REVOLVING CREDIT AGREEMENT
Dated as of April 8, 2002
Among
Convergence Communications, Inc.,
Latin American Broadband, Inc.
And
Internexus S.C.A.
THIS CREDIT AGREEMENT, dated as of April 8,2002 (the "Credit
Agreement"), is among Convergence Communications, Inc., a Nevada corporation
("CCI"), Latin American Broadband, Inc., a Nevada corporation ("Company"), and
Internexus, S.C.A., a Uruguayan entity ("Lender").
WHEREAS, Company is a wholly-owned subsidiary of CCI;
WHEREAS, Company desires to borrow from Lender, on the terms and
conditions set forth herein, up to $4.0 million in order to provide working
capital for the Company;
WHEREAS, as a condition to the Lender advancing funds hereunder, Lender
has required each of the shareholders who have the right under the Amended and
Restated CCI Shareholders Agreement, dated September 11, 2001 (the "Shareholders
Agreement") to nominate directors of CCI (the "CCI Shareholders") to execute the
Pledge Agreement, dated as of April 9,2002, among the CCI Shareholders and the
Lender in the form attached as Exhibit A (the "Pledge Agreement");
WHEREAS, the CCI Shareholders have agreed to execute the Pledge
Agreement as security for the obligations of the Company under this Credit
Agreement; and
WHEREAS, in consideration of the foregoing, the Lender is willing, on
the terms and conditions set forth in this Credit Agreement, to make the
Advances (as defined below) to the Company.
NOW, THEREFORE, in consideration of the mutual agreements set forth in
this Agreement and the Pledge Agreement, and subject to the terms and conditions
hereof and thereof, the parties to this Credit Agreement agree as follows:
1. Advances of Principal. On the terms and subject to the conditions
set forth in this Credit Agreement, Lender will make advances to the Company
("Advances") as set forth below, in a principal amount outstanding at any time
not to exceed Four Million Dollars ($4,000,000) (the "Committed Amount") On the
Closing Date, subject to the satisfaction of the conditions set forth in Section
9.8, the Lender shall make an Advance to the Company of Two Million Dollars
($2,000,000) (the "Initial Advance"). Subject to the terms and conditions of
this Credit Agreement, Lender shall make an Advance of the balance of the
Committed Amount, Two Million Dollars ($2,000,000), to the Company thirty (30)
days after the date hereof (the "Second Advance"). Subject to the terms of this
Credit Agreement after the date of the Second Advance and through the tenth
business day preceding the Scheduled Maturity Date, the Company may from time to
time prepay and reborrow Advances up to the Committed Amount ("Subsequent
Advances"). Lender shall maintain an account or accounts evidencing the
indebtedness of the Company resulting from each Advance owing to Lender from
time to time, including the amounts of principal and interest payable and paid
to Lender from time to time hereunder. The entries made in such account or
accounts shall be conclusive and binding for all purposes, absent manifest
error.
2. Maturity Date. Unless otherwise extended by the Lender as provided
in this Article 2, the principal amount hereof and interest thereon shall be
payable in full on the earliest to occur of the following (the "Maturity Date"):
(i) July 9, 2002 (the "Scheduled Maturity Date"), (ii) a change of control of
either of the Company or CCI (a "Control Transaction"), (iii) the liquidation,
winding up or dissolution of the Company or CCI or the sale of all or
substantially all of the assets of either of the Company or CCI (a "Liquidation
Transaction"), or (iv) the issuance of equity securities in a transaction the
terms of which are negotiated by a bona fide third party investor who is not an
existing CCI Shareholder or an affiliate of any such entity (an "Equity
Transaction"). As used in this Credit Agreement, the term "change of control"
shall mean the approval by CCI's or the Company's board of directors (or if
approval of the shareholders of CCI or the Company is required as a matter of
law, the approval of CCI or the Company's shareholders) of (1) any consolidation
or merger of CCI or the Company in which CCI or the Company, as appropriate, is
not the continuing or surviving corporation or pursuant to which shares of the
common stock of CCI or the Company, as appropriate, would be converted into
cash, securities or other property, other than a merger of CCI or the Company in
which the holders of common stock of CCI or the Company immediately prior to the
merger have the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (2) any person or entity (or group
of affiliated persons or entities) shall, as a result of tender or exchange
offer, open market purchases, privately-negotiated purchases, issuances by CCI
or otherwise, becomes the beneficial owner (within the meaning of Rule 13d-3
under the Securities Exchange Act of 1934, as amended), directly or indirectly
of the then-outstanding securities of CCI or the Company representing more than
fifty percent (50%) of the combined voting power of the then-outstanding voting
securities of CCI or the Company. On the Maturity Date, the Lender shall have
the option to renew this Credit Agreement upon the same terms and conditions
(including with respect to interest) for up to two additional sixty (60) day
periods.
3. Interest. Interest on the unpaid principal amount hereof shall
accrue at the rates detailed below:
(a) from the date of any advance hereunder and with respect
to such advance and until the Maturity Date (as extended pursuant to Article 2),
at a rate of twenty-five percent (25%) per annum, computed on the basis of a
365-day year; and
(b) upon the occurrence and continuance of an Event of
Default until the principal amount of the Credit Agreement and the interest
thereon are paid in full, at a rate of thirty percent (30%) per annum, computed
on the basis of a 365-day year.
4. Payment.
4.1 Optional Prepayment. The Company may prepay all, or less than
all, of the amounts advanced under this Credit Agreement at any time upon five
(5) days' prior written notice to the Lender. All payments received shall first
be applied to accrued and unpaid interest and then to principal. All principal
amounts prepaid may be reborrowed in accordance with Article 2.
4.2 Payment of Amounts. The principal amounts advanced under this
Credit Agreement, and the interest thereon, shall be paid in lawful currency of
the United States of America, in immediately available funds to such account at
such bank or other place outside of the United States as the Lender may
designate on the Maturity Date (as defined in Article 2).
4.3 Taxes. From and after the date the Company receives a
Certificate of Foreign Status of the Lender (and any replacement certificate for
any assignee of a Lender), all amounts advanced under this Credit Agreement will
be paid free and clear of, and without deduction for on or account of, any
present or future taxes, duties, levies, imposts or other changes or deductions
of any kind, nature or description whatsoever imposed by the United States of
America or any political subdivision or taxing authority thereof, including
those which may be required or permitted to be deducted or withheld therefrom.
If, in order to make any payment under this Credit Agreement, the Company shall
be required by any law to make any such deduction or withholding therefrom or to
make any tax payment with respect thereto under the laws of the United States of
America, then the Company will forthwith pay to the Lender such additional
amount as will result in the receipt by the Lender of the full amount which
would otherwise have been received by Lender under this Credit Agreement had no
such deduction or withholding been made or no such tax been paid.
5. Liquidation and Control Transaction Payment. Except as provided in
the next sentence, at the Maturity Date, the Company shall pay to the Lender an
amount equal to the greater of (A) the amounts then outstanding hereunder,
together with interest thereon, or (B) an amount equal to two hundred percent
(200%) of the Committed Amount. The amount due on the Maturity Date shall be
calculated pursuant to clause (A) of the preceding sentence in the event that
the Company or CCI enters into a definitive agreement for a Control Transaction,
Liquidation Transaction or Equity Transaction on or before the Scheduled
Maturity Date and any of such transactions closes before September 30, 2002, or,
if pursuant to Article 4.1, the Company pays all then-outstanding Advances,
together with interest thereon as provided in Article 3, on or before the
Scheduled Maturity Date pursuant to other than a Control Transaction,
Liquidation Transaction or Equity Transaction. If the Company has not paid all
advances (together with interest thereon) on or before the Scheduled Maturity
Date but the Company or CCI enters into a definitive agreement for a Control
Transaction, Liquidation Transaction or Equity Transaction on or before the
Scheduled Maturity Date, the Maturity Date of this Agreement for purposes of
calculating the payment under this Article 5 pursuant to clause (A) shall be
deemed the date of the closing of the Control Transactions, Liquidation
Transaction or Equity Transaction, as long as that transaction closes no later
than September 30, 2002.
6. Representations. To induce Lender to enter into this Agreement and
to make the advances provided for herein, each of CCI and the Company, jointly
and severally, represents and warrants to the Lender as of the date hereof that:
6.1 Financial Condition. The unaudited consolidated and
consolidating financial statements of CCI as of February 28, 2002, prepared by
the CCI, copies of which have been furnished to Lender, are complete and correct
and present fairly the financial condition and results of operations of CCI and
the Subsidiaries as of such dates and for such periods. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except for normal year and audit adjustments consistent with prior
practice). Neither CCI nor the Company has any contingent liability or liability
for taxes, or any long-term lease or unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction, which is not reflected in the foregoing statements or in
the notes thereto.
6.2 No Change. Since February 28, 2002 (a) except as set forth
below, there has been no material adverse change in the condition (financial or
otherwise), properties, assets, liabilities, business, operations or prospects
of the Company or CCI, as the case may be, and (b) no dividends or other
distributions have been declared, paid or made upon the capital stock of the
Company or CCI, or upon any warrants or options to purchase any of the
foregoing, nor has any of the capital stock of the Company or CCI been redeemed,
retired, purchased or otherwise acquired for value by the Company or CCI, and
there has been no sale, transfer or other disposition by the Company or CCI of
any material part of either of their businesses or properties and no purchase or
other acquisition of any business or property (including any capital stock of
any other person or entity). Since February 28, 2002, the Company and CCI have
accrued additional payables outside of the normal course of payment practice
(including with respect to Telefonos de Mexico), have failed to pay payments due
under certain long-term obligations to Cahabon Holdings, Inc., Jorge Figuereo
Cruz and Transworld Telecommunications, Inc., and have failed to pay severance
payments to certain former employees.
6.3 Organization. Each of the Company and CCI (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada, and (b) has all requisite corporate power and authority to own,
lease and operate its properties, to carry on its business as presently
conducted and as proposed to be conducted, and to execute, deliver and perform
this Credit Agreement and the documents to be delivered pursuant to this Credit
Agreement.
6.4 Authorization; Binding Effect. The execution, delivery, and
performance by the Company and CCI of this Credit Agreement and the documents to
be delivered pursuant to this Credit Agreement have been duly authorized by all
requisite corporate action by the Company and CCI, respectively. This Credit
Agreement and the documents to be delivered pursuant to this Credit Agreement
have been duly executed and delivered by each of the Company and CCI and
constitute each of the Company's and CCI's legal, valid and binding obligations,
enforceable in accordance with their respective terms, subject to bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors' rights
in general, and general principles of equity. Neither the Company nor CCI need
give any notice to, make any filing with, or obtain any authorization, consent
or approval of any government or government agency in order to consummate the
transactions contemplated by this Credit Agreement.
6.5 Noncontravention. Neither the execution and the deliver of
this Credit Agreement, nor the consummation of the transactions contemplated
hereby, will (A) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other restriction of any
government, governmental agency, or court to which either of the Company or CCI
is subject or any provision of its Amended and Restated Certificate of
Incorporation, as amended, or Bylaws, or (B) conflict with, result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, any agreement,
contract, lease, license, instrument, or other arrangement to which either of
the Company or CCI is a party or by which either the Company or CCI is bound or
to which any of their respective assets is subject.
6.6 Continuation of Service. Telefonos de Mexico has not
terminated or suspended the Company's service in Mexico.
7. Covenants.
7.1 Affirmative Covenants. From and after the date hereof and
until the date of payment of the Advances under this Credit Agreement, the
Company and CCI shall comply with and perform each of the following covenants
and agreements:
7.1.1 Financial Reporting. The Company will furnish to the
Lender copies of the following financial statements, reports and information:
(a) a copy of CCI's consolidated annual report (including
audited balance sheets, statements of operations, statements of stockholders'
equity and statements of cash flow) for all entities for which CCI consolidates
results of operations for financial reporting purposes, including the Company
(the "Subsidiaries") for such fiscal year, prepared in accordance with GAAP
consistent with the preceding year, certified by Deloitte & Touche LLP or such
other independent public accountants as shall be approved by the Lender, which
approval shall not be unreasonably withheld. During such period as CCI is
subject to the periodic reporting requirements of either Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended, such report and financial
statements shall be delivered to the Lender at such time as CCI files with the
Securities and Exchange Commission its annual report on Form 10-K or 10-KSB.
During such period as CCI is not subject to the periodic reporting requirements
of either Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, such report and financial statements shall be delivered to the Lender
as soon as available; and
(b) such other information with respect to the financial
condition and operations of CCI and the Subsidiaries as the Lender may
reasonably request.
7.1.2 Payment of Taxes and Claims. CCI will duly pay and
discharge, or cause to be paid or discharged, as the same become due and
payable, all taxes, assessments and governmental and other charges, levies or
claims levied or imposed, which are, or which if unpaid might become, a lien or
charge upon the properties, assets, earnings or business of CCI or any of its
Subsidiaries; provided, however, that nothing contained in this Section 7.1.2
shall require CCI to pay and discharge, or cause to be paid and discharged, any
such tax, assessment, charge, levy or claim so long as CCI or one or more of the
Subsidiaries, as appropriate in good faith shall contest the validity thereof
and shall set aside on its or their books adequate reserves with respect
thereto. In the event CCI fails to satisfy its obligations under this Section
7.1.2, the Lender may, but is not obligated to, satisfy such obligations in
whole or in part and any payments made and expenses incurred in doing so shall
constitute additional indebtedness to the Lender and shall be paid or reimbursed
by the Company as additional advances hereunder.
7.1.3 Maintenance of Corporate Existence and Properties.
(a) The Company will, and will cause CCI and each Subsidiary
to, at all times do or cause to be done all things necessary to maintain,
preserve and renew its corporate charter and its rights, and comply in all
material respects with all related laws applicable to CCI, the Company and such
Subsidiary; provided, however, that nothing contained in this paragraph shall
(i) require CCI or such Subsidiary to maintain, preserve or renew any right not
material in the conduct of the business of CCI or such Subsidiary, (ii) prevent
the termination of the corporate existence of any Subsidiary (other than the
Company) if, in the reasonable opinion of the Board of Directors of CCI, such
termination is not disadvantageous to the Lender or (iii) require CCI or such
Subsidiary to comply with any law so long as the validity or applicability
thereof shall be contested in good faith by appropriate proceedings.
(b) The Company will as soon as practicable give written
notice to the Lender of any litigation, arbitration or governmental
investigation or proceeding which has been instituted or, to the knowledge of
the Company, is threatened against CCI or any of the Subsidiaries, or any of
their respective properties, which (i) involves or is likely to involve a claim
or claims for damages, penalties or awards in excess of $25,000 in the case of
claims for which the entity in question is not adequately insured or in excess
of $50,000 in the case of claims for which the entity in question is adequately
insured; or (ii) if determined adversely to CCI or such Subsidiary would have a
material adverse effect thereon.
(c) CCI will provide or cause to be provided for itself and
its Subsidiaries insurance against loss or damage of the kinds customarily
insured against by corporations similarly situated, with reputable insurers, in
such amounts, with such deductibles and by such methods as shall be adequate,
and in no event involving material differences from the insurance currently
generally maintained.
(d) CCI and the Subsidiaries will keep true books of records
and accounts in which full and correct entries in all material respects will be
made of all its business transactions and the business transactions of CCI and
its Subsidiaries, and will reflect in their financial statements adequate
accruals and appropriations to reserves, all in accordance with GAAP (subject to
customary and reasonable year-end adjustments).
(e) CCI will, and will cause each of its Subsidiaries to
comply with all applicable statutes, rules, regulations, orders and restrictions
relating to federal, state and local laws and of any governmental department,
commission, board, regulatory authority, bureau, agency and instrumentality with
respect thereto, and of any court, arbitrator or other body with jurisdiction
and authority, in respect of the conduct of the respective businesses thereof
and the ownership of their respective properties, except those, the violations
of which would not have a material adverse effect thereon and except such as are
being contested in good faith.
7.1.4 Notice of Event of Default. In addition to any other
reporting requirements set forth herein, the Company shall have an immediate
obligation to report to the Lender the occurrence of any Event of Default (as
defined herein) or any event which with the giving of notice or the passage of
time, or both, would constitute any such Event of Default.
7.1.5 Periodic Reporting and Ancillary Actions.
(a) CCI shall take such actions as shall be consistent with
an intent to sell or otherwise dispose of all or substantially all of its
business and operations (whether by asset sale, merger, stock sale or any
combination thereof) in one or more transactions (a "Sale"), and shall promptly
engage an investment banker or financial advisor reasonably acceptable to the
Lender for that purpose and, once engaged, shall actively assist that banker or
advisor in the process of effecting a Sale.
(b) The Company's representatives shall meet (in person, by
telephone or by other communications method acceptable to Lender) with the
Lender's representatives on a weekly basis to (i) review the prior week's
efforts with respect to the Sale, and (ii) advise the Lender of the Company's
cash position and its ability to pay its short-term obligations.
(c) The Company shall provide to Lender, prior to any advance
under this Credit Agreement, a use of proceeds summary, in form and detail
reasonably acceptable to Lender, for such advance.
(d) The Company shall notify the Lender of the adoption by
the board of directors of CCI or any Subsidiary, resolutions relating to a
voluntary filing or petition for bankruptcy protection in any jurisdiction.
7.2 Negative Covenants. From and after the date hereof and until
the Maturity Date (as the same may be extended pursuant to Article 2) or until
such later time as the Credit Agreement is paid in full, without the consent of
the Lender, CCI shall not, and will cause each of its Subsidiaries to not:
7.2.1 Restrictions on Acquisitions. Subject to Section 7.2.2,
acquire, by asset or stock purchase, merger or otherwise, the assets or stock of
any other corporation, partnership or any other entity.
7.2.2 Additional Indebtedness. Create, incur or assume any
indebtedness for borrowed money ("Borrowed Money") after the date hereof except
for Borrowed Money evidenced by this Credit Agreement or pursuant to the
Settlement Agreement.
7.2.3 Liens and encumbrances. Cause or permit any of its
assets or properties, whether owned or hereafter acquired, to be subject to any
liens or encumbrances except in the ordinary course of business of CCI or such
Subsidiary, as the case may be, or pursuant to the terms of the Senior
Indebtedness.
7.2.4 Guarantees. Become liable as a guarantor, or otherwise,
except for guarantees provided as obligations of a wholly-owned Subsidiary.
7.2.5 Restrictions on Dividends, Distributions and
Investments.
(a) Declare or pay any dividend or make any other
distributions on any shares of the Company's capital stock (except as required
by law); or
(b) Issue, deliver, sell, redeem, purchase or otherwise
acquire any shares of CCI's capital stock or any warrants, rights or other
options to purchase such capital stock other than pursuant to an Equity
Transaction; provided, however, that CCI shall be permitted to issue stock upon
any the exercise of options or warrants outstanding as of the date hereof.
7.2.6 Additional Prohibited Transactions.
(a) Amend its certificate of incorporation or bylaws;
(b) Make any material change in the nature of the business of
CCI as it is currently being conducted;
(c) File for receivership, dissolution, liquidation or
bankruptcy;
(d) Enter into, assume or become bound by any agreement to do
any of the foregoing or otherwise attempt to do any of the foregoing.
8. Default.
8.1 Events of Default. An "Event of Default" shall exist if any of
the following occurs and is continuing as to the Company:
(a) Default shall be made by the Company on a payment of the
advanced amounts or interest under this Credit Agreement, when and as such
principal amount and interest, as the case may be, shall become due and payable
by acceleration or otherwise; or
(b) Default shall be made in the performance or observance of
any covenant, condition, undertaking or agreement contained in this Credit
Agreement, the Pledge Agreement and Settlement Agreement which default shall not
have been cured after five (5) days notice of such default; or
(c) Any of the Company's or CCI's representations, as set
forth at Article 6, shall be false; or
(d) CCI or the Company shall (i) file a petition seeking
relief under the United States Bankruptcy Code, as now constituted or hereafter
amended from time to time, or file an answer consenting to, admitting the
material allegations of or otherwise not controverting, or fail timely to
controvert, a petition filed against CCI or the Company seeking relief under the
United States Bankruptcy Code, as now constituted or hereafter amended from time
to time or (ii) file a petition or answer with respect to relief under the
provisions of any other now-existing or future applicable bankruptcy, insolvency
or other similar law of the United States or any state thereof or of any other
country or province thereof or jurisdiction providing for the reorganization,
winding-up or liquidation of corporations or an arrangement, composition,
extension or adjustment with creditors; or
(e) (i) An order for relief shall be entered against CCI or
the Company under the United States Bankruptcy Code, as now constituted or
hereafter amended from time to time, which order is not stayed and remains
unstayed for a period of 30 days, or (ii) the entry of an order, judgment or
decree by operation of law or by a court having jurisdiction in the premises
which is not stayed and remains unstayed for a period of 30 days (A) adjudging
CCI or the Company bankrupt or insolvent under, or ordering relief against CCI
or the Company under, or approving a properly-filed petition seeking relief
against CCI or the Company under the provisions of any other now-existing or
future applicable bankruptcy, insolvency or other similar law of the United
States or any state thereof or of any other country or province thereof or
jurisdiction providing for the reorganization, winding-up or liquidation of
corporations or any arrangement, composition, extension or adjustment with
creditors, (B) appointing a receiver, supervisor, liquidator, assignee,
sequestrator, trustee or custodian of CCI or the Company or of any substantial
portion of the property of CCI or the Company, or (C) ordering the
reorganization, winding-up or liquidation of the affairs of CCI or the Company;
or
(f) CCI or the Company shall (i) make a general assignment
for the benefit of creditors, (ii) consent to the appointment of, or taking
possession of all or a substantial part of the property of CCI or the Company
by, a receiver, supervisor, liquidator, assignee, sequestrator, trustee or
custodian of CCI or the Company, (iii) admit its insolvency or inability to pay
its debts generally as such debts become due, (iv) fail generally to pay its
debts as such debts become due or (v) take any action (including such actions
taken by CCI's directors or a majority of CCI's shareholders) regarding the
dissolution or liquidation of the Company, or
(g) CCI shall fail to approve any proposed Sale approved in
writing by Lender.
8.2 Remedies. In case any one or more of the Events of Default
specified in Section 8.1 hereof shall have occurred and be continuing, the
Lender shall be entitled to exercise and enforce all of the rights of a creditor
under the laws of the Commonwealth of Virginia and to enforce this Credit
Agreement or its rights under the Pledge Agreement in accordance with their
respective terms and such law.
9. Miscellaneous.
9.1 Law. THIS CREDIT AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF VIRGINIA.
9.2 Binding Effect. All terms and agreements in this Credit
Agreement by the Lender (by virtue of its acceptance) and the Company shall bind
its successors and assigns.
9.3 Maximum Lawful Rate. It is the intent of the Company and the
Lender to conform to and contract in strict compliance with applicable usury law
from time to time in effect. In no way, nor in any event or contingency
(including but not limited to prepayment, default, demand for payment or
acceleration of the maturity of any obligation), shall the rate of interest
taken, reserved, contracted for, charged or received under this Credit Agreement
exceed the highest lawful interest rate permitted under applicable law. If the
Lender shall ever receive anything of value which is characterized as interest
under applicable law and which would apart from this provision be in excess of
the highest lawful interest rate permitted under applicable law, an amount equal
to the amount which would have been excessive interest shall, without penalty,
be applied to the reduction of the principal amount owing on this Credit
Agreement in the inverse order of its maturity and not to the payment of
interest, or refunded to Company or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid principal. All
interest paid or agreed to be paid to the Lender shall, to the extent permitted
by applicable law, be amortized, prorated, allocated and spread throughout the
full stated term (including any renewal or extension) of this Credit Agreement
so that the amount of interest on account of such obligation does not exceed the
maximum permitted by applicable law. As used in this Section, the term
"applicable law" shall mean the laws of the Commonwealth of Virginia or the
federal laws of the United States, whichever laws allow the greater interest, as
such laws now exist or may be changed or amended or come into effect in the
future.
9.4 Severability. In case any provision of this Credit Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
9.5 Business Days. As used herein, the term "Business Day" shall
mean each weekday which is not a day on which banking institutions in the
Commonwealth of Virginia or the State of Utah are authorized or obligated by law
or executive order to close.
9.6 Waivers. Any term, covenant, agreement or condition of this
Credit Agreement may, with the written consent of the Company and the Lender, be
amended or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively) altered, modified
or amended.
9.7 Notices. All notices required or permitted hereunder shall be
made to the address for the party in question set forth on the signature lines
below. All notices deposited in United States mail, postage prepaid, shall be
deemed delivered on the third (3rd) business day following deposit; all notices
hand delivered or delivered by facsimile shall be deemed delivered when
confirmation of such delivery is received by the sending party.
9.8 Conditions to the Initial Advance. The Company understands and
agrees that Lender's obligation to make the Initial Advance is subject to the
following conditions:
(a) the Pledge Agreement shall have been executed by each of
the CCI Stockholders and the Lender or its designee shall have received the
certificates representing the shares pledged pursuant to that Agreement or shall
have received reasonable assurances that said certificates shall be delivered to
Lender or its designee promptly.
(b) the delivery by CCI, and acceptance by Telematica EDC,
C.A., of a $7 million promissory note due in March 2015 in the form attached as
Exhibit B, and the termination of the guaranty documents executed in connection
with the delivery of the replaced promissory notes,
(c) the Lender shall have received confirmation satisfactory
to it that Telefonos de Mexico has not terminated or suspended service to the
Company's Mexican Subsidiary,
(d) the settlement agreement between FondElec Group, Inc. and
CCI in the form attached as Exhibit C shall have been executed, delivered and
accepted (the "Settlement Agreement"), and
(e) with respect to the Company and CCI: (i) a good standing
certificate from the Secretary of State of Nevada, as of a recent date, (ii) a
true and correct copy of the Certificate of Incorporation, as amended, and the
Bylaws of the Company and CCI; and (iii) a true and correct copy of resolutions
adopted by their respective Boards of Directors authorizing the transaction,
certified by each of their corporate secretaries.
9.9 Conditions to the Second Advance and Each Subsequent Advance.
The Company understands and agrees that Lender's obligation to make the Second
Advance and each Subsequent Advance is subject to the following conditions:
(a) there shall not have occurred and be continuing an Event
of Default,
(b) the representations and warranties of the Company and CCI
contained in Article 6 shall remain true and correct,
(c) the Company and CCI shall be in compliance with the
covenants contained in Article 7,
(d) the Committed Amount shall not be fully borrowed, and
(e) the Scheduled Maturity Date shall not have occurred.
9.10 Attorneys Fees. The Company shall pay, from advances made
hereunder, the legal expenses of the Company and the Lender relating to the
negotiation and drafting of this Credit Agreement and the documents, instruments
and agreements ancillary hereto, as well as the Lender's transaction costs
(including wire transfer fees and recording costs) relating to the consummation
of the transactions contemplated hereby.
IN WITNESS WHEREOF, the Company, CCI and the Lender have caused this
Credit Agreement to be executed by their respective officers thereunto duly
authorized this ____ day of April, 2002.
LATIN AMERICAN BROADBAND, INC.
By:
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Its:
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Address:
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INTERNEXUS S.C.A.
By:
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Its:
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Address:
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CONVERGENCE COMMUNICATIONS, INC.
By:
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Its:
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Address:
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