EXHIBIT 10.26
AMENDMENT NO. 4 TO AMENDED AND RESTATED CREDIT AGREEMENT AMONG IPC INFORMATION
SYSTEMS, INC., AS PARENT BORROWER, IPC FUNDING CORP., AS SUB BORROWER, IPC
COMMUNICATIONS, INC., AS A LOAN PARTY, THE LENDERS SIGNATORY THERETO, AS
LENDERS, GENERAL ELECTRIC CAPITAL CORPORATION, AS ISSUING BANK, COLLATERAL
AGENT, ADMINISTRATIVE AGENT AND LENDER, AND FIRST UNION CAPITAL MARKETS, INC.,
AS DOCUMENTATION AGENT
This Amendment No. 4 to Amended and Restated Credit Agreement, dated
as of December 1, 1999 and effective as of September 30, 1999 (this
"Amendment"), is entered into by and among IPC Information Systems, Inc., a
Delaware corporation (the "Parent Borrower"); IPC Funding Corp., a Delaware
corporation (the "Sub Borrower"); IPC Communications, Inc., a Delaware
corporation ("Holdings"), as a Loan Party; General Electric Capital Corporation,
as a Lender, and as Collateral Agent, Issuing Bank and Administrative Agent (the
"Administrative Agent") for the Lender Parties; and the other Lenders.
RECITALS
A. Borrowers, Holdings, the Administrative Agent, the Lenders and
First Union Capital Markets, Inc., as Documentation Agent, are parties to that
certain Amended and Restated Credit Agreement, dated as of June 21, 1999 (as
amended by Amendment No. 1 thereto, dated as of July 1, 1999, Amendment No. 2
thereto, dated as of August 12, 1999, and Amendment No.3 thereto, dated as of
September 24, 1999, the "Credit Agreement").
B. Borrowers, Holdings, the Administrative Agent and the Lenders are
desirous of amending certain sections of, and making certain other changes to
the Credit Agreement, as and to the extent set forth in this Amendment and
subject to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and of the loans or other extensions of credit
heretofore, now or hereafter made to, or for the benefit of, Borrowers by
Lenders, Borrowers, Holdings, the Administrative Agent and Lenders hereby agree
as follows:
1. Definitions. Except to the extent otherwise specified herein, capitalized
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terms used in this Amendment shall have the same meanings ascribed to them in
the Credit Agreement.
2. Amendments and Covenants.
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2.1. Section 5.04(c) of the Credit Agreement is hereby amended by deleting
the ratio "6.60:1.00" that appears opposite the date "September 30, 1999" and
replacing it with the ratio "7.70 :1.00".
2.2. Section 5.04(d) of the Credit Agreement is hereby amended by deleting
the ratio "1.28:1.00" that appears opposite the date "September 30, 1999" and
replacing it with the ratio "1.07 :1.00".
2.3 The Parent Borrower shall maintain as at the end of October 31,1999,
EBITDA of not less than $36,000,000 for the trailing twelve month period then
ended.
2.4 The Parent Borrower shall maintain as at the end of October 31, 1999 a
ratio of Consolidated EBITDA to cash interest payable on all Debt of the Parent
Borrower and its Subsidiaries, for the trailing twelve month period ending
October 31, 1999, of not less than 4.00:1.00.
2.5 The Parent Borrower shall maintain as at the end of October 31, 1999 a
Leverage Ratio of the Parent Borrower and its Subsidiaries, for the trailing
twelve month period ending October 31, 1999, of not more than 6.60:1.00.
2.6 The Parent Borrower shall maintain as at the end of October 31, 1999 a
ratio of (i) EBITDA for the trailing twelve month period of the Parent Borrower
and its Subsidiaries, less Capital Expenditures made by the Parent Borrower and
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its Subsidiaries during such period, other than (x) Capital Expenditures to the
extent financed by Capitalized Leases (but only to the extent so financed and
not paid in cash), (y) Capital Expenditures to the extent financed by purchase
money indebtedness (but only to the extent so financed and not paid in cash) and
(z) Capital Expenditures made by IXnet and its Subsidiaries out of the IPO Net
Cash Proceeds (but only to the extent so made out of the IPO Net Cash Proceeds)
(in the case of (x), (y) and (z) only to the extent that such transactions are
permitted by, and its compliance with, the terms and conditions of this
Agreement), less the aggregate amount of federal, state, local and foreign
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income taxes paid by the Parent Borrower and its Subsidiaries in cash during
such period, other than (x) various foreign income taxes paid by Foreign
Subsidiaries to the extent that such foreign income taxes do not in the
aggregate exceed $1,000,000 during such period, (y) the payment by IPC UK in
June 1999 of certain foreign income taxes in the aggregate amount of
approximately (Pounds)4,200,000 and (z) the payment by IPC UK in July 1999 of
the ACT (Advance Corporation Tax) in the aggregate amount of approximately
(Pounds)5,625,000, less cash dividends paid by the Parent Borrower to the holder
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of its common stock (i.e. Holdings) during such period to the extent that the
Parent Borrower is expressly permitted to pay such dividends under this
Agreement, to the (ii) sum of (x) cash interest payable by the Parent Borrower
and its Subsidiaries on all Debt during such period plus (y) principal amounts
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of all Debt payable by the Parent Borrower and its Subsidiaries during such
twelve month period ending October 31, 1999, of not less than 1.28:1.00 for such
period ending October 31, 1999.
2.7 The Parent Borrower shall furnish to the Lender Parties and the Agents
no later than December 15, 1999, monthly financial statements as at and for the
twelve month period ended October 31, 1999, including balance sheets, statements
of income and statements of cash flows, which shall be prepared in a manner
consistent with the quarterly financial statements required under Section 5.03
of the Credit Agreement, shall be certified by the chief financial officer of
Holdings and the Parent Borrower in a manner consistent with the certification
of the quarterly financial statements required under Section 5.03, shall
demonstrate compliance with each of the financial covenants set forth in
Sections 2.3 through 2.5, inclusive, of this Amendment and shall otherwise be in
form and substance acceptable to the Administrative Agent and Lenders.
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2.8 The failure to perform or observe any of the covenants or agreements
contained in Sections 2.3 through 2.6, inclusive, of this Amendment shall
constitute an immediate "Event of Default" under the Credit Agreement, as and to
the same extent as if such failure to perform or observe any of such covenants
or agreements was an "Event of Default" under Section 6.01 (c) of the Credit
Agreement.
3. Acknowledgment and Consent of Guarantors. Each Guarantor hereby consents
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to this Amendment and hereby confirms and agrees that (a) notwithstanding the
effectiveness of this Amendment or any of the other prior amendments comprising
part of the Credit Agreement, the Guaranty and each other Loan Document to which
it is a party is, and shall continue to be, in full force and effect and is
hereby ratified and confirmed in all respects, and (b) the Collateral Documents
to which such Guarantor 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).
4. Conditions Precedent to Amendment. This Amendment shall be effective upon
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satisfaction of each of the following conditions precedent:
4.1. This Amendment shall have been duly executed and delivered by each of
the Borrowers, Holdings, the Guarantors, the Administrative Agent and Required
Lenders.
4.2. The Parent Borrower shall have paid an amendment fee in an amount
equal to $65,000 to the Administrative Agent, for the pro rata account of each
Lender that timely executes and delivers its signature page evidencing its
agreement to this Amendment.
4.3. All of the representations and warranties contained in the Credit
Agreement and any other documents executed in connection therewith are true and
correct on and as of the date hereof as though made on the date hereof.
5. Reference to and Effect Upon the Credit Agreement and other Loan
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Agreements.
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5.1. Except as specifically amended in Section 2, the Credit Agreement, the
Notes and each other Loan Document shall remain in full force and effect and
each is hereby ratified and confirmed.
5.2. The execution, delivery and effect of this Amendment shall be limited
precisely as written and shall not be deemed to (i) be a consent to any waiver
of any term or condition, or to any amendment or modification of any term or
condition (except as specifically amended in Section 2), of the Credit Agreement
or any other Loan Document or (ii) prejudice any right, power or remedy which
any Agent or any Lender now has or may have in the future under or in connection
with the Credit Agreement, the Notes or any other Loan Document. Each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
any other word or words of similar import shall mean and be a reference to the
Credit Agreement as amended hereby, and each reference in any other Loan
Document to the Credit Agreement or any word or words of similar import shall be
and mean a reference to the Credit Agreement as amended hereby.
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6. Counterparts. This Amendment may be executed in any number of
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counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall constitute one and the same instrument. Delivery of an
executed counterpart by facsimile shall be as effective as delivery of a
manually signed original counterpart.
7. Costs and Expenses. As provided in Section 8.04 of the Credit Agreement,
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Borrowers shall pay the fees, costs and expenses incurred by the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment (including, without limitation, attorneys' fees).
8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAW PROVISIONS) OF
THE STATE OF NEW YORK.
9. Headings. Section headings in this Amendment are included herein for
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convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
[Signature Pages Follow]
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IN WITNESS WHEREOF, this Amendment No. 4 to Amended and Restated
Credit Agreement has been duly executed as of the date first written above.
IPC INFORMATION SYSTEMS, INC.,
as Parent Borrower
By: _________________________
Title:_______________________
IPC FUNDING CORP.,
as Sub Borrower
By:__________________________
Title:_______________________
IPC COMMUNICATIONS, INC.,
as a Loan Party
By:__________________________
Title:_______________________
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, Collateral Agent,
Issuing Bank and Lender
By:__________________________
Title:_______________________
FIRST UNION NATIONAL BANK,
as a Lender
By: _________________________
Title: ______________________
GMAC COMMERCIAL CREDIT LLC,
as a Lender
By: _________________________
Title:_______________________
INTERNATIONAL EXCHANGE NETWORKS, LTD., as a
Guarantor
By: _________________________
Title:_______________________
INTERNATIONAL EXCHANGE NETWORK CORP., as a
Guarantor
By: _________________________
Title:________________________
HNG CORP., as a Guarantor
By: _________________________
Title:________________________
V BAND CORPORATION, as a Guarantor
By: _________________________
Title:________________________
IXNET, INC., as a Guarantor
By: _________________________
Title:________________________
IPC INFORMATION SYSTEMS FAR EAST INC., as a
Guarantor
By: _________________________
Title:________________________
MXNET INC., as a Guarantor
By: _________________________
Title:________________________
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IPC INFORMATION SYSTEMS ASIA PACIFIC, LIMITED,
as a Guarantor
By: _________________________
Title:________________________
IPC INFORMATION SYSTEMS CANADA, INC., as a
Guarantor
By: _________________________
Title:________________________
IXNET UK LIMITED, as a Guarantor
By: _________________________
Title:________________________
IPC INFORMATION SYSTEMS, as a Guarantor
By: _________________________
Title:________________________
IPC UK HOLDINGS, LTD., as a Guarantor
By: _________________________
Title:________________________
IPC UK SPC LIMITED, as a Guarantor
By: _________________________
Title:________________________
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SATURN GLOBAL NETWORK SERVICES HOLDINGS
LIMITED, as a Guarantor
By: _________________________
Title:________________________
IXNET AUSTRALIA PTY LIMITED, as a Guarantor
By: _________________________
Title:________________________
IXNET HONG KONG LIMITED (f/k/a Saturn Global
Network Services (Hong Kong) Limited), as a
Guarantor
By: _________________________
Title:________________________
SATURN GLOBAL NETWORK SERVICES (JAPAN) LTD., as
a Guarantor
By: _________________________
Title:________________________
SATURN GLOBAL NETWORK SERVICES (SINGAPORE) PTE
LTD., as a Guarantor
By: _________________________
Title:________________________
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