SECOND MASTER AMENDMENT TO LOAN DOCUMENTS
THIS AMENDMENT (the "Amendment") with respect to the Credit Agreement
and the Security Agreement referred to below is made and entered into as of the
24th day of August, 2001 by and among CHOICE ONE COMMUNICATIONS INC., a Delaware
corporation (the "Company"), as Guarantor, its Subsidiaries (collectively, the
"Borrowers") party to such Credit Agreement, FIRST UNION INVESTORS, INC., as
Administrative Agent, GENERAL ELECTRIC CAPITAL CORPORATION, as Syndication
Agent, XXXXXX XXXXXXX SENIOR FUNDING, INC., as Documentation Agent and the
Lenders set forth on the signature pages hereto.
STATEMENT OF PURPOSE
The Borrowers, the Company, the Lenders and the Agents are parties to
that certain Second Amended and Restated Credit Agreement, dated as of August 1,
2000 (as previously amended, as amended hereby and as further amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
pursuant to which the Lenders have extended certain credit facilities to the
Borrowers.
The Obligations and the Guaranteed Obligations (each as defined in the
Credit Agreement) are secured by a security interest in, and lien on, certain
personal property of the Company and the Borrowers pursuant to that certain
Second Amended and Restated Security Agreement, dated as of August 1, 2000 (as
previously amended, as amended hereby and as further amended, restated,
supplemented or otherwise modified from time to time, the "Security Agreement"),
executed by the Company and the Borrowers, as Grantors, in favor of the
Administrative Agent.
The Company and the Borrowers have requested certain modifications to
the financial covenants contained in Article X of the Credit Agreement, and the
Agents and the Lenders have agreed to such request pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. CAPITAL TERMS.
--------------
All capitalized terms used and not defined herein shall have
the meanings given thereto in the Credit Agreement.
2. AMENDMENTS TO CREDIT AGREEMENT.
------------------------------
(a) Section 1.1 of the Credit Agreement is hereby amended as follows:
(i) by inserting immediately after the definition of "Assignment and
Acceptance" the following definition:
"AVAILABLE CASH" means, with respect to any specified Person
and its Subsidiaries, for any period, the sum of the following
determined on a Consolidated basis, without duplication: (a)
the unused portion of the Aggregate Commitment then in effect,
(b) the sum of all amounts that would be included, in
accordance with GAAP, as cash, restricted cash or Cash
Equivalents on a Consolidated balance sheet of the Borrowers
and their Subsidiaries and (c) the unused portion of any
irrevocably committed debt or equity financing other than the
Aggregate Commitment.
1
(ii) by inserting immediately after the definition of "Default" the
following definition:
"DEPOSIT ACCOUNT" means a deposit account (as now or hereafter
defined in the UCC) of the Company or any of its Subsidiaries,
including, without limitation, those listed on SCHEDULE
7.1(AA) and any lockbox, demand, time, savings, passbook or
like account maintained with a depositary institution.
(iii) by inserting immediately after the definition of "EBITDA" the
following definition:
"EBITDA LOSS CARRYFORWARD" means (a) for the fiscal quarter
ending on March 31, 2002, the Initial EBITDA Loss Carryforward
and (b) for each fiscal quarter ending after March 31, 2002,
an amount equal to the lesser of (i) the Initial EBITDA Loss
Carryforward and (ii) an amount equal to the Initial EBITDA
Loss Carryforward, PLUS the actual cumulative EBITDA loss from
January 1, 2002 to the determination date set forth below for
such fiscal quarter (expressed as a negative amount), MINUS
the negative amount corresponding to such fiscal quarter set
forth below; PROVIDED, that the EBITDA Loss Carryforward for
any period shall not be less than zero.
--------------------------------------------------------------
Cumulative EBITDA Loss
Quarter Ending EBITDA Carryforward From 01/01/2002
Determination Date (in thousands)
--------------------------------------------------------------
6/30/02 3/31/02 (8,400)
----------------
9/30/02 6/30/02 (11,500)
--------------------------------------------------------------
(iv) by inserting immediately after the definition of "Initial Credit
Agreement" the following definition:
"INITIAL EBITDA LOSS CARRYFORWARD" means an amount equal to
the lesser of (a) $2,500,000 and (b) the sum of (i) the actual
cumulative EBITDA loss from July 1, 2000 through December 31,
2001 (expressed as a negative amount in dollars), PLUS (ii)
$127,100,000 (such amount being equal to the maximum permitted
cumulative EBITDA loss from July 1, 2000 through December 31,
2001); PROVIDED, that the Initial EBITDA Loss Carryforward
shall not be less than zero.
(b) Section 7.1 of the Credit Agreement is hereby amended by inserting
a new paragraph (aa) as follows:
(aa) DEPOSIT ACCOUNTS; SECURITIES ACCOUNTS. SCHEDULE 7.1(AA)
sets forth all of the Deposit Accounts and all "securities
accounts" (as defined in the UCC) of the Company and its
Subsidiaries as of the effective date of that certain Second
Master Amendment to Loan Documents, dated as of August 24,
2001, by and among the Company, the Borrowers and the Lenders
(the "Second Master Amendment").
(c) Section 8.5 of the Credit Agreement is hereby amended by
(i) deleting the word "and" from paragraph (h) thereof; (ii) inserting "; and"
in lieu of the period at the end of paragraph (i) thereof; and (iii) inserting a
new paragraph (j) as follows:
2
(j) the opening of any Deposit Account by the Company or any
of its Subsidiaries or any "securities account" (as defined in
the UCC).
(d) Section 9.12 of the Credit Agreement is hereby amended by
renumbering the existing paragraph (d) as paragraph (e) and inserting a new
paragraph (d) as follows:
(d) Simultaneously with the opening of any Deposit Account or
any "securities account" (as defined in the UCC) by the
Company or any of its Subsidiaries, cause to be executed and
delivered to the Administrative Agent in form and substance
reasonably satisfactory thereto a control agreement or similar
agreement permitting the Administrative Agent to obtain
"control" (as such term is now or hereafter defined in the
UCC) over such Deposit Account or such "securities account"
(as defined in the UCC); PROVIDED, that the requirements of
this Section 9.12(d) shall not apply to any escrow or
restricted account permitted by Section 11.3(h); PROVIDED
FURTHER, that, with respect to the Deposit Accounts and
"securities accounts" (as defined in the UCC) set forth on
SCHEDULE 7.1(AA), the Company and the Borrowers shall have
until the date that is sixty days after the effective date of
the Second Master Amendment (or, so long as the Company and
its Subsidiaries are using their reasonable best efforts to
comply with the requirements of this Section 9.12(d), until
such later date as may be reasonably determined by the
Administrative Agent) to comply with the requirements of this
Section 9.12(d).
(e) Section 12.1 of the Credit Agreement is hereby amended
by inserting a new paragraph (s) as follows:
(s) DEPOSIT ACCOUNTS; SECURITIES ACCOUNTS. The Company and its
Subsidiaries shall fail to deliver the documents required by
Section 9.12(d) in accordance with the time limits set forth
therein with respect to each Deposit Account and each
"securities account" (as defined in the UCC) set forth on
SCHEDULE 7.1(AA).
(f) Article X of the Credit Agreement is hereby amended by
deleting the existing Article X in its entirety and inserting in lieu thereof
the provisions set forth on EXHIBIT A hereto.
3. AMENDMENTS TO SECURITY AGREEMENT.
--------------------------------
(a) Section 1 of the Security Agreement is hereby amended as
follows:
(i) by deleting the phrase "as in effect in the State of New
York" in both places it appears in the definition of "UCC" and
inserting the phrase "as now or hereafter in effect in the State of New
York, as amended or modified from time to time" in lieu thereof.
(ii) by inserting immediately after the definition of
"Copyrights" the following definition:
"DEPOSIT ACCOUNT" means a deposit account (as now or hereafter
defined in the UCC) of any Grantor, including, without
limitation, those listed on SCHEDULE 7.1(AA) to the Credit
Agreement and any lockbox, demand, time, savings, passbook or
like account maintained with a depositary institution.
3
(b) Section 2(a) of the Security Agreement is hereby amended
as follows:
(i) by redesignating the existing paragraphs (ix) through
(xiv) as paragraphs (x) through (xv) and inserting a new paragraph (ix) as
follows:
(ix) Deposit Accounts.
(ii) by inserting immediately before the period at the end
of paragraph (xv) (as redesignated pursuant hereto) the
following:
and all supporting obligations of Grantor with respect thereto.
(c) Section 4(a) of the Security Agreement is hereby amended
by inserting immediately before the phrase "chief executive office" in paragraph
(i) thereof the phrase "state of organization."
(d) Section 6 of the Security Agreement is hereby amended as
follows:
(i) by deleting the section heading and inserting the
following in lieu thereof:
SECTION 6. COLLATERAL ACCOUNT; DEPOSIT ACCOUNTS; SECURITIES ACCOUNTS.
---------------------------------------------------------
(ii) by deleting the section references to "Section 6(b)" and
"Section 6(c)" in paragraph (a) thereof and inserting section
references to "Section 6(c)" and "Section 6(d)" in lieu thereof.
(iii) by redesignating the existing paragraphs (b) and (c)
as paragraphs (c) ad (d) and inserting a new paragraph (b) as
follows:
(b) Each Grantor shall maintain on and after the date of the
Second Master Amendment all of its Deposit Accounts and
"securities accounts" (as defined in the UCC) with a financial
institution listed on SCHEDULE 7.1(AA) to the Credit Agreement
or such other financial institution having combined capital,
surplus and undivided profits of not less than $500,000,000 or
otherwise reasonably acceptable to the Administrative Agent.
Such financial institution (other than the Administrative
Agent) shall have executed a control agreement or similar
agreement permitting the Administrative Agent to obtain
"control" (as such term is now or hereafter defined in the
UCC) over such Deposit Account or "securities account" (as
defined in the UCC) as required by the Credit Agreement. Upon
the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right to
transfer or direct the transfer of the balance of each Deposit
Account or "securities account" (as defined in the UCC) to the
Collateral Account.
(iv) by inserting at the end of paragraph (d) (as
redesignated pursuant hereto) the following sentence:
The Administrative Agent shall have the right (but not the
obligation) to apply any funds held in any Deposit Account or
"securities account" (as defined in the UCC) to the repayment
of any Obligations then due and payable in the manner
specified in SECTION 10 hereof.
4
4. EFFECTIVENESS. This Amendment shall be effective on the date that
each of the following conditions has been satisfied: (a) AMENDMENT.
The Administrative Agent shall have received a fully executed copy of
this Amendment, executed by the Company, the Borrowers and the Required Lenders.
(b) AMENDMENT FEES. The Borrowers shall have paid to each
Lender executing this Amendment an amendment fee in an amount equal to
0.25% of such Lender's Commitment as of the date of this Amendment.
(c) OTHER DOCUMENTS. The Administrative Agent shall have
received SCHEDULE 7.1(AA) to the Credit Agreement and any other documents or
instruments reasonably requested by the Administrative Agent in connection with
the execution of this Amendment.
5. REPRESENTATIONS AND WARRANTIES; COVENANTS. By their execution
hereof, the Company and the Borrowers hereby certify that each of the
representations and warranties set forth in the Credit Agreement and the other
Loan Documents as amended hereby is true and correct in all material respects as
of the date hereof as if fully set forth herein and that as of the date hereof
no Default or Event of Default has occurred and is continuing.
6. EFFECT OF THE AMENDMENT. Except for the amendments contemplated
hereby, the Credit Agreement and the Loan Documents shall be and remain in full
force and effect. The amendments granted herein are specific and limited and
shall not constitute a modification, acceptance or waiver of any other provision
or default of the Credit Agreement, the Loan Documents or any other document or
instrument entered into in connection therewith or a further modification,
acceptance or waiver of the provisions set forth therein.
7. EXPENSES. The Borrowers shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the negotiation,
execution and delivery of this Amendment, including, without limitation, the
reasonable fees and disbursements of counsel for the Administrative Agent.
8. GOVERNING LAW. This Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York.
9. COUNTERPARTS. This Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.
10. FAX TRANSMISSION. A facsimile, telecopy or other reproduction of
this Amendment may be executed by one or more parties hereto, and an executed
copy of this Amendment may be delivered by one or more parties hereto by
facsimile or similar instantaneously electronic transmission devise pursuant to
which the signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Amendment as well as any facsimile, telecopy or
other reproduction hereof.
* * * * *
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date and year first above written.
CHOICE ONE COMMUNICATIONS INC.,
as Guarantor and on behalf of the Borrowers
[CORPORATE SEAL]
By: /s/ Xxxx X. Xxxxxx
---------------------------------------------------
Name: Xxxx X. Xxxxxx
---------------------------------------------
Title: VP Finance
--------------------------------------------
[Signature Pages Continued]
6
FIRST UNION INVESTORS, INC.,
as Administrative Agent and Lender
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
---------------------------------------------
Title: Senior Vice President
--------------------------------------------
[Signature Pages Continued]
7
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Syndication Agent and Lender
By: /s/ X.X. Xxxxxxxx
--------------------------------------------
Name: X.X. Xxxxxxxx
--------------------------------------------
Title: Manager-Operations
--------------------------------------------
[Signature Pages Continued]
8
XXXXXX XXXXXXX SENIOR FUNDING,
INC.,
as Documentation Agent and Lender
By: /s/ Xxx XxXxxxxxxx
-----------------------------------------------
Name: Xxx XxXxxxxxxx
-----------------------------------------
Title: Managing Director
----------------------------------------
[Signature Pages Continued]
9
CIBC INC., as Lender
By: /s/ Xxxxx Xxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxx
-------------------------------------------
Title: Executive Director
-------------------------------------------
[Signature Pages Continued]
10
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By: /s/ Xxxxx X. Xxxxx
---------------------------------------------------
Name: Xxxxx X. Xxxxx
---------------------------------------------
Title: Vice President
--------------------------------------------
[Signature Pages Continued]
00
XXX XXXX XX XXX XXXX,
as Lender
By: /s/ Xxxxxxx Xxxxx
-----------------------------------------------
Name: Xxxxxxx Xxxxx
-----------------------------------------
Title: Senior Vice-President
----------------------------------------
[Signature Pages Continued]
12
DRESDNER BANK AG, NEW YORK AND GRAND CAYMEN BRANCHES,
as Lender
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
---------------------------------------------
Title: Associate
--------------------------------------------
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Title: Associate
--------------------------------------------
[Signature Pages Continued]
13
FORTIS CAPITAL CORP.,
as Lender
By: /s/ C.M. Forgiane
---------------------------------------------------
Name: C.M. Forgiane
---------------------------------------------
Title: Vice President
--------------------------------------------
By: /s/ X. Xxxxxx
---------------------------------------------------
Name: X. Xxxxxx
---------------------------------------------
Title: President
--------------------------------------------
[Signature Pages Continued]
14
IBM CREDIT CORPORATION,
as Lender
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------------------------
Title: Manager of Credit, Commercial and Specialty
Financing
--------------------------------------------
[Signature Pages Continued]
15
CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
By: /s/ Xxxxxx X. Xxxx
---------------------------------------------------
Name: Xxxxxx X. Xxxx
---------------------------------------------
Title: Vice President
--------------------------------------------
16
EXHIBIT A
ARTICLE X
FINANCIAL COVENANTS
SECTION 10.1 STAGE 1 COVENANTS. Until all of the Obligations have been
paid and satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 15.11 hereof, during the Stage
1 Covenant Period, the Borrowers on a Consolidated basis will not:
(a) TOTAL DEBT TO CONTRIBUTED CAPITAL RATIO: As of any date of
determination, permit the ratio of Total Debt to Contributed Capital to
exceed fifty percent (50%).
(b) TOTAL CONSOLIDATED DEBT TO CONTRIBUTED CONSOLIDATED CAPITAL RATIO.
As of any date of determination, permit the ratio of Total Consolidated Debt
to Contributed Consolidated Capital to exceed sixty-five percent (65%).
(c) MINIMUM REVENUE: As of any fiscal quarter end during the applicable
period set forth below, permit Total Revenue for the fiscal quarter ending on
such date to be less than the corresponding amount set forth below:
----------------------- -----------------------------------------
Period Ending Minimum Revenue (in thousands)
----------------------- -----------------------------------------
9/30/00 $16,500
12/31/00 29,000
3/31/01 31,500
6/30/01 38,200
9/30/01 48,600
12/31/01 55,200
3/31/02 64,500
6/30/02 73,900
-----------------------
9/30/02 82,700
-----------------------
12/31/02 92,800
-----------------------
3/31/03 99,800
-----------------------
6/30/03 110,300
-----------------------
9/30/03 119,900
-----------------------
12/31/03 129,300
----------------------- -----------------------------------------
17
(d) MAXIMUM EBITDA LOSSES/MINIMUM EBITDA: As of any fiscal quarter end
during the applicable period set forth below, permit (i) EBITDA losses thereof
for the fiscal quarter ending on such date to exceed the corresponding negative
amount set forth below; PROVIDED, that for each fiscal quarter ending on or
prior to December 31, 2001, either (A) the EBITDA loss for such fiscal quarter
shall not exceed the corresponding negative amount set forth below or (B) the
cumulative EBITDA loss from July 1, 2000 to such fiscal quarter end shall not
exceed the cumulative negative amounts set forth below for such period; PROVIDED
FURTHER, that for each fiscal quarter ending after December 31, 2001 and on or
prior to June 30, 2002 the EBITDA loss for such fiscal quarter shall not exceed
the corresponding negative amount set forth below, MINUS the EBITDA Loss
Carryforward; or (ii) permit EBITDA thereof to be less than the corresponding
positive amount set forth below, PROVIDED, that for the fiscal quarter ending on
September 30, 2002 the EBITDA for such quarter shall not be less than the
corresponding positive amount set forth below, MINUS the EBITDA Loss
Carryforward:
---------------------- ---------------------------------------------
Max EBITDA Losses/
Period Min EBITDA (in thousands)
---------------------- ---------------------------------------------
9/30/00 (22,000)
12/31/00 (25,000)
3/31/01 (28,400)
6/30/01 (22,400)
9/30/01 (16,400)
12/31/01 (12,900)
3/31/02 (8,400)
6/30/02 (3,100)
9/30/02 1,300
12/31/02 8,100
3/31/03 15,400
6/30/03 19,100
9/30/03 23,700
12/31/03 27,600
---------------------- ---------------------------------------------
(e) MAXIMUM CAPITAL EXPENDITURES: As of the end of any Fiscal
Year, permit Capital Expenditures for such Fiscal Year to exceed the
corresponding amount set forth below:
-------------------------- -------------------------------------------
Fiscal Year Maximum Capital
Ending Expenditures (in thousands)
-------------------------- -------------------------------------------
12/31/00 138,500
12/31/01 99,500
12/31/02 70,000
12/31/03 65,000
-------------------------- -------------------------------------------
; PROVIDED that if the Borrowers make Capital Expenditures in any Fiscal Year in
an amount less than the amount set forth above for any such Fiscal Year (such
unused amount for any single Fiscal Year, or the cumulative unused amount for
any number of Fiscal Years, as applicable, referred to below as the "Stage 1
Carryover Amount"), then (i) the Borrowers may make Capital Expenditures in any
succeeding fiscal year in an amount not to exceed the sum of (A) the amount set
forth above for such fiscal year and (B) the Stage 1 Carryover Amount and (ii)
for purposes of determining whether any Capital Expenditure exceeds the maximum
amount permitted for any given Fiscal Year, the Capital Expenditure for such
Fiscal Year shall be applied first to the Stage 1 Carryover Amount then
outstanding.
18
(f) MINIMUM ASSET COVERAGE: As of any fiscal quarter end,
permit the ratio of (i) the Total Debt of the Borrowers and their Subsidiaries
as of such date to (ii) PP&E thereof as of such date to exceed 1.00 to 1.00.
(g) MINIMUM AVAILABLE CASH: As of any fiscal quarter end, permit Available
Cash of the Borrowers and their Subsidiaries as of such date to be less than
$10,000,000.
SECTION 10.2 STAGE 2 COVENANTS. Until all of the Obligations have been
paid and satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 15.11 hereof, during the Stage
2 Covenant Period (during which time the covenants set forth in Section 10.1
shall cease to be applicable) the Borrowers on a Consolidated basis will not:
(a) BORROWER LEVERAGE RATIO: As of any fiscal quarter end during
the applicable period set forth below, permit the Borrower Leverage Ratio to
exceed the corresponding ratio set forth below:
--------------------------- ---------------------------------
Period Ratio
--------------------------- ---------------------------------
Stage 2 Effective
Date through 6.00 to 1.00
06/30/2003
07/01/2003 through
09/30/2003 5.00 to 1.00
10/01/2003 through
12/31/2003 4.00 to 1.00
01/01/2004 and 3.00 to 1.00
thereafter
--------------------------- ---------------------------------
(b) BORROWER FIXED CHARGE COVERAGE RATIO: As of any fiscal quarter end
during the applicable period set forth below, permit the ratio of (i) EBITDA
thereof for the six-month period ending on such fiscal quarter end TIMES two (2)
to (ii) Borrower Fixed Charges for the period of four (4) consecutive fiscal
quarters ending on such fiscal quarter end to be less than the corresponding
ratio set forth below:
--------------------------- ---------------------------------
Period Ratio
--------------------------- ---------------------------------
Stage 2 Effective
Date through 0.50 to 1.00
06/30/2003
07/01/2003 through
09/30/2003 0.85 to 1.00
10/01/2003 through
12/31/2003
1.00 to 1.00
1/01/2004 and 1.10 to 1.00
thereafter
--------------------------- ---------------------------------
19
(c) INTEREST COVERAGE RATIO: As of any fiscal quarter end during the
applicable period set forth below, permit the ratio of (i) EBITDA thereof for
the six-month period ending on such fiscal quarter end to (ii) cash Interest
Expense thereof for the six-month period ending on such fiscal quarter end, to
be less than the corresponding ratio set forth below:
--------------------------- -----------------------------------
Period Ratio
--------------------------- -----------------------------------
Stage 2 Effective
Date through 1.75 to 1.00
06/30/2003
07/01/2003
through 2.00 to 1.00
09/30/2003
10/01/2003
through 2.50 to 1.00
12/31/2003
01/01/2004
and 3.00 to 1.00
thereafter
--------------------------- -----------------------------------
(d) MAXIMUM CAPITAL EXPENDITURES: As of the end of any Fiscal Year, permit
Capital Expenditures for such Fiscal Year to exceed the corresponding amount set
forth below:
-------------------------- --------------------------------------------
Fiscal Year Maximum Capital
Ending Expenditures (in thousands)
-------------------------- --------------------------------------------
12/31/02 70,000
12/31/03 65,000
12/31/04 64,000
12/31/05 63,000
12/31/06 72,000
12/31/07 80,000
12/31/08 61,000
-------------------------- --------------------------------------------
; PROVIDED, that if the Borrowers make Capital Expenditures in any Fiscal Year
(other than any Fiscal Year all or a part of which was included in the Stage 1
Covenant Period) in an amount less than the amount set forth above for any such
Fiscal Year (such unused amount for any single Fiscal Year, or the cumulative
unused amount for any number of Fiscal Years, as applicable, referred to below
as the "Stage 2 Carryover Amount"), then (i) the Borrowers may make Capital
Expenditures in any succeeding fiscal year in an amount not to exceed the sum of
(A) the amount set forth above for such fiscal year and (B) the Stage 2
Carryover Amount and (ii) for purposes of determining whether any Capital
Expenditure exceeds the maximum amount permitted for any given Fiscal Year, the
Capital Expenditure for such Fiscal Year shall be applied first to the Stage 2
Carryover Amount then outstanding.
20
SECTION 10.3 GUARANTOR COVENANT. Until all of the Obligations have been
paid and satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 15.11 hereof, during the Stage
2 Covenant Period the Company on a Consolidated basis will not, as of any fiscal
quarter end during the applicable period set forth below, permit the Company
Leverage Ratio to be greater than the corresponding ratio set forth below:
--------------------------- -------------------------------------------
Period Ratio
--------------------------- -------------------------------------------
Stage 2 Effective
Date through
06/30/2003 10.00 to 1.00
07/01/2003 through
09/30/2003 8.00 to 1.00
10/01/2003 through
12/31/2003 6.50 to 1.00
01/01/2004
through
03/31/2004 5.50 to 1.00
04/01/2004
through
06/30/2004 5.00 to 1.00
07/01/2004 and 4.00 to 1.00
thereafter
--------------------------- -------------------------------------------
21
