into with a financial institution satisfying the criteria described in
clause (c) above; and
----------
(e) with respect to the investment of funds on deposit in the
Contractor Escrow and Security Agreement, investments permitted by the
Contractor Escrow and Security Agreement.
"Permitted Reserve LC Facility" means a letter of credit facility for the
-----------------------------
Borrower consistent with the terms set forth on Schedule 1.01(a).
----------------
"Permitted Sale Leasebacks" means leases or sale leasebacks of real and
-------------------------
personal property constituting a portion of the System, provided that (a) such
--------
leases or sale leasebacks shall be undertaken for fair value pursuant to a tax
program reasonably
-27-
satisfactory to the Lead Agents recommended by Arthur Andersen, LLP or such
other tax consultant of national standing retained by the Borrower that is
reasonably satisfactory to the Lead Agents and (b) the Net Cash Proceeds of any
sale of assets undertaken in connection therewith shall be applied to the
prepayment of the Term Loans in accordance with Section 2.11(c).
---------------
"Permitted Senior Cash Dividends" means, with respect to any fiscal year of
-------------------------------
the Borrower, cash dividends paid by the Borrower in an amount not to exceed (a)
so long as the Holdings Senior Notes remain outstanding, the lesser of (i)
$19,000,000 and (ii) the actual amount necessary to pay interest on the Holdings
Senior Notes, as certified by a Responsible Officer of the Borrower to the
Administrative Agent, plus $1,000,000 and (b) $1,000,000 thereafter (in each
case exclusive of any cash dividends paid by the Borrower under Section 6.06(d),
---------------
(e) and (f)).
--- ---
"Permitted Subordinated Debt" means Indebtedness of the Borrower which has
---------------------------
(a) no principal payments, redemptions, repurchases, sinking funds or
prepayments prior to the date which is one year after the payment in full in
cash of all Loans and other obligations hereunder and under the Loan Documents,
(b) no cash interest payments except to the extent permitted by Section 6.06(d)
---------------
hereof, provided that, in any event, unless the Majority Lenders otherwise
--------
agree, no cash interest payments are permitted with respect thereto so long as
any Event of Default, Specified Default or Designated Event shall have occurred
and be continuing, and (c) interest rate, interest payment date, subordination,
covenants, defaults and other terms and conditions reasonably satisfactory to
the Lead Agents.
"Permitted System Upgrades" means upgrades to the System contemplated by
-------------------------
Article 6A of the Supply Contract.
"Person" means any natural person, corporation, limited liability company,
------
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
----
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Plan of Work" means the plan of work attached as Appendix 3 to the Supply
------------
Contract, as the same may be amended, supplemented, amended and restated or
otherwise modified from time to time.
-28-
"Pledge Agreements" shall be the collective reference to the Holdings
-----------------
Pledge Agreement, the Borrower Pledge Agreement and the SSI Lender Pledge
Agreement.
"Presale Proceeds" means cash proceeds (net of sale commissions) received
----------------
by the Borrower and/or the Subsidiaries under Capacity Sales Agreements on or
prior to the Commercial Operation Date.
"Prime Rate" means the rate of interest per annum established by Deutsche
----------
Bank AG as its prime or reference or base rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is effective. The Prime Rate is not necessarily
the lowest rate of interest charged to borrowers.
"Principal Payment Date" means the Initial Principal Payment Date and each
----------------------
May 31 and November 30 (or, if such day is not a Business Day, the immediately
preceding Business Day) occurring thereafter.
"Projections" means the reasonably detailed operating projections for the
-----------
System which were delivered by the Borrower to the Administrative Agent and the
Arrangers prior to the date hereof and which reflect the reasonable expected
case (and not worst case) projections of the revenues, operating expenses, cash
flow, debt service and other related items for the System.
"Quarterly Advisory Services Payment Date" means (a) initially, the
----------------------------------------
Initial Principal Payment Date and (b) thereafter, each quarterly date which
occurs on the last business day of the applicable month.
"Ready for Commercial Service" is defined in the Supply Contract.
----------------------------
"Ready for Provisional Acceptance" is defined in the Supply Contract.
--------------------------------
"Reference Lenders" means CIBC Inc., Deutsche Bank AG, New York Branch, and
-----------------
BHF-Bank Aktiengesellschaft, Grand Cayman Branch.
"Register" has the meaning set forth in Section 10.04(c).
-------- ----------------
"Related Parties" means, with respect to any specified Person, such
---------------
Person's Affiliates and subsidiaries and the respective directors, officers and
employees of such Person and such Person's Affiliates and subsidiaries.
"Required Balance" means (a) with respect to the Debt Reserve Account, the
----------------
Debt Reserve Amount, (b) with respect to the
-29-
Operating Reserve Account, the Operating Reserve Amount and (c) with respect to
the Holdings Interest Reserve Account, the Holdings Interest Reserve Amount.
"Required Lenders" means, at any time of determination, Non-Defaulting
----------------
Lenders having Working Capital Exposures, LC Exposure, outstanding Term Loans
and unused Commitments representing more then 66-2/3% of the sum of the total
Working Capital Exposures, LC Exposures, outstanding Term Loans and unused
Commitments of such Non-Defaulting Lenders at such time.
"Requirement of Law" means, as to any Person, the Certificate of
------------------
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule, judgment, decree, order or regulation of any
Governmental Authority, and any determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Reserve Accounts" means the collective reference to the Debt Reserve
----------------
Account, the Operating Reserve Account and the Holdings Interest Reserve
Account.
"Responsible Officer" means, with respect to any matter, with respect to
-------------------
any Person, the President, any Vice President, Assistant Vice President,
Treasurer or Assistant Treasurer of such Person, or any other officer of such
Person who in the normal performance of his operational responsibility would
have knowledge of such matter and the requirements, if any, with respect
thereto.
"Restricted Payment" means any dividend or other distribution (whether in
------------------
cash, securities or other property) with respect to any shares of any class of
Capital Stock of the Borrower or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such shares of Capital Stock of the Borrower
or any Subsidiary (or in respect of any Permitted Subordinated Debt) or any
option, warrant or other right to acquire any such shares of Capital Stock of
the Borrower or any Subsidiary.
"Retainage Issuance Date" means the date on which the Contractor receives
-----------------------
payment in full of all amounts due under the Supply Contract other than the
portion thereof constituting the Final Contractor Payment, provided that the
--------
Contingency Letter of Credit shall have been returned by the Borrower to the
Issuing Bank or terminated or expired or, if drawn, the related LC Disbursement
shall have been reimbursed in full to the Issuing Bank.
-30-
"Retainage Letter of Credit" means the letter of credit substantially in
--------------------------
the form of Exhibit I-2 or such other form as agreed by the Borrower, the
-----------
Contractor, the Administrative Agent and the Issuing Bank, as such letter of
credit may be amended, supplemented, amended and restated or otherwise modified
from time to time.
"Revenue Account" means the special account designated by that name
---------------
established by the Administrative Agent pursuant to Section 8.01(a).
---------------
"S Capacity" means that capacity on the System which is available on the S
----------
Segments.
"S Segments" is defined in the form of Capacity Sales Agreement attached as
----------
Exhibit L.
---------
"Sales Agency Agreement" means the Sales Agency Agreement, dated as of
----------------------
March 25, 1997, between the Borrower and the Sales Agent, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"Sales Agent" means SSI.
-----------
"Sales Commissions" means sales commissions payable to the Sales Agent
-----------------
under the Sales Agency Agreement, but not including expense reimbursement and
other obligations payable thereunder.
"Sales and Issuances Proceeds Account" means the special account designated
------------------------------------
by that name established by the Administrative Agent pursuant to Section
-------
8.01(a).
"Sales Threshold" means at any date of determination, when the sum of (a)
---------------
an amount equal to all cash payments received by the Borrower and the
Subsidiaries on or prior to such date under Capacity Sales Agreements entered
into in accordance Section 6.23 plus (b) an amount equal to the aggregate amount
------------ ----
of firm commitments outstanding as of such date for the sale of Capacity entered
into in accordance with Section 6.23 (provided that such firm commitments shall
------------
be included for