EXHIBIT 10.37
[EXECUTION COPY]
FOURTH AMENDMENT TO CREDIT AGREEMENT
This FOURTH AMENDMENT TO CREDIT AGREEMENT, dated as of February 27,
2002 (this "Amendment"), to the Existing Credit Agreement (as defined
below) is made by CTC COMMUNICATIONS CORP., a Massachusetts corporation
(the "Borrower"), CTC COMMUNICATIONS GROUP, INC., a Delaware corporation
(the "Parent"), and certain of the Lenders (such capitalized term and other
capitalized terms used in this preamble and the recitals below to have the
meanings set forth in, or are defined by reference in, Article I below).
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the Lenders, Toronto Dominion
(Texas), Inc., as the Administrative Agent, Xxxxxx Brothers, as the
Syndication Agent, Credit Suisse First Boston, as the Documentation Agent,
and TD Securities (USA) Inc., as the Arranger, are all parties to the
Amended and Restated Credit Agreement, dated as of August 15, 2000, as
amended by the First Amendment to Credit Agreement, dated as of September
30, 2000, the Second Amendment to Credit Agreement, dated as of November
14, 2000, and the Third Amendment to Credit Agreement, dated as of November
1, 2001 (the "Existing Credit Agreement", and as amended by this Amendment
and as the same may be further amended, supplemented, amended and restated
or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, the Borrower desires to modify certain provisions of the
Existing Credit Agreement and the Lenders are willing to so modify the
Existing Credit Agreement on the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby covenant and agree as
follows:
ARTICLE I
DEFINITIONS
SECTION I.1. Certain Definitions. The following terms when used in
this Amendment shall have the following meanings (such meanings to be
equally applicable to the singular and plural forms thereof):
"Amendment" is defined in the preamble.
"Borrower" is defined in the preamble.
"Cisco Lease Documents" means the Amended and Restated Master
Agreement to Lease Equipment, dated as of February 27, 2002, between Cisco
Systems Capital Corporation, as lessor, and the Borrower, as lessee,
together with all annexes, schedules, appendices and exhibits thereto, and
all documents executed in connection therewith, including all documents
relating to the Cisco Warrants.
"Cisco Warrants" is defined in Section 5.1.
"Credit Agreement" is defined in the first recital.
"Existing Credit Agreement" is defined in the first recital.
"Parent" is defined in the preamble.
"Fourth Amendment Effective Date" is defined in Article III.
SECTION I.2. Other Definitions. Terms for which meanings are
provided in the Credit Agreement are, unless otherwise defined herein or the
context otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Fourth Amendment
Effective Date, the provisions of the Existing Credit Agreement referred to
below are hereby amended in accordance with this Article II. Except as
expressly so amended, the Existing Credit Agreement shall continue in full
force and effect in accordance with its terms.
SECTION II.1. Modification of Article I. Article I of the Existing
Credit Agreement is hereby amended as follows:
SECTION II.1.1. Section 1.1 of the Existing Credit Agreement is
hereby amended by inserting the following definition in such Section in the
appropriate alphabetical sequence:
"Amendment No. 4" means the Fourth Amendment to Credit
Agreement, dated as of February 27, 2002, to this Agreement.
SECTION II.1.2. Section 1.1 of the Existing Credit Agreement is
hereby amended by amending the definition of "Applicable Margin" appearing
therein by:
(a) deleting the grid appearing in clause (b) thereof and
inserting the following grid in replacement therefor:
Total Leverage Ratio Applicable Margin For Applicable Margin For
Base Rate Loans LIBO Rate Loans
Greater than or equal to 8.00:1 3.50% 4.50%
Greater than or equal to 6.00:1
but less than 8.00:1 3.00% 4.00%
Greater than or equal to 5.00:1
but less than 6.00:1 2.75% 3.75%
Greater than or equal to 4.00:1
but less than 5.00:1 2.50% 3.50%
Less than 4.00:1 2.25% 3.25%
(b) deleting the amounts "3.25%" and "4.25%" appearing in
clause (c) thereof and inserting "3.75%" and "4.75%", respectively, in
replacement therefor.
SECTION II.2. Modification of Article VII. Article VII of the
Existing Credit Agreement is hereby amended as follows:
SECTION II.2.1. Section 7.1.1 of the Existing Credit Agreement is
hereby amended by
(a) inserting the parenthetical "(or, if earlier, the date
required under any lease agreement between the Borrower, as lessee,
and Cisco Systems Capital Corporation, as lessor)" immediately
following the words "Fiscal Year" appearing in the second line of each
of clauses (b) and (c) thereof; and
(b) renumbering clause (n) thereof as clause (o) and inserting
a new clause (n) in its place as follows:
(n) until such time as the Total Leverage Ratio is less
than 5.00:1 as set forth in the most recent Compliance
Certificate delivered pursuant to clause (d) above, no later
than the first and fifteenth day of each month, a bi-weekly
report setting forth the delivery of new line additions, total
number of power paths, new power path additions/conversions and
revenues on and off-net, in each case with comparisons to the
budget; and
SECTION II.2.2. Section 7.2.2 of the Existing Credit Agreement is
hereby amended by:
(a) deleting the proviso to clause (e) thereof in its entirety
and inserting the proviso "provided, that the aggregate amount of
Indebtedness at any time outstanding pursuant to this clause shall not
exceed $130,000,000" in replacement therefor; and
(b) deleting clause (l) thereof in its entirety.
SECTION II.2.3. Clause (a) of Section 7.2.4 of the Existing Credit
Agreement is hereby amended by deleting the date "March 31, 2002" appearing
in the second line thereof and inserting the date "September 30, 2002" in
replacement therefor.
SECTION II.2.4. Clause (a)(i) of Section 7.2.4 of the Existing Credit
Agreement is hereby amended by deleting the reference to "60%" appearing
therein and inserting "55%" in replacement therefor.
SECTION II.2.5. Clause (a)(ii) of Section 7.2.4 of the Existing
Credit Agreement is hereby amended and restated to read in its entirety as
follows:
(ii) Minimum ALEs Installed and Billed. Neither the Borrower
nor the Parent will permit the aggregate number of ALEs installed and
billed as of the last day of any Fiscal Quarter set forth below to be
less than the amount set forth opposite such Fiscal Quarter:
Fiscal Quarter ALEs
March 31, 2000 260,000
June 30, 2000 300,000
September 30, 2000 350,000
December 31, 2000 390,000
March 31, 2001 430,000
June 30, 2001 470,000
September 30, 2001 530,000
December 31, 2001 530,000
March 31, 2002 530,000
June 30, 2002 535,000
September 30, 2002 555,000
SECTION II.2.6. Clause (a)(iii) of Section 7.2.4 of the Existing
Credit Agreement is hereby amended and restated to read in its entirety as
follows:
(iii) Minimum Revenue. Neither the Borrower nor the Parent
will permit the revenue received by the Consolidated Group as of the
last day of any Fiscal Quarter set forth below to be less than the
amount set forth opposite such Fiscal Quarter:
Fiscal Quarter Revenue
March 31, 2000 $40,000,000
June 30, 2000 $47,500 ,000
September 30, 2000 $49,500,000
December 31, 2000 $53,100,000
March 31, 2001 $59,800,000
June 30, 2001 $67,700,000
September30, 2001 $76,900,000
December 31, 2001 $73,100,000
March 31, 2002 $74,000,000
June 30, 2002 $78,000,000
September 30, 2002 $84,000,000
SECTION II.2.7. Clause (a)(iv) of Section 7.2.4 of the Existing
Credit Agreement is hereby amended and restated to read in its entirety as
follows:
(iv) Minimum Consolidated EBITDA. Neither the Borrower nor the
Parent will permit the Consolidated EBITDA as of the last day of any
Fiscal Quarter set forth below to be less than the amount set forth
opposite such Fiscal Quarter:
Period Consolidated EBITDA
March 31, 2000 ($5,400,000)
June 30, 2000 ($5,700,000)
September 30, 2000 $9,500,000)
December 31, 2000 ($11,800,000)
March 31, 2001 ($10,300,000)
June 30, 2001 ($6,400,000)
September 30, 2001 ($4,400,000)
December 31, 2001 ($6,500,000)
March 31, 2002 ($3,500,000)
June 30, 2002 $1,500,000
September 30, 2002 $8,000,000
SECTION II.2.8. Clause (b)(i) of Section 7.2.4 of the Existing Credit
Agreement is hereby amended and restated to read in its entirety as follows:
(i) Maximum Total Leverage Ratio. Neither the Parent nor the
Borrower will permit the Total Leverage Ratio as of the last day of
any Fiscal Quarter occurring during any period set forth below to be
greater than the ratio set forth opposite such period:
Period Total Leverage Ratio
07/01/01 through (and including) 06/30/02 n/a
07/01/02 through (and including) 09/30/02 10.50:1
10/01/02 through (and including) 12/31/02 6.50:1
01/01/03 through (and including) 03/31/03 4.50:1
04/01/03 and thereafter 3.00:1
SECTION II.2.9. Clause (b)(ii) of Section 7.2.4 of the Existing
Credit Agreement is hereby amended and restated to read in its entirety as
follows:
(ii) Minimum Pro Forma Debt Service Coverage Ratio. Neither
the Parent nor the Borrower will permit the Pro Forma Debt Service
Coverage Ratio as of the last day of any Fiscal Quarter occurring
during any period set forth below to be less than the ratio set forth
opposite such period:
Period Total Leverage Ratio
07/01/01 through (and including) 03/31/03 n/a
04/01/03 through (and including) 06/30/03 1.00:1
07/01/03 and thereafter 1.10:1
SECTION II.2.10. Clause (b)(iii) of Section 7.2.4 of the Existing
Credit Agreement is hereby amended and restated to read in its entirety as
follows:
(iii) Minimum Interest Coverage Ratio. Neither the Parent nor
the Borrower will permit the Interest Coverage Ratio as of the last
day of any Fiscal Quarter occurring during any period set forth below
to be less than the ratio set forth opposite such period:
Period Interest Coverage Ratio
07/01/01 through (and including) 06/30/02 n/a
07/01/02 through (and including) 09/30/02 1.00:1
10/01/02 through (and including) 12/31/02 1.50:1
01/01/03 through (and including) 03/31/03 2.00:1
04/01/03 and thereafter 3.00:1
SECTION II.2.11. Clause (b) of Section 7.2.7 of the Existing Credit
Agreement is hereby amended by deleting the grid appearing therein and
inserting the following grid in replacement therefor:
Fiscal Year Capital Expenditure Amount
2000 $175,000,000
2001 $130,000,000
2002 $100,000,000
2003 $100,000,000
2004 $100,000,000
2005 $100,000,000
2006 and thereafter $100,000,000
ARTICLE III
CONDITIONS TO EFFECTIVENESS
This Amendment and the amendments contained herein shall become
effective on the date (the "Fourth Amendment Effective Date") when each of
the conditions set forth in this Article III shall have been fulfilled to
the satisfaction of the Administrative Agent.
SECTION III.1. Counterparts. The Administrative Agent shall have
received counterparts hereof executed on behalf of the Borrower, the Parent
and the Required Lenders.
SECTION III.2. Amendment Fee. The Administrative Agent shall have
received, for the account of each Lender executing this Amendment, an
amendment fee in an amount equal to 0.50% of such Lender's portion of the
Total Exposure Amount.
SECTION III.3. Cisco Leases. The Administration Agent shall have
received executed copies of the Cisco Lease Documents, each in form and
substance satisfactory to the Administrative Agent.
SECTION III.4. Legal Details, etc. All documents executed or
submitted pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and its
counsel shall have received all information and such counterpart originals
or such certified or other copies or such materials as the Administrative
Agent or its counsel may reasonably request, and all legal matters incident
to the transactions contemplated by this Amendment shall be satisfactory to
the Administrative Agent and its counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Amendment, the
Borrower and the Parent hereby represent and warrant as follows:
SECTION IV.1. Representations and Warranties. In order to induce the
Lenders to execute and deliver this Amendment, the Borrower and the Parent
represent and warrant to the Agents, the Lenders and the Issuer that, after
giving effect to the terms of this Amendment, the following statements are
true and correct: (a) the representations and warranties set forth in
Article VI of the Existing Credit Agreement and in the other Loan Documents
are true and correct on the Fourth Amendment Effective Date as if made on
the Fourth Amendment Effective Date (unless stated to relate solely to an
earlier date, in which case such representations and warranties were true
and correct in all material respects as of such earlier date); and (b) no
Default has occurred and has been continuing.
SECTION IV.2. Validity, etc. This Amendment constitutes the legal,
valid and binding obligation of the Borrower and the Parent, enforceable in
accordance with its terms, subject to the effect of any applicable
bankruptcy, insolvency, moratorium or similar laws affecting creditors'
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.
SECTION IV.3. Restrictive Covenants. The covenants and obligations
contained in the agreements relating to the other Indebtedness of the
Borrower and its Subsidiaries, other than those set forth in the Cisco Lease
Documents, are no more restrictive or more burdensome on the Borrower or
such Subsidiaries than those contained in the Loan Documents.
ARTICLE V
COVENANTS
In order to induce the Lenders to enter into this Amendment, the
Borrower and the Parent hereby agree as follows:
SECTION V.1. Warrants. The Borrower shall provide the Lenders, pro
rata in accordance with their portion of the Total Exposure Amount, with
warrants to acquire Capital Securities of the Borrower in an amount equal to
50% of the warrants provided to Cisco Systems Capital Corporation or any of
its affiliates in connection with the Cisco Lease Documents (the "Cisco
Warrants"), in each case on the dates any Cisco Warrants are provided and
containing identical terms as the Cisco Warrants, including as to exercise
price, term and the inclusion of registration rights and anti-dilution
protection, such warrants to be otherwise in form and substance satisfactory
to the Administrative Agent.
ARTICLE VI
MISCELLANEOUS
SECTION VI.1. Cross References. References in this Amendment to any
article or section are, unless otherwise specified, to such article or
section of this Amendment.
SECTION VI.2. Loan Document Pursuant to Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Existing Credit
Agreement and shall be construed, administered and applied in accordance
with all of the terms and provisions of the Existing Credit Agreement.
SECTION VI.3. Successors and Assigns. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
SECTION VI.4. Counterparts. This Amendment may be executed by the
parties hereto in several counterparts, all of which shall be deemed to be
an original and which shall constitute together but one and the same
agreement.
SECTION VI.5. Expenses. The Borrower hereby agrees to pay to or
reimburse the Administrative Agent, upon demand, all of its reasonable
expenses in connection with the development, negotiation, preparation,
execution and closing of this Amendment, including all reasonable fees and
other charges of Xxxxx, Xxxxx & Xxxxx in connection therewith.
SECTION VI.6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers hereunder duly authorized as of the
date and year first above written.
CTC COMMUNICATIONS CORP.
By:_____________________________
Title:
CTC COMMUNICATIONS GROUP, INC.
By:_____________________________
Title:
TORONTO DOMINION (TEXAS), INC.,
as Lender
By:_____________________________
Title:
CREDIT SUISSE FIRST BOSTON,
as Lender
By:_____________________________
Title:
By:_____________________________
Title:
XXXXXX COMMERCIAL PAPER INC.,
as Lender
By:_____________________________
Title:
SYNDICATED LOAN FUNDING TRUST,
as Lender
By:_____________________________
Title:
ING (U.S.) CAPITAL LLC,
as Lender
By:_____________________________
Title:
By:_____________________________
Title:
CISCO SYSTEMS, INC.,
as Lender
By:_____________________________
Title:
RFC CAPITAL CORPORATION,
as Lender
By:_____________________________
Title:
IBM CREDIT CORPORATION,
as Lender
By:_____________________________
Title:
17039707
