FIRST AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.5
Execution Version
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of September 13,
2010, by and among ZAYO GROUP, LLC, a Delaware limited liability company (“Zayo”), ZAYO
CAPITAL, INC., a Delaware corporation (“Zayo Capital”; and together with Zayo, each,
individually as a “Borrower” and, collectively, as the “Borrowers “), the Guarantors (as
defined below) signatory hereto, the Lenders (as defined below) signatory hereto and SUNTRUST BANK,
in its capacity as administrative agent for the Lenders (the “Administrative Agent”).
WITNESSETH:
WHEREAS, the Borrowers, the Persons party thereto from time to time as Guarantors (the
“Guarantors”), the financial institutions party thereto from time to time (the
“Lenders”), SunTrust Bank, as the Issuing Bank, SunTrust Bank, as the Collateral Agent,
and the Administrative Agent are parties to that certain Credit Agreement, dated as of March 12,
2010 (as amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Credit Agreement), pursuant to which the
Lenders have made certain financial accommodations available to the Borrowers; and
WHEREAS, the Borrowers have requested that the Lenders and the Administrative Agent amend
certain provisions of the Credit Agreement as set forth herein, including, without limitation, to
increase the Revolving Loan Commitment by $25,000,000 (such increased portion of the Revolving Loan
Commitment, the “Incremental Commitment”) to $100,000,000 and to increase the Commitment
Increase Cap to $50,000,000, in each case, as of the date hereof, and subject to the terms and
conditions hereof, the Lenders and the Administrative Agent are willing to do so;
NOW THEREFORE, in consideration of the premises, the terms and conditions contained herein and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Amendments to Credit Agreement.
(a) Section 1.1 of the Credit Agreement, “Definitions”, is hereby amended and modified by
deleting the definitions of “Annualized EBITDA”, “OFAC”, “Revolving Loan Commitment”, “Sanctioned
Country” and “Sanctioned Person” in their entirety and inserting the following in lieu thereof:
““Annualized EBITDA” shall mean, with respect to the Borrowers and their
Subsidiaries for any period, EBITDA for the most recent fiscal quarter then
ended, multiplied by 4.
“OFAC” shall mean the Office of Foreign Assets Control o f the United
States Department of the Treasury, or any successor agency.
“Revolving Loan Commitment” shall mean the several obligations
of the Lenders to advance the aggregate amount of up to $100,000,000 to the
Borrowers on or after the Agreement Date, in accordance with their
respective Revolving Commitment Ratios, pursuant to the terms of this
Agreement, as such amount may be reduced from time to time pursuant to the
terms of this Agreement or increased pursuant to Section 2.17.
“Sanctioned Country” shall mean a country subject to a sanctions
program identified on the list maintained by OFAC and available at
xxxx://xxx.xxxxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxxxxxxx/, as amended or as
otherwise published from time to time.
“Sanctioned Person” shall mean (i) a Person named on the list of
“Specially Designated Nationals and Blocked Persons” or any similar list,
maintained by OFAC and available at
xxxx://xxx.xxxxxxx.xxx/xxxxxxx/xxxxxxxxxxx/xxxx/xxx/, as amended or as
otherwise published from time to time, or (ii) (A) an agency of the
government of a Sanctioned Country, (B) an organization Controlled by a
Sanctioned Country, or (C) a person resident in a Sanctioned Country, to the
extent subject to a sanctions program administered by OFAC.”
(b) Section 1.1 of the Credit Agreement, “Definitions”, is hereby further amended and modified
by deleting clause (p) of the definition of “Permitted Liens” in its entirety and inserting the
following in lieu thereof:
“(p) Liens securing Permitted Secured Indebtedness;”
(c) Section 1.1 of the Credit Agreement, “Definitions”, is hereby further amended by deleting
the definition of “Permitted Se cured Acquisition Indebtedness” in its entirety.
(d) Section 1.1 of the Credit Agreement, “Definitions”, is hereby further amended and modified
by inserting the following new definition in the appropriate alphabetical order:
“Permitted Secured Indebtedness” shall mean Funded Debt permitted by
Section 8.1, the proceeds of which may be used to support an
acquisitionor merger permitted by Section 8.7(c) or
Section 8.7(d), which Funded Debt may be secured equally and ratably
on a first-lien basis with the Obligations by Liens on the Collateral.”
(e) Section 2.17(a) of the Credit Agreement, “Increase of the Revolving Loan Commitment”, is
hereby amended and modified by xxxx xxxx the reference to “$25,000,000” and inserting “$50,000,000”
in lieu thereof.
(f) Section 8.1 of the Credit Agreement, “Funded Debt”, is hereby amended and modified by
deleting subsection (q) in its entirety and inserting the following in lieu thereof:
“(q) Permitted Secured Indebtedness in an aggregate amount outstanding at
any time not to exceed $125,000,000, none of which may be incurred unless,
at the time of incurrence, the Senior Secured Leverage Ratio for most recent
fiscal quarter then ended is no greater, calculated on a Pro Forma Basis,
than 3.50 to 1.00.”
(g) Section 9.1 of the Credit Agreement, “Events of Default”, is hereby amended and modified
by deleting subsection (c) in its entirety and inserting the following in lieu thereof:
“(c) Any Borrower Party shall default in the performance or observance of
any agreement or covenant contained in Sections 2.12, 6.1,
6.5, 6.7, 6.10, 6.15, 6.20 or in Article
7 or Article 8 or any material (as determined by
Administrative Agent in its Permitted Discretion) agreement or covenant in
any Security Document (other than any Mortgage);”
(h) Section 9.1 of the Credit Agreement, “Events of Default”, is hereby amended and modified
by deleting the phrase “(other than this Agreement or the Security Documents or as otherwise
provided in this Section 9.1)” from subsection (e) and inserting the phrase “(other than
this Agreement or the Security Documents (but only to the extent constituting an Event of Default
under clause (c) above) or as otherwise provided in this Section 9.1)” in lieu
thereof.
(i) Section 11.12 of the Credit Agreement, “Amendments and Waivers”, is hereby amended and
modified by deleting the phrase “(i) the consent of each of the Lenders” and inserting the phrase
“(i) the consent of each of the Lenders (or in the case of clause (C) and clause (E), each of the
affected Lenders)” in lieu thereof.
(j) Schedule 1.1(a) to the Credit Agreement, “Commitment Ratios”, is hereby amended and
modified by deleting such Schedule 1.1(a) in its entirety and by substituting the attached
Schedule 1.1(a) in lieu thereof.
2. Additional Agreement. Each party hereto agrees and consents to the amendment of the Intercreditor Agreement as contemplated by Exhibit A hereto, “Joinder and Amendment
Agreement”, and each Lender directs the Administrative Agent to execute such Joinder and Amendment
Agreement and to take all actions incidental thereto.
3. No Other Amendments. The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided above, operate as a waiver of any right,
power or remedy of the Administrative Agent, the Lenders or the Issuing Bank under the Credit
Agreement or any of the other Loan Documents, nor constitute a waiver of any provision of the
Credit Agreement or any of the other Loan Documents. Except for the amendment set forth above, the
text of the Credit Agreement and all other Loan Documents shall remain unchanged and in full force
and effect and each Borrower hereby ratifies and confirms its obligations thereunder. This
Amendment shall not constitute a modification of the Credit Agreement or a
course of dealing with the Administrative Agent, the Lenders or the Issuing Bank at variance
with the Credit Agreement such as to require further notice by the Administrative Agent, the
Lenders or the Issuing Bank to require strict compliance with the terms of the Credit Agreement and
the other Loan Documents in the future. Nothing in this Amendment is intended, or shall be
construed, to constitute a novation or an accord and satisfaction of any of the Obligations or to
modify, affect or impair the perfection or continuity of the Administrative Agent’s or the Lenders’
security interests in, security titles to, or other Liens on, any Collateral for the Obligations.
4. Conditions on Effectiveness. This Amendment shall become effective as of the date
hereof when, and only when, the Administrative Agent, on behalf of the Issuing Bank and the
Lenders, shall have received:
(a) counterparts of this Amendment duly executed by the Borrowers, the Guarantors and the
Lenders;
(b) for the account of the Lenders, an incremental commitment fee from the Borrowers in an
amount equal to 1.00% of each Lender’s portion of the Incremental Commitment, which shall be fully
earned, non-refundable and due and payable on the date hereof in immediately available funds;
(c) counterparts of that certain First Amendment Fee Letter, dated as of the date hereof, duly
executed by the Borrowers, and evidence satisfactory to Administrative Agent that all amounts
payable thereunder have been paid by the Borrowers or duly charged to the Loan Account; and
(d) such other information, documents, instruments or approvals as the Administrative Agent
may require.
5. Condition Subsequent. The Borrowers shall deliver to the Administrative Agent the legal opinion of counsel to the Borrower Parties customary for such transactions and in
form and substance satisfactory to the Administrative Agent, addressed to the Lender Group, on or
before the date which is the earlier of (i) the issuance of an additional amount of Senior Note
Indebtedness on or after the date hereof and (ii) September 30, 2010; and the failure by the
Borrowers to so perform provide such legal opinion shall constitute an immediate Event of Default;
6. Representations and Warranties. Each Borrower Party hereby represents and warrants that all representations and warranties of the Borrower Parties made in the Credit
Agreement and the other Loan Documents are true and correct in all material respects (unless any
such representation or warranty is qualified as to materiality, in which case such representation
and warranty shall be true and correct in all respects) as of the date hereof, both before and
immediately after giving effect to this Amendment (except to the extent that such representation or
warranty specifically refers to an earlier date, in which case it shall be so true and correct as
of such earlier date). Each Borrower Party further represents and warrants as follows:
(a) such Borrower Party is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) the execution, delivery and performance by such Borrower Party of this Amendment and the
Loan Documents are within such Borrower Party’s legal powers, have been duly authorized by all
necessary company action and do not contravene (i) such Borrower Party’s organizational documents,
or (ii) law or contractual restrictions binding on or affecting such Borrower Party;
(c) no authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body, is required for the due execution, delivery and
performance by such Borrower Party of this Amendment or any of the Loan Documents to which such
Borrower Party is or will be a party;
(d) this Amendment and each of the other Loan Documents to which such Borrower Party is a
party constitute legal, valid and binding obligations of such Borrower Party, enforceable against
such Borrower Party in accordance with their respective terms; and
(e) No Default or Event of Default exists.
7. Acknowledgment of Security Interests. Each Borrower Party hereby acknowledges that,
as of the date hereof, the security interests and liens granted to the Administrative Agent and the
Lenders under the Credit Agreement and the other Loan Documents are in full force and effect and
are enforceable in accordance with the terms of the Credit Agreement and the other Loan Documents.
8. Reaffirmation of Guaranty. Each Guarantor hereby specifically (a) acknowledges and reaffirms its obligations owing to the Lender Group under the Credit Agreement and any
other Loan Documents to which each such Guarantor is a party and (b) agrees that each of the Loan
Documents to which it is a party is and shall remain in full force and effect.
9. Costs, Expenses and Taxes. Each Borrower agrees, jointly and severally, to pay on demand all out-of-pocket expenses of the Administrative Agent in connection with the
preparation, negotiation, execution and delivery of this Amendment, including, but not limited to,
the reasonable fees and disbursements of counsel for the Administrative Agent.
10. Governing Law. This Amendment shall be construed in accordance with and governed by the laws of the State of New York.
11. Loan Document. This Amendment shall be deemed to be a Loan Document
for all purposes.
12. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate counterparts shall
together constitute but one and the same instrument. In proving this Amendment in any judicial
proceeding, it shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought. Any signatures delivered by a party by
facsimile or other electronic transmission shall be deemed an original signature hereto.
13. Release. In consideration for the accommodations provided pursuant to this
Amendment, and acknowledging that the Administrative Agent and Lenders will be specifically relying
on the following provisions as a material inducement in entering into this Amendment, and for other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, each
Borrower Party hereby releases, remises and forever discharges the Administrative Agent and the
Lenders and their respective agents, servants, employees, directors, officers, attorneys,
accountants, consultants, affiliates, representatives, receivers, trustees, subsidiaries,
predecessors, successors and assigns (collectively, the “Released Parties”) from any and
all claims, damages, losses, demands, liabilities, obligations, actions and causes of action
whatsoever (whether arising in contract or in tort, and whether at law or in equity), whether known
or unknown, matured or contingent, liquidated or unliquidated, in any way arising from, in
connection with, or in any way concerning or relating to the Credit Agreement, the other Loan
Documents, and/or any dealings with any of the Released Parties in connection with the transactions
contemplated by such documents or this Amendment prior to date hereof. This release shall be and
remain in full force and effect notwithstanding the discovery by each Borrower Party after the date
hereof (a) of any new or additional claim against any Released Party, (b) of any new or additional
facts in any way relating to the subject matter of this release,
(c) that any fact relied upon by it was incorrect or (d) that any representation made by any
Released Party was untrue or that any Released Party concealed any fact, circumstance or claim
relevant to such Borrower’s execution of this release; provided, however, this
release shall not extend to any claims arising after the execution of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by
their respective authorized officers as of the day and year first above written.
| BORROWERS: | ZAYO GROUP, LLC ZAYO CAPITAL, INC |
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| By: | /s/ Xxx xxxXxxxxxxx | |||
| Name: | Xxx xxxXxxxxxxx | |||
| Title: | Chief Financial Officer | |||
First Amendment to Credit Agreement
| GUARANTORS: |
ZAYO ENTERPRISE NETWORKS, LLC ZAYO BANDWIDTH, LLC ZAYO COLOCATION, INC. ZAYO BANDWIDTH TENNESSEE, LLC ADESTA COMMUNICATIONS, INC. FIBERNET TELECOM, INC. LOCAL FIBER, LLC ZAYO FIBER SOLUTIONS, LLC |
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| By: | /s/ Xxx xxxXxxxxxxx | |||
| Name: | Xxx xxxXxxxxxxx | |||
| Title: | Chief Financial Officer | |||
First Amendment to Credit Agreement
| AGENT AND LENDERS: | SUNTRUST BANK, as the Administrative Agent and as a Lender |
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| By: | /s/ Xxxxxxx Xxxx | |||
| Name: | XXXXXXX XXXX | |||
| Title: | DIRECTOR | |||
First Amendment to Credit Agreement
| XXXXXX XXXXXXX BANK, N.A., as a Lender |
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| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Authorized Signatory | |||
First Amendment to Credit Agreement
| ROYAL BANK OF CANADA, as a Lender |
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| By: | /s/ Xxxxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxxxx | |||
| Title: | Authorized Signatory | |||
First Amendment to Credit Agreement
| BARCLAYS BANK PLC, as a Lender |
||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Name: | Xxxxx Xxxxxx | |||
| Title: | Vice President | |||
First Amendment to Credit Agreement
| COBANK ACB, as a Lender |
||||
| By: | /s/ Xxx Xxxxxxx | |||
| Name: | Xxx Xxxxxxx | |||
| Title: | Managing Director | |||
First Amendment to Credit Agreement
| OPY CREDIT CORP., as a Lender |
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| By: | /s/ Xxxxx X. Xxxxxx | |||
| Name: | Xxxxx X. Xxxxxx | |||
| Title: | Managing Director | |||
First Amendment to Credit Agreement
Schedule 1.1(a)
Commitment Ratios
| Revolving Loan | Aggregate Commitment | |||||||
| Lender | Commitment | Ratio | ||||||
SunTrust Bank |
$ | 27,500,000 | 27.5000000 | % | ||||
Xxxxxx Xxxxxxx Bank, N.A. |
$ | 25,000,000 | 25.0000000 | % | ||||
Royal Bank of Canada |
$ | 27,500,000 | 27.0000000 | % | ||||
Barclays Bank PLC |
$ | 6,666,667 | 6.0000000 | % | ||||
CoBank, ACB |
$ | 6,666,666 | 6.6666666 | % | ||||
OPY Credit Corp. |
$ | 6,666,667 | 6.6666667 | % | ||||
Totals |
$ | 100,000,000 | 100.000000 | % | ||||
Exhibit A
Joinder Agreement
(attached)
