Exhibit 10.8
[Letterhead]
September 30, 1997
Xx. Xxxxxx X. Postal
Chief Financial Officer
PSINet Inc.
000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Dear Ed:
Reference is hereby made to the Amended and Restated Credit Agreement, as
amended, (the "Agreement") made as of the 10th day of November, 1995 by and
between PSINet Inc. (f/k/a Performance Systems International, Inc.) ("PSI") and
Fleet National Bank (f/k/a Fleet National Bank of Connecticut, successor by
merger to Fleet Bank of Massachusetts, N.A.) (the "Bank"). PSI has requested
that the Bank amend several financial covenants as follows:
Section 4.22 Quick ratio - For the quarter ending September 30, 1997 a ratio
not to be less than 1.15:1.00; for the quarter ending December 31, 1997 and
thereafter a ratio not to be less than 1.25:1.00.
Section 4.23 Tangible Net Worth - For the quarter ending September 30, 1997
the requirement shall equal or exceed $55,000,000; for quarter ending December
31, 1997 the requirement shall equal or exceed $75,000,000; for quarter ending
March 31, 1998 the requirement shall equal or exceed $70,000,000; for the
quarter ending June 30, 1998 and thereafter, the requirement shall equal or
exceed $67,500,000. The foregoing shall be increased by (i) 80% of all positive
net income earned during the applicable fiscal quarter, plus (ii) 50% of the net
tangible proceeds in excess of $40,000,000 received from the sale by PSI of any
shares of its capital stock during the fiscal quarter ending December 31, 1997;
and 50% of all such net tangible proceeds commencing with the fiscal quarter
ending March 31, 1998.
Section 4.24 Consolidated EBITDA - For the quarter ending September 30, 1997
the requirement shall be not less than negative $4,000,000; for the quarters
ending December 31, 1997, March 31, 1998, June 30, 1998, AND September 30, 1998
the requirement shall be not less than $1, $1,000,000 and $2,500,000, and
$5,000,000 respectively.
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Section 4.25 Leverage Ratio - For the quarter ending September 30, 1997 a ratio
not to exceed 1.65:1.00; for the quarter ending December 31, 1997 a ratio not to
exceed 1.25:1.00; for the quarter ending March 31, 1998 and thereafter,
a ratio not to exceed 1.50:1.00, subject to the proviso in section 4.25. Total
liabilities as defined under section 4.25 shall exclude any obligations to
deliver additional securities, cash or a combination thereof (at the option of
PSI) pursuant to the bandwidth transaction with IXC Communications Inc.
Section 4.26 Debt Service Ratio - The ratio of Consolidated EBITDA to Debt
Service shall, as of the last day of each fiscal quarter commencing with the
fiscal quarter ending December 31, 1998 equal or exceed 1.25:1.00. Debt service
as defined under section 4.26 shall exclude any interest accreting as a result
of any obligations to deliver additional securities, cash or a combination
thereof (at the option of PSI) pursuant to the bandwidth transaction with IXC
Communications, Inc. There shall be no debt service ratio applicable prior to
the fiscal quarter ending December 31, 1998.
In addition, PSI requests that the Bank extend the Revolving Credit Maturity
Date until December 31, 1997.
In accordance with the amendments detailed herein PSI shall remit to the Bank an
amendment fee of $12,500.
The Bank hereby consents to these changes. Nothing herein shall be deemed to
constitute a waiver, release or amendment of any other terms of the Agreement.
PSI represents and warrants that the execution of this amendment has been duly
authorized by PSI by all necessary corporate and other action and that the
execution will not conflict with, violate the provisions of, or cause a default
or cause an event which, with the passage of time or giving of notice or both,
could cause a default on the part of PSI under its charter documents or by-laws
or under any contract, agreement, law, rule, order, ordinance, franchise,
instrument or other document, or result in the imposition of any lien or
encumbrance on any property or asset of PSI.
PSI further represents that this letter represents legal, valid and binding
obligations of PSI, enforceable against PSI in accordance with their respective
terms. In addition, the statements, representations and warranties made in the
Agreement continue to be correct as of the date hereof, except for those
representations which relate to a specific date which are true and correct as of
such date, and PSI is in compliance with all terms of the Agreement. Except as
expressly affected hereby, the Agreement remains in full force and effect as
heretofore.
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Ed, we again look forward to continuing our relationship with PSI. Please sign
below to evidence your acceptance of this amendment, whereupon this amendment
shall be a biding agreement between us.
Yours sincerely
Fleet National Bank.
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
By: Xxxxxx X. Xxxxxx
Title: Senior Vice President
Agreed and Accepted /s/ Xxxxxx X. Postal Date:
------------------------------- ---------------------
Xxxxxx X. Postal
Chief Financial Officer
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ALLONGE TO PROMISSORY NOTE
The maturity date of the attached Promissory Note dated November 30, 1994 (As
Amended and Restated through November 10, 1995) for $5,000,000 is hereby
extended to December 31, 1997 from September 30, 1997.
This Allonge will be governed by the terms and conditions of the Amended and
Restated Credit Agreement, as amended (the "Agreement"), made as of the 10th day
of November, 1995 by and between PSINet Inc. (f/k/a Performance Systems
International, Inc.) and Fleet National bank (f/k/a Fleet National Bank of
Connecticut, successor by merger to Fleet Bank of Massachusetts, N.A.). Nothing
herein shall be deemed to constitute a waiver, release or amendment of any terms
of the Agreement.
/s/ Xxxxxx X. Postal
----------------------------------- -------------------------------
Witness Name: Xxxxxx X. Postal
Title: CFO
PSINet Inc.
Date: 9/30/97
/s/ [Illegible] /s/ Xxxxxx X. Xxxxxx
----------------------------------- -------------------------------
Witness Xxxxxx X. Xxxxxx
Senior Vice President
Fleet National Bank
Date: 9/30/97
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