EXHIBIT 10.4
EXECUTION COPY
THIRD AMENDMENT TO THE CREDIT AGREEMENT
THIS THIRD AMENDMENT TO THE CREDIT AGREEMENT, dated as of May 12, 2004
(this "AMENDMENT"), is among CHOICE ONE COMMUNICATIONS INC., a Delaware
corporation (the "GUARANTOR"), the subsidiaries of the Guarantor listed on the
signature pages hereto (each a "BORROWER" and collectively the "BORROWERS"), the
banks, financial institutions and other institutional lenders parties to the
Credit Agreement referred to below (collectively, the "LENDERS"), GENERAL
ELECTRIC CAPITAL CORPORATION, as successor administrative agent (in such
capacity, the "ADMINISTRATIVE AGENT") and syndication agent for the Lenders, and
the other agents signatories hereto.
PRELIMINARY STATEMENTS:
(1) The Guarantor, the Borrowers, the Lenders, the Administrative Agent,
and certain other agents have entered into the Third Amended and Restated Credit
Agreement dated as of September 13, 2002 (as amended, supplemented or otherwise
modified through the date hereof, the "CREDIT AGREEMENT"). Capitalized terms not
otherwise defined in this Amendment have the same meanings as specified in the
Credit Agreement.
(2) The Guarantor and the Borrowers have requested that the Lenders agree
to amend certain provisions of the Credit Agreement as hereinafter set forth.
(3) The Lenders are willing to grant such request of the Guarantor and the
Borrowers, but only on the terms and conditions stated below, and the Guarantor,
the Borrowers and, subject to such terms and limitations, the Lenders have
agreed to amend certain provisions of the Credit Agreement as hereinafter set
forth.
SECTION 1. Amendment to Credit Agreement. The Credit Agreement is hereby
amended, effective as of the Effective Date (as defined in section 2 below), as
follows:
(a) Section 5.3 is amended and restated to read in full as follows:
"In order to compensate the Agents with respect to the Credit Facility, the
Borrowers agree to pay General Electric Capital Corporation the fees set forth
in the separate fee letter agreement executed by the Company with respect to the
Credit Facility dated April 19, 2004."
(b) Section 7.1(a)(a) is amended and restated to read in full as follows:
"Deposit Accounts: Securities Accounts (i) Schedule 7.l(a)(a) sets forth
all of the Deposit Accounts and all "securities accounts" (as defined in the
UCC) of the Company and its Subsidiaries.
(ii) Legal, binding and enforceable account control agreements or similar
agreements permitting the Administrative Agent to obtain "control" (as such term
is now or hereafter defined in the UCC) are in effect for each Deposit Account
and "securities account" (as defined in the UCC) of the Company and its
Subsidiaries other than the following accounts (the "EXCLUDED ACCOUNTS") so long
as the balance in each such account is less than $20,000: (1) Xxxxxxx Xxxxx
account number 810-07U38 (stock option clearing account), (2) Xxxxxxx Xxxxx
account number 8l0-07Ul5 (purchase card clearing account and (3) Xxxxxxx Xxxxx
account number 810-07002 (purchase card clearing account)."
(c) Section 9.12(e) is amended and restated to read in full as follows:
"Simultaneously with (i) the opening of any Deposit Account or any
"securities account" (as defined in the UCC) by the Company or any of its
Subsidiaries or (ii) the balance in any of the Excluded Accounts (as defined in
Section 7.1(a)(a)) exceeding $20,000, 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, such "securities account" (as defined in the UCC) or such
Excluded Account, as the case may be.
(d) Section 10.1(a) is amended and restated to read in full as follows:
"(a) Minimum Available Cash. (i) At any time prior to and including May 10,
2004, permit Available Cash of the Company and its Subsidiaries to be less than
$10,000,000 or (ii) at any time from and including May 11, 2004 to and including
November 15, 2004, permit Available Cash of the Company and its Subsidiaries to
be less than $6,000,000; it being understood and agreed that, notwithstanding
any provisions contained in Article XII to the contrary, the failure by the
Company and its Subsidiaries to be in compliance with the foregoing amounts of
Available Cash at any time during the foregoing periods shall be an immediate
Event of Default, and no grace period or notice requirement shall be
applicable."
(e) Section 4.5(c)(vi) is amended by adding the following sentence at the
end thereof: "For purposes of clarity, it is understood and agreed that in the
event that the Borrowers shall fail to pay any of the Obligations when due and
the Obligations have been accelerated pursuant to Section 12.2, or upon the sale
or other disposition of any of the collateral security provided pursuant to the
Security Documents, the provisions of Section 5.5 of this Agreement shall
apply."
(f) Section 15.11 is amended by adding immediately prior to the period at
the end of the last paragraph thereof the following: "and notwithstanding any
provision of the Loan Documents (including the Intercreditor Agreement) to the
contrary, the aggregate principal amount of Debt outstanding under the Credit
Agreement shall not exceed $398,875,000 (excluding any capitalized interest)
without the prior written consent of the Required Lenders".
(g) (i) Schedule 7.1(a)(a) is amended and restated to read in full as set
forth in Exhibit A attached hereto and (ii) the list of Schedules in the table
of contents is amended by
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adding thereto after the reference to Schedule 7.1(w) the following: "Schedule
7.l(a)(a) - Deposit Accounts; Security Accounts".
SECTION 2. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written (the "AMENDMENT EFFECTIVE DATE")
when, and only when, the following conditions precedent shall have been
satisfied:
(a) The Administrative Agent shall have notified the parties hereto
that it has received counterparts of (i) this Amendment executed by the
Guarantor, the Borrowers and the Required Lenders or, as to any of the
Lenders, advice satisfactory to the Administrative Agent that such Lender
has executed this Amendment, and (ii) the Consent attached to this
Amendment executed by each of the Pledgors and each of the Grantors
designated therein;
(b) The Borrowers and Guarantor shall have paid in full any and all
accrued fees and expenses of the Administrative Agent in connection with
all matters relating to the Credit Agreement (other than the agency fee
referred to in Section 4(d)(i) below) and all fees and expenses of counsel
and financial advisors to the Administrative Agent invoiced prior to the
dated hereof; and
(c) The Borrowers and the Guarantor shall have provided an additional
cash retainer to counsel for the Administrative Agent, Shearman & Sterling
LLP, in such amount as has been previously discussed and agreed to.
SECTION 3. Representations and Warranties of the Borrowers. The Guarantor
and each Borrower, respectively, represents and warrants as follows:
(a) This Amendment has been duly executed and delivered by the
Guarantor and the Borrowers. This Amendment and each of the other Loan
Documents, as amended hereby, to which the Guarantor or any of the
Borrowers is a party are legal, valid and binding obligations of such
party, enforceable against such party in accordance with their respective
terms.
(b) (i) The representations and warranties set forth in Article VII of
the Credit Agreement and in the other Loan Documents are true and correct
on the Amendment Effective Date as if made on the Amendment Effective Date
and after giving effect to this Amendment (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
(ii) after giving effect to this Amendment, no Default has occurred and is
continuing.
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SECTION 4. Reference to and Effect on the Loan Documents: Etc. (a) On and
after the Effective Date, each reference in the Credit Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Credit Agreement, and each reference in the Notes and each of the other Loan
Documents to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended by this Amendment.
(b) The Credit Agreement, as specifically amended by this Amendment, is and
shall continue to be in full force and effect and is hereby in all respects
ratified and confirmed. Without limiting the generality of the foregoing, the
Security Documents and all of the Collateral described therein do and shall
continue to secure the payment of all Obligations of the Borrowers and the
Guarantor under the Loan Documents, in each case as amended by this Amendment.
(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Administrative Agent under the Loan Documents, nor
constitute a waiver of any provision of the Loan Documents.
(d) The Borrowers and the Guarantor jointly and severally agree (i) to pay
the agency fee agreed upon in the fee letter referred to in Section 5.3 of the
Credit Agreement, as amended by this Amendment, within 15 days after the date
hereof, (ii). to promptly pay all reasonable expenses of General Electric
Capital Corporation in connection with the preparation, execution and delivery
of this Amendment (as well as all outstanding invoices of professionals retained
by the Administrative Agent) and all matters related thereto and (iii) to pay
within 15 days of receipt thereof all invoices outstanding from time to time of
professionals retained by the Administrative Agent.
(e) It is understood and agreed that following the consummation of a
consensual restructuring of the Guarantor and its subsidiaries and after the
payment in full of any invoices of counsel to the Administrative Agent in
connection with such restructuring and any post-closing invoices of counsel to
the Administrative Agent in respect of such restructuring, any amounts remaining
on retainer with counsel to the Administrative Agent shall be returned promptly
to the Guarantor.
SECTION 5. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement. Delivery
of an executed counterpart of a signature page to this Amendment by facsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.
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SECTION 6. Modifications to this Amendment. Any provision of this Amendment
may be modified with the written consent of the Borrowers, the Guarantor and the
Required Lenders, except for any provision that, pursuant to Section 15.11 of
the Credit Agreement, would require the consent of all the Lenders (in which
case the written consent of all the Lenders shall be required).
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWERS:
CHOICE ONE COMMUNICATIONS OF NEW YORK INC.
CHOICE ONE COMMUNICATIONS OF PENNSYLVANIA INC.
CHOICE ONE COMMUNICATIONS OF MASSACHUSETTS INC.
CHOICE ONE COMMUNICATIONS INTERNATIONAL INC.
CHOICE ONE COMMUNICATIONS OF RHODE ISLAND INC.
CHOICE ONE COMMUNICATIONS OF CONNECTICUT INC.
CHOICE ONE COMMUNICATIONS OF MAINE INC.
CHOICE ONE OF NEW HAMPSHIRE INC.
CHOICE ONE COMMUNICATIONS OF OHIO INC.
CHOICE ONE COMMUNICATIONS OF VERMONT INC.
CHOICE ONE ONLINE INC.
CHOICE ONE COMMUNICATIONS OF VIRGINIA INC.
CHOICE ONE COMMUNICATIONS SERVICES INC.
US XCHANGE INC.
US XCHANGE OF INDIANA, L.L.C.
US XCHANGE OF ILLINOIS, L.L.C.
US XCHANGE OF WISCONSIN, L.L.C.
US XCHANGE OF MICHIGAN, L.L.C.
By: /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Title: CFO
for each of the entities set forth
above
GUARANTOR:
CHOICE ONE COMMUNICATIONS INC.
By: /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Title: CFO
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, Collateral Agent,
Syndication Agent and Lender
By: /s/ Xxxxxx Stefanowki
---------------------------
Name: Xxxxxx Stefanowki
Title: Duly Authorized Assignee
BANK OF AMERICA, N.A., as Lender
By: /s/ Xxx Xxxxxxx
---------------------------
Name: Xxx Xxxxxxx
Title: AVP
XXXXXXX FINANCIAL SERVICES
INTERNATIONAL INC., as Lender
By: /s/ Xxxxx Xxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxx
Title: Controller
By: /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Title: Portfolio Manager
CREDIT SUISSE FIRST BOSTON, as Lender
By: /s/ Xxxxxx Xxxxxxx
---------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
DEUTSCHE BANK TRUST COMPANY AMERICAS,
as Lender
By: DB Services New Jersey, Inc.
By: /s/ Xxxx Xxxxxxx
---------------------------
Name: Xxxx Xxxxxxx
Title: Director
FERNWOOD ASSOCIATES, L.P., as Lender
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
XXXXXXX XXXXX CREDIT PRODUCTS, LLC, as
Lender
By: /s/ Xxxxxxx Xxx
---------------------------
Name: Xxxxxxx Xxx
Title: Vice President
By:
---------------------------
Name:
Title:
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
as Documentation Agent and Lender
By: /s/ Xxx Xxxxxxx
---------------------------
Name: Xxx Xxxxxxx
Title: Vice President
QUANTUM PARTNERSHIP, as Lender
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
-----------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Attorney-in-Fact
XXXXXXX CAPITAL MANAGEMENT, XX XX, as
Lender
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: President
STRATEGIC VALUE MASTER FUND, LTD, as
Lender
By: Strategic Value Partners, L.L.C.
By: /s/ Xxxxxxxx Xxxxxxxxx
-----------------------------
Name: Xxxxxxxx Xxxxxxxxx
Title: Authorized Signatory
TRIAGE CAPITAL MANAGEMENT, LP, as
Lender
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxx
CONSENT
Dated as of May 12, 2004
Each of the undersigned, as a Grantor and/or Pledgor under the Third
Amended and Restated Security Agreement, dated as of September 13, 2002 (as
amended, supplemented or otherwise modified through the date hereof, the
"SECURITY AGREEMENT" and/or the Third Amended and Restated Pledge Agreement,
dated as of September 13, 2002 (as amended, supplemented or otherwise modified
through the date hereof, the "PLEDGE AGREEMENT"), in each case, in favor of the
Administrative Agent, for its benefit and the benefit of the Lenders parties to
the Credit Agreement referred to in the foregoing Third Amendment (the
"AMENDMENT"), hereby consents to such Amendment and hereby confirms and agrees
that (a) notwithstanding the effectiveness of such Amendment, each of the
Security Agreement and the Pledge Agreement is, and shall continue to be, in
full force and effect and is hereby ratified and confirmed in all respects,
except that, on and after the effectiveness of such Amendment, each reference in
the Security Agreement and the Pledge Agreement to the "Credit Agreement",
"thereunder", "thereof" or words of like import shall mean and be a reference to
the Credit Agreement, as amended by such Amendment, and (b) the Security
Documents to which such Grantor or such Pledgor, as the case may be, is a party
and all of the Collateral described therein do, and shall continue to, secure
the payment of all of the Secured Obligations (in each case, as defined
therein).
CHOICE ONE COMMUNICATIONS INC.
CHOICE ONE COMMUNICATIONS OF NEW YORK INC.
CHOICE ONE COMMUNICATIONS OF PENNSYLVANIA INC.
CHOICE ONE COMMUNICATIONS OF MASSACHUSETTS INC.
CHOICE ONE COMMUNICATIONS INTERNATIONAL INC.
CHOICE ONE COMMUNICATIONS OF RHODE ISLAND INC.
CHOICE ONE COMMUNICATIONS OF CONNECTICUT INC.
CHOICE ONE COMMUNICATIONS OF MAINE INC.
CHOICE ONE OF NEW HAMPSHIRE INC.
CHOICE ONE COMMUNICATIONS OF OHIO INC.
CHOICE ONE COMMUNICATIONS OF VERMONT INC.
CHOICE ONE ONLINE INC.
CHOICE ONE COMMUNICATIONS OF VIRGINIA INC.
CHOICE ONE COMMUNICATIONS SERVICES INC.
US XCHANGE INC.
US XCHANGE OF INDIANA, L.L.C.
US XCHANGE OF ILLINOIS, L.L.C
US XCHANGE OF WISCONSIN, L.L.C.
US XCHANGE OF MICHIGAN, L.L.C.
By: /s/ Xxxx Xxxxxxxxx
---------------------------
Name: Xxxx Xxxxxxxxx
Tile: CFO
