Exhibit 10.11
SECOND AMENDMENT AND LIMITED WAIVER
SECOND AMENDMENT AND LIMITED WAIVER (this "AMENDMENT"), dated as of
November 28, 2001, among FAIRPOINT COMMUNICATIONS SOLUTIONS CORP., a Delaware
corporation (the "BORROWER"); the Credit Parties (other than the Parent) listed
on the signature pages hereof, for purposes of Section D hereof only; the
Parent, for purposes of Section E hereof only; the lenders party to the Credit
Agreement referred to below (each, a "LENDER" and, collectively, the "LENDERS");
and FIRST UNION NATIONAL BANK, as Administrative Agent (in such capacity, the
"ADMINISTRATIVE AGENT"). Unless otherwise defined herein, capitalized terms used
herein and defined in the Credit Agreement referred to below are used as so
defined.
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders and the Administrative Agent have
entered into that certain Amended and Restated Credit Agreement, dated as of
October 20, 1999, as amended and restated as of March 27, 2000, as further
amended and restated as of November 9, 2000 and as amended by the First
Amendment dated as of March 9, 2001 (as so amended and amended and restated, the
"CREDIT AGREEMENT"); and
WHEREAS, the Borrower desires to sell certain assets (the "NORTHWEST
ASSETS"), including voice, data and Internet access services, relating to its
business and operations as presently conducted in the states of Washington and
Oregon to Advanced TelCom, Inc., for gross cash consideration in the amount of
$3,866,000 (subject to adjustment on the terms set forth in the Northwest Asset
Sale Agreement (as defined in Section A.1 of this Amendment)), pursuant to the
terms of the Northwest Asset Sale Agreement; and
WHEREAS, the Borrower has requested that Lenders waive, and Lenders have
agreed to waive, subject to the terms and conditions set forth below, certain
restrictions contained in Section 5.02(d) and 9.02 of the Credit Agreement with
respect to the contemplated sale of the Northwest Assets; and
WHEREAS, subject to the terms and conditions set forth below, the parties
hereto wish to amend the Credit Agreement as provided herein.
NOW, THEREFORE, it is hereby agreed that;
A. AMENDMENTS TO CREDIT AGREEMENT
1. Section 1 of the Credit Agreement is hereby amended by inserting
therein the following new defined terms in appropriate alphabetical order:
"Northwest Asset Sale" shall mean the Asset Sale contemplated by the
Northwest Asset Sale Agreement.
"Northwest Asset Sale Agreement" shall mean that certain Asset
Purchase Agreement dated as of October 19, 2001, by and between the
Borrower and Advanced TelCom, Inc., as in effect on the Second Amendment
Effective Date and as it may be amended, supplemented or otherwise modified
by the Borrower and ATG in a manner not materially adverse to the Lenders
or with the consent of the Required Lenders.
"Northwest Asset Sale Proceeds Schedule" shall mean the schedule
setting forth the Borrower's proposed uses for the proceeds from the
Northwest Asset Sale, attached to the Second Amendment as Annex A.
"Second Amendment" shall mean the Second Amendment and Limited Waiver
to this Agreement dated as of November 28, 2001.
"Second Amendment Effective Date" shall have the meaning assigned to
that term in the Second Amendment.
2. Section 2.03 of the Credit Agreement is hereby amended by inserting
the following new subparagraph (d) immediately after subparagraph (c) thereof:
"(d) Anything contained herein to the contrary notwithstanding,
(i) from the Second Amendment Effective Date through and including December
31, 2001, the Borrower shall not be permitted to deliver any Notice of
Borrowing (or telephonic notice in lieu thereof) to the Administrative
Agent, or to borrow additional Revolving Loans, and no Lender shall be
obligated to make additional Revolving Loans during such period, and (ii)
after December 31, 2001, the Borrower shall not be permitted to deliver any
Notice of Borrowing (or telephonic notice in lieu thereof) to the
Administrative Agent, or to borrow additional Revolving Loans, and no
Lender shall be obligated to make additional Revolving Loans during such
period, without in each such case the prior consent of each Lender".
3. Section 3.03 of the Credit Agreement is hereby amended by inserting
the following new subparagraph (d) immediately after subparagraph (c) thereof:
"(d) Anything contained herein to the contrary notwithstanding, (i)
from and after the Second Amendment Effective Date through and including
December 31, 2001, the Borrower shall not be permitted to deliver any
Letter of Credit Request to the Administrative Agent or any proposed
Issuing Lender, and no Lender shall be obligated to issue any Letter of
Credit and (ii) after December 31, 2001, the Borrower shall not be
permitted to deliver any Letter of Credit Request to the Administrative
Agent or any proposed Issuing Lender, and no Lender shall be obligated to
issue any Letter of Credit, without in each such case the prior consent of
each Lender".
4. Section 4.03(c) of the Credit Agreement is hereby amended by
deleting it in its entirety therefrom and substituting therefor the following:
"(c) In addition to any other mandatory commitment reductions
pursuant to this Section 4.03, the Total Revolving Commitment shall be
permanently reduced (i) on the Second Amendment Effective Date to
$23,550,000 and (ii) from time to time in accordance with Section 5.02(h)
(it being understood that the proceeds from the Northwest Asset Sale shall
be used in accordance with the Northwest Asset Sale Proceeds Schedule)".
B. WAIVERS
Effective as of the Second Amendment Effective Date (as defined
below), the Lenders hereby waive (a) the restrictions imposed under Section 9.02
of the Amended Agreement to permit the sale of the Northwest Assets as
contemplated pursuant to the Northwest Asset Sale Agreement and (b) the
requirement imposed under Section 5.02(d) of the Amended Agreement to permit all
or a portion of the Net Cash Proceeds of such sale of the Northwest Assets to be
applied to purposes other than repayment of Loans, and hereby authorize and
request the Collateral Agent to (X) deliver to the Borrower upon closing of such
Asset Sale all applicable UCC-3 termination statements requested by the Borrower
and (Y) release any Lien granted to or held by the Collateral Agent under the
Security Documents to the extent that such Lien covers such Northwest Assets
(which release shall be deemed to occur upon delivery of the aforementioned
termination statements to the Borrower); PROVIDED that (i) such sale shall be
solely for cash consideration in accordance with the terms of the Northwest
Asset Sale Agreement and (ii) the Borrower hereby agrees that the Cash Proceeds
of the Northwest Asset Sale, including Cash Proceeds the payment of which is
deferred, shall be applied, at Borrower's election, either (1) to repay the
Loans (and not reinvested) pursuant to Section 5.02(d) of the Amended Agreement
or (2) to the payment of the contingent liabilities specified in, and in an
aggregate amount not in excess of the total amount set forth in, the Northwest
Asset Sale Proceeds Schedule.
C. LIMITATION OF WAIVERS
The waivers and authorizations set forth above shall be limited
precisely as written and shall in no event (1) amend or constitute a waiver of
compliance by the Borrower with respect to (a) Section 5.02(d) or Section 9.02
of the Credit Agreement or the Amended Agreement (as the case may be) in any
other instance, (b) any other term, provision or condition of the Credit
Agreement or the Amended Agreement (as the case may be), (c) the other Credit
Documents, or (d) any other instrument or agreement referred to therein, or (2)
prejudice any right or remedy that the Administrative Agent or any Lender may
now have or may have in the future under or in connection with the Credit
Agreement, the other Credit Documents, any other instrument or agreement
referred to therein or under applicable law. Except as expressly set forth
herein, the terms, provisions and conditions of the Credit Agreement and the
other Credit Documents shall remain in full force and effect and in all other
respects are hereby ratified and confirmed.
D. ACKNOWLEDGMENT AND CONSENT
1. The Security Documents and the Credit Documents to which the
Borrower and other Credit Parties are party are herein referred to collectively
as the "CREDIT SUPPORT
DOCUMENTS". Each Credit Party (other than the Parent) which is party to this
Second Amendment (each a "CREDIT SUPPORT PARTY", and collectively, "CREDIT
SUPPORT PARTIES") hereby acknowledges that it has reviewed the terms and
provisions of the Credit Agreement and this Amendment. Each such Credit Support
Party hereby confirms that each Credit Support Document to which it is a party
or otherwise bound and all Collateral encumbered thereby will continue to
guaranty or secure, as the case may be, to the fullest extent set forth therein
the payment and performance of all "Guaranteed Obligations" and "Obligations" as
the case may be (in each case as such terms are defined in the applicable Credit
Support Document), including without limitation the payment and performance of
all such "Guaranteed Obligations" or "Obligations", as the case may be, in
respect of the Obligations of the Borrower now or hereafter existing under or in
respect of the Credit Agreement as amended by this Amendment (as so amended, the
"AMENDED AGREEMENT") and the Credit Documents. Each such Credit Support Party
acknowledges and agrees that any of the Credit Support Documents to which it is
a party or otherwise bound shall continue in full force and effect and that all
of its obligations thereunder shall be valid and enforceable and shall not be
impaired or limited by the execution or effectiveness of this Amendment. Each
Credit Support Party (other than the Borrower) acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Credit Document to consent to this Amendment, and (ii) nothing in
the Amended Agreement, this Amendment or any other Credit Document shall be
deemed to require the consent of such Credit Support Party to any future
consents or waivers to the Amended Agreement.
2. No Agent nor any Lender has or shall have, by reason of this
Amendment, the Credit Agreement or the other Credit Documents, a fiduciary
relationship in respect of the Borrower, any other Credit Party or Credit
Parties.
3. Each Credit Support Party hereby confirms, reaffirms and
acknowledges (i) that the Collateral Agent (for the benefit of the Secured
Creditors (as defined in each of the Credit Support Documents)) has a fully
perfected first Lien on, and security interest in, all right, title and interest
of such Credit Support Party in the Collateral, subject to no other Liens (other
than Permitted Liens) and (ii) the continuing validity and effectiveness of the
Collateral Agent's and Secured Creditors' rights under the Credit Documents and
applicable law.
4. Except as expressly set forth in this Amendment, each of the
undersigned hereby acknowledges and agrees that the execution and delivery by
any Agent and the Lenders of this Amendment shall not be deemed (i) to create a
course of dealing or otherwise obligate any Agent or the Lenders to forbear or
execute similar agreements under the same or similar circumstances in the
future, (ii) to modify, relinquish or impair any right of any Agent or the
Lenders to receive any indemnity or similar payment from, or exercise any rights
granted by, any Person or entity as a result of any matter arising from or
relating to this Amendment, (iii) to waive any right of the Lenders to receive
interest at an increased rate as a result of any Events of Default that may
occur under the Credit Agreement, (iv) to obligate any Agent or the Lenders in
any way to forbear from individually or collectively enforcing remedies under
the Credit Agreement in any manner or (v) a commitment from or of any Agent or
the Lenders to forbear or "stand still". Except as expressly set forth in this
Amendment, no past or future forbearance on the part of any of any Agent or the
Lenders should be viewed as a limitation upon or waiver of
the absolute right and privilege of any Agent or the Lenders in exercising
rights and remedies that currently exist or may exist after the Second Amendment
Effective Date.
E. ACKNOWLEDGMENT BY PARENT
The Parent hereby acknowledges and agrees that the execution, delivery
and effectiveness of this Amendment do not impair, limit or otherwise affect
adversely to the Lenders the Parent's obligations under the Amended and Restated
Preferred Stock Issuance and Capital Contribution Agreement.
F. MISCELLANEOUS PROVISIONS
1. In order to induce the Lenders to enter into this Amendment, the
Borrower hereby represents and warrants that (i) the representations and
warranties contained in the Credit Agreement and in the other Credit Documents
are true and correct in all material respects on and as of the Second Amendment
Effective Date (as defined below) (except with respect to any representations
and warranties limited by their terms to a specific date, which shall be true
and correct in all material respects as of such date) and (ii) there exists no
Default or Event of Default under the Credit Agreement on the Second Amendment
Effective Date (as defined below), in each case both before and after giving
effect to this Amendment.
2. This Amendment is limited as specified and shall not constitute an
amendment, modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document, and no waiver or amendment
contained herein shall be deemed to prejudice any right or remedy that any Agent
or Lender may now have or may have in the future under or in connection with the
Credit Agreement or any other agreement or instrument referred to therein. Each
of the Agents and Lenders hereby expressly reserves all such rights and
remedies.
3. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "SECOND
AMENDMENT EFFECTIVE DATE") when (i) the Borrower, the other Credit Parties and
the Required Lenders shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of
telecopier) the same to the Administrative Agent at the Notice Office and (ii)
the Borrower shall have delivered to the Lenders a schedule (which shall be
attached hereto as ANNEX A) in form and substance reasonably satisfactory to
Required Lenders setting forth the Borrower's proposed uses for proceeds from
the sale of the Northwest Assets.
6. The Borrower acknowledges that all reasonable out-of-pocket costs
and expenses as described in Section 12.01 of the Credit Agreement incurred by
the Agents (including, without limitation, the reasonable fees and disbursements
of O'Melveny & Xxxxx LLP) with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of the Borrower.
7. From and after the Second Amendment Effective Date, all references
in the Amended Agreement and in the other Credit Documents to the Credit
Agreement shall be deemed to be references to the Amended Agreement.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, each of the parties hereto has caused this Amendment to
be duly executed and delivered as of the date first above written.
CREDIT PARTIES: FAIRPOINT COMMUNICATIONS
SOLUTIONS CORP.
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President & CFO
FAIRPOINT COMMUNICATIONS
SOLUTIONS CORP. - NEW YORK
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President & CFO
FAIRPOINT COMMUNICATIONS
SOLUTIONS CORP. - VIRGINIA
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President & CFO
FAIRPOINT SOLUTIONS CAPITAL,
LLC
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President & CFO
FAIRPOINT COMMUNICATIONS, INC. (for
purposes of Section E only)
By: /s/ Xxxxxx X. Xxxxx, Xx.
---------------------------
Name: Xxxxxx X. Xxxxx, Xx.
Title: Senior Vice President & CFO
S-1
LENDERS: BANK OF AMERICA, N.A.
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Principal
BANKERS TRUST COMPANY
By: /s/ Xxxx Xxxxxx
------------------
Name: Xxxx Xxxxxx
Title: Director
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------
Name: Xxxxxxxx X. Xxxxxxxxx
Title: Sr. Vice President
CITICORP USA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Sr. Vice President
DLJ CAPITAL FUNDING, INC.
By:
------------------------------
Name:
Title:
COBANK, ACB
By:
------------------------------
Name:
Title:
S-2
CIT GROUP/EQUIPMENT FINANCING, INC.
By:
------------------------------
Name:
Title:
S-3
ANNEX A
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