EXHIBIT 10.41
THIRD AMENDMENT, dated as of December 10, 2001 (this "Third
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Amendment"), among FIBERNET OPERATIONS, INC., a Delaware corporation
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("FiberNet"), DEVNET L.L.C., a Delaware limited liability company ("Devnet" and,
together with FiberNet, the "Borrowers"), and DEUTSCHE BANK AG NEW YORK BRANCH
("DBAG"), as administrative agent for the Lenders (in such capacity, the
"Administrative Agent") for the financial institutions party to the Credit
Agreement (as defined below) as lenders (collectively, the "Lenders"), to the
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 9, 2001 (the "Credit
Agreement"), among the Borrowers, the Lenders, the Xxxxxxxxxxxxxx Xxxxx, XXXXXXX
XXXXXXXX (XXX) SECURITIES INC. ("TD"), as syndication agent for the Lenders (in
such capacity, the "Syndication Agent"), and FIRST UNION INVESTORS, INC., as
documentation agent for the Lenders (in such capacity, the "Documentation
Agent").
RECITALS
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WHEREAS, the Borrowers wish to make certain amendments to the Credit
Agreement, which are more particularly described herein.
AGREEMENT
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NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein contained and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I.
DEFINITIONS
Capitalized terms used but not otherwise defined herein shall have the
meanings given to such terms in the Credit Agreement.
ARTICLE II.
AMENDMENTS
Section 2.01 Definitions.
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(a) The following defined terms are added to Section 1.1 of the Credit
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Agreement in their proper alphabetical order:
"First Closing" means the issuance of $2,300,000 of Series J
Convertible Preferred stock by Parent to SDS Merchant Fund, L.P., representing
the first installment of the SDS Merchant Equity Contribution.
"SDS Merchant Equity Contribution" means the contribution of cash to
the equity capital of the Parent by SDS Merchant Fund, L.P. in an aggregate
amount of not less than $8,000,000.
"SDS Merchant Equity Contribution Documents" means the definitive
documentation regarding the SDS Merchant Equity Contribution.
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"Second Closing" means the issuance of $2,600,000 of Series J
Convertible Preferred stock by Parent to SDS Merchant Fund, L.P., representing
the second installment of the SDS Merchant Equity Contribution.
"Third Closing" means the issuance of $3,100,000 of Series J
Convertible Preferred stock by Parent to SDS Merchant Fund, L.P., representing
the third installment of the SDS Merchant Equity Contribution.
(b) The definition of "Stage 1" is amended by replacing the words "December 30,
2002" in the fourth line thereof with the words "March 31, 2003".
(c) The definition of "Change in Control" is amended by adding the words "(other
than the sale of up to 35% of the Capital Stock of the Parent to SDS Merchant
Fund, L.P. and its Affiliates)" after the words "to any such `person' or
`group'" in the sixth line thereof
Section 2.02 Equity Financing Fee.
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(a) Section 2.4.D. of the Credit Agreement is deleted in its entirety.
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Section 2.03 Borrowing Mechanics.
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(a) Section 2.1.B.(i) of the Credit Agreement is amended by adding the
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words ", or the entire remaining undrawn amount thereof" after the words "in
excess of that amount" in the forth line thereof.
Section 2.04 Prepayments Due to Issuance of Debt or Equity.
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(a) Section 2.5.B.(iii)(d) of the Credit Agreement is amended by (i)
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replacing the words "the first $38,000,000" in the twentieth line thereof with
the words "the first $39,000,000" and (ii) replacing the words "December 31,
2001" in the twenty-third line thereof with the words "December 31, 2002".
Section 2.05 Monthly Statements.
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(a) The following covenant shall be added to Section 5.1 of the Credit
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Agreement:
(xvi) Monthly Statements: as soon as available, and in any
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event within (a) 15 days after the end of each calendar month (other
than the months of March, June, September and December) or (b) 30 days
after then end of the months of March, June, September and December, a
monthly statement of the members of the Borrower Group as at the end of
such month setting forth (1) their Available Cash as at such date, (2)
their accounts receivable balance as at such date and the actual number
of days such receivables are outstanding, and (3) their accounts
payable balance as at such date and the actual number of days such
payables are outstanding.
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Section 2.06 Additional Equity Contribution.
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(a) The following covenant shall be added to Article V of the Credit
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Agreement:
SECTION 5.16 ADDITIONAL EQUITY CONTRIBUTION
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The Administrative Agent shall have received evidence
demonstrating to the reasonable satisfaction of the Administrative
Agent, the Syndication Agent and the Documentation Agent that the
Parent shall have received cash proceeds (net of underwriting
discounts, commissions and the reasonable expenses associated
therewith) in an amount equal to or greater than $5,000,000 from the
issuance of its Capital Stock during the period from and after the
First Closing to and including December 31, 2002 (which $5,000,000
shall be in addition to the SDS Merchant Equity Contribution), and the
Parent shall have contributed (or shall concurrently contribute) the
proceeds thereof as equity to FiberNet pursuant to an equity
contribution agreement reasonably satisfactory to the Administrative
Agent, the Syndication Agent and the Documentation Agent.
Section 2.07 Pro Forma Compliance.
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(a) Section 3.2.E. of the Credit Agreement is amended by replacing the
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words "set forth in Sections 6.6.A., 6.6.B. and 6.6.E." in the forth line
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thereof with the words "set forth in Sections 6.6.A. and 6.6.E.".
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Section 2.08 Financial Covenants.
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(a) Section 6.6.B. of the Credit Agreement is deleted in its entirety.
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(b) Section 6.6.C. of the Credit Agreement is amended by deleting the chart
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which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:
=================================== ================================
Date Minimum Cumulative Net Revenue
From January 1, 2000
(in Dollars)
----------------------------------- --------------------------------
March 31, 2001 28,014,300
----------------------------------- --------------------------------
June 30, 2001 34,728,200
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September 30, 2001 36,761,700
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December 31, 2001 49,121,300
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March 31, 2002 56,398,000
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June 30, 2002 65,677,000
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September 30, 2002 76,669,100
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December 31, 2002 89,437,900
=================================== ================================
(c) Section 6.6.D. of the Credit Agreement is amended by deleting the chart
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which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:
==================================== ===============================
Date Minimum Cumulative
Consolidated EBITDA From
January 1, 2000
(in Dollars)
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March 31, 2001 (28,501,900)
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June 30, 2001 (34,821,300)
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September 30, 2001 (39,691,600)
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December 31, 2001 (36,233,100)
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March 31, 2002 (36,842,800)
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June 30, 2002 (35,515,000)
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September 30, 2002 (33,491,500)
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December 31, 2002 (29,268,000)
==================================== ===============================
(d) Section 6.6.F. of the Credit Agreement is amended by deleting the chart
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which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:
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Date Maximum Cumulative Consolidated
Capital Expenditures
From January 1, 2000
(In Dollars)
---------------------------------- -----------------------------------
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March 31, 2001 98,341,200
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June 30, 2001 112,119,400
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September 30, 2001 124,627,000
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December 31, 2001 130,732,200
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March 31, 2002 132,860,300
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June 30, 2002 135,182,400
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September 30, 2002 137,509,500
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December 31, 2002 140,219,800
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March 31, 2003 142,935,300
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June 30, 2003 145,215,200
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September 30, 2003 147,626,400
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December 31, 2003 150,169,000
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March 31, 2004 152,906,100
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June 30, 2004 155,459,700
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September 30, 2004 158,082,000
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December 31, 2004 161,025,000
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March 31, 2005 163,469,700
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June 30, 2005 165,920,200
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September 30, 2005 168,439,500
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December 31, 2005 170,964,900
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March 31, 2006 173,471,200
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June 30, 2006 175,872,700
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September 30, 2006 178,342,700
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December 31, 2006 181,023,000
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(e) Section 6.6.G. of the Credit Agreement is amended by deleting the chart
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which appears immediately after the words "set forth below:" in the fourth line
thereof and adding the following chart after the words "set forth below:" in the
fourth line thereof:
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Date Consolidated Leverage Ratio
----------------------------------- --------------------------------
From and after the last day of 6.0 to 1.0
the first Fiscal Quarter to occur
during Stage 2 until and
including March 31, 2003
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June 30, 2003 4.25 to 1.0
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September 30, 2003 3.75 to 1.0
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December 31, 2003 3.25 to 1.0
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March 31, 2004 2.75 to 1.0
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June 30, 2004 2.25 to 1.0
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September 30, 2004 and the last 2.00 to 1.0
day of each Fiscal Quarter
thereafter
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(f) Section 6.6.H. of the Credit Agreement is amended by deleting it in its
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entirety and replacing it with the following:
H. Consolidated Interest Coverage Ratio. At the end of each Fiscal
Quarter of the Borrower Group during Stage 2, no Borrower shall permit the
Consolidated Interest Coverage Ratio to be less than (i) from and after the
last day of the first Fiscal Quarter to occur during Stage 2 until and
including March 31, 2003, 2.00 to 1.0 and (ii) from and after June 30, 2003
until and including the first day of each Fiscal Quarter thereafter, 3.0 to
1.0.
(g) Section 6.6.I. of the Credit Agreement is amended by deleting it in its
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entirety and replacing it with the following:
I. Consolidated Fixed Charge Coverage Ratio. At the end of each Fiscal
Quarter of the Borrower Group during Stage 2, no Borrower shall permit the
Consolidated Fixed Charge Coverage Ratio to be less than (i) from and after
the last day of the first Fiscal Quarter to occur during Stage 2 until and
including
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March 31, 2003, 1.75 to 1.0, (ii) from June 30, 2003 until and including
December 31, 2003, 2.00 to 1.0 and (iii) from and after March 31, 2004
until and including the last day of each Fiscal Quarter thereafter, 1.50 to
1.0.
Section 2.09 Events of Default.
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(a) Article VII of the Credit Agreement is amended by replacing the words
"Section 7.1 through Section 7.17" in the second line thereof with the words
"Section 7.1 through Section 7.19".
Section 2.10 SDS Merchant Equity Contribution.
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(a) The following event of default shall be added to Article VII of the
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Credit Agreement:
SECTION 7.19 SDS MERCHANT EQUITY CONTRIBUTION
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The Parent shall have opted out of the Second Closing or Third Closing of
the SDS Merchant Equity Contribution without the prior written consent of the
Majority Lenders.
Section 2.11 Remedies.
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(a) Section 7.19 of the Credit Agreement is renumbered as Section 7.20 of
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the Credit Agreement.
ARTICLE III.
MISCELLANEOUS
Section 3.01 Execution of this Third Amendment; Effectiveness.
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This Third Amendment is executed and shall be construed as an amendment
to the Credit Agreement, and, as provided in the Credit Agreement, this Third
Amendment forms a part thereof. This Third Amendment shall be effective only if
each of the following conditions is satisfied prior to 5:00 p.m. New York City
time on a Business Day occurring on or before December 10, 2001:
(a) The First Closing shall have been consummated on the terms set forth in
the SDS Merchant Equity Contribution Documents and upon satisfaction of the
conditions therein set forth; and
(b) The Borrowers shall have paid to each of the Lenders an amendment fee
equal to the product of 0.1% multiplied by the amount of each such Lender's Loan
Exposure as of December 10, 2001.
Section 3.02 Representations and Warranties.
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The Borrowers hereby represent and warrant to the Administrative Agent
and the Lenders that (a) all consents, approvals and authorizations necessary
for the Borrowers' execution,
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delivery and performance of this Third Amendment have been obtained or made and
(b) this Third Amendment has been duly executed and delivered by the Borrowers
and constitutes a legal, valid and binding obligation of each Borrower,
enforceable against such Borrower in accordance with its terms.
Section 3.03 Waiver.
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This Third Amendment is made in amendment and modification of, but not
extinguishment of, the obligations set forth in the Credit Agreement and the
other Loan Documents and, except as specifically modified pursuant to the terms
of this Third Amendment, the terms and conditions of the Credit Agreement and
the other Loan Documents remain in full force and effect. Nothing herein shall
limit in any way the rights and remedies of the Administrative Agent and the
Lenders under the Credit Agreement and the other Loan Documents. The execution
and delivery by the Lenders of this Third Amendment shall not constitute a
waiver, forbearance or other indulgence with respect to any Potential Event of
Default or Event of Default now existing or hereafter arising.
Section 3.04 Counterparts; Integration; Effectiveness.
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This Third Amendment may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Third Amendment and any agreements referred to herein constitute
the entire contract among the parties hereto relating to the subject matter
hereof and supersede any and all previous agreements and understandings, oral or
written, relating to the subject matter hereof. In addition to the requirements
set forth above in Section 3.01, this Third Amendment shall become effective
when it shall have been executed by each of the Borrowers and the Administrative
Agent and when the Administrative Agent shall have received the written consent
of the Majority Lenders to the entering into of this Third Amendment, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and, subject to and in accordance with Section 9.16 of the Credit Agreement,
their respective successors and assigns. Delivery of an executed counterpart of
a signature page of this Third Amendment by telecopy shall be as effective as
delivery of a manually executed counterpart of this Third Amendment.
Section 3.05 Severability.
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Any provision of this Third Amendment held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof, and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
Section 3.06 Governing Law.
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This Third Amendment shall be construed in accordance with and governed
by the laws of the State of New York without regard to the conflicts of law
provisions thereof, other than Sections 5-1401 and 5-1402 of the General
Obligations Law of the State of New York.
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Section 3.07 Headings.
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Article and Section headings used herein are for convenience of
reference only, are not part of this Third Amendment and shall not affect the
construction of, or be taken into consideration in interpreting, this Third
Amendment.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment
to be duly executed by their respective authorized officers as of the day and
year first above written.
FIBERNET OPERATIONS, INC.
By:
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Name:
Title:
DEVNET L.L.C.
By:
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Name:
Title:
DEUTSCHE BANK AG NEW YORK
BRANCH, as Administrative Agent
By:
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Name:
Title:
By:
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Name:
Title:
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