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Exhibit 10.14.1
NET2000 COMMUNICATIONS GROUP, INC.
FIRST AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT AND ASSIGNMENT AGREEMENT
This FIRST AMENDMENT dated as of December 23, 1999 to the AMENDED AND
RESTATED CREDIT AGREEMENT dated as of July 30, 1999 (such agreement as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT")
and ASSIGNMENT AGREEMENT (this "FIRST AMENDMENT") is entered into by and among
NET2000 COMMUNICATIONS GROUP, INC. (the "BORROWER"), a Delaware corporation,
NORTEL NETWORKS INC. ("NORTEL NETWORKS"), a Delaware corporation, each of the
Credit Support Parties (as defined in Section 8 of this First Amendment) which
is a party hereto, each of the lending entities purchasing an assignment in the
Credit Agreement pursuant hereto (individually, a "LENDER" and, collectively,
the "LENDERS"), XXXXXXX XXXXX CREDIT PARTNERS L.P. ("GSCP"), as a Joint Lead
Arranger and Syndication Agent (in such capacity, the "SYNDICATION AGENT"), TD
SECURITIES (USA) INC. ("TDSI"), as the Joint Lead Arranger and Book Manager (in
such capacity, the "BOOK MANAGER") and TORONTO DOMINION (TEXAS), INC. ("TD") as
Administrative Agent (together with its permitted successors in such capacity,
the "ADMINISTRATIVE AGENT"). Capitalized terms used herein without definition
shall have the same meanings herein as set forth in the Credit Agreement and in
the amendments contained in Section 1 hereof.
RECITALS
WHEREAS, Borrower and Nortel Networks are parties to the Credit
Agreement, pursuant to which Nortel Networks has extended certain credit
facilities to Borrower;
WHEREAS, Nortel Networks desires to assign its rights and obligations
under the Credit Agreement to GSCP and TD and GSCP and TD desire to purchase
from Nortel Networks such rights and obligations (such transactions, the
"ASSIGNMENT"); and
WHEREAS, in order to facilitate the Assignment, Borrower and Nortel
Networks desire to amend the Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
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SECTION 1. AMENDMENTS TO CREDIT AGREEMENT
1.1 AMENDMENTS TO ARTICLE 1
A. Section 1.1 of the Credit Agreement is hereby amended by
deleting the definitions of "Administrative Agent," "Administrative Agent's
Letter," "Material Contracts," "Principal Office," "Reference Bank," "Required
Lenders" and "Total Debt" in their entirety and substituting therefor the
following:
"ADMINISTRATIVE AGENT" means, prior to the First Amendment
Effective Date, Nortel Networks, in such capacity, and on and after the First
Amendment Effective Date, Toronto Dominion (Texas), Inc., in such capacity.
"ADMINISTRATIVE AGENT'S LETTER" means that certain letter
agreement dated as of December 23, 0000, xxxxxxx Xxxxxxx Xxxxxxxx (Xxxxx), Inc.,
as Administrative Agent, and the Borrower.
"MATERIAL CONTRACTS" means the Master Purchase Agreement and, as
to any Loan Party, any supply, purchase, service, employment, tax, indemnity,
shareholder or other agreement or contract for which the aggregate amount or
value of services performed or to be performed for or by, or funds or other
Property transferred or to be transferred to or by, any Loan Party to such
agreement or contract, or by which any Loan Party or any of its Properties is
otherwise bound, during any fiscal year of the Borrower exceeds $2,000,000 (or
the equivalent amount in any currency) and any and all amendments,
modifications, supplements, renewals or restatements thereof.
"PRINCIPAL OFFICE" means, prior to the First Amendment Effective
Date, the principal office of the Administrative Agent in Richardson, Texas,
presently located at 0000 Xxxxxxxx Xxxx., Xxxxxxxxxx, Xxxxx 00000 and, on and
after the First Amendment Effective Date, the principal office of the
Administrative Agent in Houston, Texas, presently located at 000 Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000.
"REFERENCE BANK" means Toronto Dominion (Texas), Inc.
"REQUIRED LENDERS" means (i) as of the First Amendment Effective
Date and prior to the completion of a successful syndication of the Loans (as
determined by GSCP and TD in their reasonable judgement), GSCP and Lenders,
together with GSCP, holding at least two-thirds (in Dollar amount) of the sum of
(a) the aggregate outstanding principal amount of the Loans, plus (b) the
aggregate amount of the outstanding Commitments and (ii) at any date of
determination other than as specified in clause (i), Lenders holding at least
two-thirds (in Dollar
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amount) of the sum of (a) the aggregate outstanding principal amount of the
Loans, plus (b) the aggregate amount of the outstanding Commitments
"SECURED DEBT" means, at any particular time, that portion of
Total Debt the payment of which is secured or assured by any Lien or negative
pledge or other similar preferential treatment; provided, however, that solely
for purposes of calculating the ratio of Secured Debt to Total Capitalization
under this Agreement at any time during the period commencing on the First
Amendment Effective Date and ending on January 7, 2000, the amount of the Loans
made to the Borrower on the First Amendment Effective Date in accordance with
Section 2.1(a) shall be excluded from the calculation of Secured Debt.
B. Section 1.1 of the Credit Agreement is hereby further amended by
adding the following definitions in appropriate alphabetical order:
"AMENDED AGREEMENT" means this Agreement as amended by the First
Amendment.
"BOOK MANAGER" has the meaning assigned to that term in the
introductory paragraph to the First Amendment.
"CONTRIBUTION AGREEMENT" means that certain Contribution
Agreement, dated as of December 23, 1999, by and among NCI, NCH and the
Borrower.
"FIRST AMENDMENT" means that certain First Amendment and
Assignment Agreement, dated as of December 23, 1999, by and among Borrower,
Nortel Networks, the Credit Support Parties named therein, the Lenders party
thereto, the Syndication Agent named therein, the Book Manager named therein and
the Administrative Agent named therein.
"FIRST AMENDMENT EFFECTIVE DATE" means the "First Amendment
Effective Date" as such term is defined in the First Amendment.
"FIRST SUPPLEMENTAL INDENTURE" means that certain First
Supplemental Indenture, dated as of December 23, 1999, by and between NCI and
Allfirst Trust Company, National Association, which supplements and amends the
Senior Notes Indenture.
"GSCP" means Xxxxxxx Xxxxx Credit Partners L.P.
"IPO" has the meaning assigned to that term in the Securities
Purchase Agreement as in effect on the First Amendment Effective Date.
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"LETTER AGREEMENT" means that certain Letter Agreement, dated as
of December 23, 1999, from Toronto Dominion (Texas), Inc., as Administrative
Agent, to Borrower regarding certain post-closing matters.
"SECURITIES PURCHASE AMENDMENT" means that certain First
Amendment to the Securities Purchase Agreement, dated as of December 23, 1999,
by and among the Borrower and Nortel Networks.
"SYNDICATION AGENT" has the meaning assigned to that term in the
introductory paragraph to the First Amendment.
C. Section 1.1 of the Credit Agreement is hereby further amended
with respect to the definition of "Obligations" by inserting the words "or their
Affiliates" after the words " and the Lenders" in clause (a) and by inserting
the words "or Affiliate" after the words "with any Lender" in clause (b).
D. Section 1.1 of the Credit Agreement is hereby further amended
with respect to the definition of "Permitted Liens" by deleting clause (i) in
its entirety, deleting the word "and" from the end of clause (h) and inserting
the word "and" at the end of clause (g).
1.2 AMENDMENTS TO ARTICLE 2
A. Section 2.1(a) is hereby amended by inserting the following
sentence at the end of such Section:
"Notwithstanding the foregoing, Lenders shall not be required to
make any Loans to the Borrower at any time during the period commencing on the
First Amendment Effective Date and ending on January 5, 2000; provided, however,
that, so long as the First Amendment Effective Date occurs on or prior to
December 23, 1999, subject to the terms and conditions of this Agreement
(including, without limitation, Section 2.13(a)), each Lender severally agrees,
if requested, to make one Loan to the Borrower on the First Amendment Effective
Date, immediately after giving effect to the First Amendment, in an amount (i)
not to exceed the unused portion of such Lender's Commitment at such time and
(ii) not to exceed $7.5 million in the aggregate for all of the Lenders."
B. Section 2.10(a) is hereby amended by inserting the following
sentence at the end of such Section:
"Notwithstanding the foregoing, the Borrower agrees that all of
the proceeds of the Loans made to the Borrower on the First Amendment Effective
Date in accordance with Section 2.1(a) shall be used for general corporate
purposes of the Borrower."
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C. Section 2.11(b) shall be amended to read in its entirety as
follows:
"(b) Subject to Section 12.12, the Borrower agrees to pay to the
Administrative Agent such additional fees as are specified in the Administrative
Agent's Letter, which fees shall be payable in such amounts and on such dates as
are specified therein."
1.3 AMENDMENTS TO ARTICLE 8
A. Section 8.3 is hereby amended by deleting the date "October 31,
1999" in the penultimate line of the section and substituting therefore the date
"January 31, 2000."
B. Section 8.13(b) is hereby amended by deleting the date "November
30, 1999" in the second line of the section and substituting therefore the date
"January 31, 2000."
1.4 AMENDMENTS TO ARTICLE 9
A. Section 9.1(g) is hereby amended to read in its entirety as
follows:
"(g) Debt of the Borrower (and Guarantees of such debt by the
Guarantors hereunder) of an incremental tranche under this Agreement aggregating
no more than $50 million (the "Incremental Tranche"), which will carry identical
terms (including, without limitation, covenants, interest rates, fees, defaults
and security) as applicable under this Agreement, except that (x) each Lender
hereunder will be offered the opportunity, but will not be required, to provide
its pro rata portion of the Incremental Tranche, (y) no funds under the
Incremental Tranche may be drawn until $60 million has been drawn under the
original Loans and (z) no borrowing may be made under the Incremental Tranche if
such borrowing would cause there to exist a Default on a pro forma basis."
B. Section 9.16(i) is hereby amended to read in its entirety as
follows:
"(i) [Intentionally Omitted]"
1.5 AMENDMENTS TO ARTICLE 10
A. Section 10.1 is hereby amended by inserting a new clauses (s)
and (t) as follows:
"(s) If NCI has not sold to Nortel Networks an aggregate of
$75,000,000 in principal amount at stated maturity of Senior Notes on or prior
to January 7, 2000 pursuant to the Securities Purchase Agreement, as amended by
the Securities Purchase Amendment.
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(t) If NCI or NCH shall fail to make the common equity capital
contributions to NCH and the Borrower, respectively, immediately upon the
receipt of any and all of the proceeds by NCI from the sale of the Senior Notes,
in each case in accordance with the Contribution Agreement."
1.6 AMENDMENTS TO ARTICLE 11
A. Sections 11.5, 11.6 and 11.7 shall be renumbered Sections 11.7,
11.8 and 11.9, respectively, and a new Section 11.5 and Section 11.6 shall be
inserted as follows:
"Section 11.5 Appointment of Agents. As of the First Amendment
Effective Date, Nortel Networks hereby resigns as Administrative Agent, and each
Lender, as of the First Amendment Effective Date, irrevocably appoints and
authorizes (i) Toronto Dominion (Texas), Inc. to act as Administrative Agent and
(ii) Xxxxxxx Sachs Credit Partners L.P. to act as Syndication Agent.
Section 11.6 Syndication Agent and Lead Arranger. On and after
the First Amendment Effective Date, GSCP, as Syndication Agent and Joint Lead
Arranger, shall have no duties or obligations under this Amended Agreement or
any other Loan Documents. GSCP, in its capacity as Syndication Agent, shall be
entitled to the benefits and protective provisions afforded to Administrative
Agent under this Article 11."
1.7 AMENDMENTS TO ARTICLE 12
A. Section 12.1 is hereby amended by inserting (i) the words ", the
Syndication Agent" in the following places: after the words "reimburse the
Administrative Agent" prior to clause (a) and after the words "expenses of the
Administrative Agent" in clause (b), and (ii) the words "and the Syndication
Agent" in the following places: after the words "expenses of the Administrative
Agent" both places it occurs in clause (a), after the words "legal counsel for
the Administrative Agent" in clause (b), and after the words "incurred by the
Administrative Agent" in clause (e).
B. Section 12.8(j) is hereby amended by inserting the following
paragraph at the end of the section:
"The parties to this Amended Agreement hereby agree that the
Initial Assignment of Commitments and Loans and shall have occurred on and as of
the First Amendment Effective Date. Accordingly, as of such First Amendment
Effective Date, both the Applicable Margin and the Applicable Commitment Fee
Rate shall be adjusted as provided in the definitions thereof with respect to
the occurrence of the Initial Assignment of Commitments and Loans."
1.8 AMENDMENTS TO SCHEDULES
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A. Schedule 9.16(a) shall be deleted in its entirety and replaced
with new Schedule 9.16(a) attached hereto.
B. Schedule 9.16(b) shall be deleted in its entirety and replaced
with new Schedule 9.16(b) attached hereto.
C. Schedule 9.16(c) shall be deleted in its entirety and replaced
with new Schedule 9.16(c) attached hereto.
D. Schedule 9.16(f) shall be deleted in its entirety and replaced
with new Schedule 9.16(f) attached hereto.
SECTION 2. ASSIGNMENT
A. Pursuant to Section 12.8 of the Credit Agreement, Nortel
Networks hereby agrees to sell and assign and GSCP and TD hereby agree to
purchase and assume from Nortel Networks the percentage interests in and to
Nortel Networks' rights and obligations under the Credit Agreement, this First
Amendment and the other Loan Documents as is set forth opposite the name of GSCP
and TD (each, for purposes of this Section 2, an "ASSIGNEE" and, collectively,
the "ASSIGNEES") on their respective signature pages hereto.
B. Pursuant to Section 9.7 of the Credit Agreement and Section 1.4
hereof and upon the effectiveness of this First Amendment, Nortel Networks
hereby assigns all of its right, title and interest as a secured party of record
under the UCC to TD, as Administrative Agent. Nortel Networks hereby represents,
warrants and agrees that it has not, and will not, release, assign (other than
to TD, as Administrative Agent) or otherwise take any actions that will
adversely affect the validity, perfection or priority of the security interest
of TD, as Administrative Agent, including, without limitation, executing,
delivering or filing financing statements indicating that Nortel Networks, as
retiring Administrative Agent, has released or assigned its interest as a
secured party to any Person other than TD, as Administrative Agent. Nortel
Networks further agrees that from time to time it will execute and deliver such
further agreements, documents and instruments (including, without limitation,
financing statements) and take such further action as may be requested by TD, as
Administrative Agent, to carry out the terms and provisions and purposes of this
First Amendment and to preserve, maintain and perfect the Liens of TD, as
Administrative Agent for the benefit of itself and the Lenders, in and to the
Collateral and the priority of such Liens.
C. In connection with the Assignment described above, Nortel
Networks (a) makes no representation or warranty and assumes no responsibility
with respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or any other Loan
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Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other Loan Document, other
than that it is the legal and beneficial owner of the interest being assigned by
it hereunder and that such interest is free and clear of any adverse claim; (b)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition or results of operations of the Borrower or any
Affiliate of the Borrower or the performance or observance by the Borrower or
any Affiliate of the Borrower of any of its indebtedness, liabilities or
obligations under the Credit Agreement, this First Amendment or any other Loan
Document; and (c) attaches the assigned Note held by Nortel Networks and
requests that the Administrative Agent exchange such Note for new Notes payable
to the order of each Assignee in the amounts equal to the sum of the principal
amount of the Loans plus the principal amount of the unfunded Commitments
assigned to each of the Assignees, respectively.
D. The Assignees each (a) represent and warrant that it is legally
authorized to enter into this First Amendment; (b) confirms that Assignee has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 8.1 thereof, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this First Amendment; (c) agrees that it
will, independently and without reliance upon Nortel Networks and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, this First Amendment and the other Loan Documents; (d) confirms that
it is an Eligible Assignee; (e) appoints and authorizes the Administrative Agent
to take such action on Assignee's behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (f)
agrees that it will perform in accordance with their terms all obligations which
by the terms of the Credit Agreement, this First Amendment and the other Loan
Documents are required to be performed by it as a Lender; (g) agrees that it
will keep confidential all information with respect to the Borrower and its
Affiliates furnished to it by the Borrower or any of its Affiliates or Nortel
Networks (other than information generally available to the public) in
accordance with Section 12.20 of the Credit Agreement; and (h) attaches the
forms prescribed by the Internal Revenue Service of the United States certifying
as to the Assignee's exemption from United States withholding taxes with respect
to all payments to be made to the Assignee under the Credit Agreement, or a
certificate as to the Assignee's exemption from United State's withholding taxes
with respect to all payments to be made to Assignee under the Credit Agreement,
or such other documents as are necessary to indicate that all such payments are
subject to such tax at a rate reduced by an applicable tax treaty.
E. From and after the Closing Date, (a) the Assignees shall each be
a party to the Credit Agreement and shall have the rights and obligations of a
Lender thereunder, under this First Amendment and under the other Loan Documents
and (b) Nortel Networks shall relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan
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Documents. The Administrative Agent shall make all payments in respect of the
respective interests assigned hereby (including payments of principal, interest,
fees and other amounts) to the respective Assignee.
F. The Borrower and Nortel Networks confirm and agree that, as of
the First Amendment Effective Date immediately prior to the effectiveness of the
First Amendment, (i) the outstanding principal amount of Loans is
$33,889,549.40, (ii) the accrued interest and commitment fees under the Credit
Agreement is $437,783.25 and (iii) no other amounts are owed to Nortel Networks
under the Credit Agreement other than legal fees incurred in connection with
this First Amendment.
G. The Borrower agrees to, as of the First Amendment effective
Date, select a new Interest Period applicable to the Loans outstanding as of the
First Amendment Effective Date.
H. Each Assignee's address for notices and Applicable Lending
Office for purposes of the Amended Agreement shall be as specified below its
name on the signature pages of this First Amendment.
SECTION 3. CONDITIONS TO EFFECTIVENESS
Sections 1 and 2 of this First Amendment shall become effective only
upon the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the "FIRST AMENDMENT
EFFECTIVE DATE"):
A. EXECUTION. Loan Parties, Nortel Networks, GSCP, TDSI and TD
shall have executed this First Amendment.
B. RELATED AGREEMENTS. The following documents shall be delivered
by the Borrower, its Affiliates and Nortel Networks and its Affiliates, as the
case may be:
(i) a First Amendment to the Securities Purchase Agreement
(and any related documents), dated July 30, 1999, between NCI and Nortel
Networks in form and substance satisfactory to GSCP and TD in their reasonable
discretion;
(ii) the Contribution Agreement;
(iii) the First Supplemental Indenture;
(iv) the Securities Purchase Amendment; and
(v) the Letter Agreement.
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C. CERTAIN DOCUMENTS. On or before the First Amendment Effective
Date, the Borrower or its Affiliates, as the case may be, shall deliver or cause
to be delivered to Lenders (or to Administrative Agent for Lenders with
sufficient originally executed copies, where appropriate, for each Lender and
its counsel):
(i) resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of (i) this First Amendment,
(ii) the First Supplemental Indenture, (iii) the Securities Purchase Amendment
and (iv) the Contribution Agreement, certified as of the First Amendment
Effective Date by its corporate secretary or an assistant secretary as being in
full force and effect without modification or amendment;
(ii) signature and incumbency certificates of its officers
executing the documents listed in clause (i) above and the other Loan
Documents to which it is a party as of the First Amendment Effective
Date;
(iii) executed originals of Notes issued to GSCP and TD as
well as the cancelled Note issued to Nortel Networks;
(iv) certificates evidencing all insurance policies required
by the Amended Agreement and the other Loan Documents, such certificates
naming the Administrative Agent as loss payee and additional insured;
and
(v) all financing statements and other filings, consents to
collateral assignments from all parties to all Material Contracts included as
part of the Collateral in form and substance acceptable to the Administrative
Agent, delivery of all pledged Capital Stock and instruments together with
appropriate stock powers and endorsements and, with respect to each existing
lease of real Property by any Loan Party relating to a real Property location
where inventory or equipment of a Loan Party having an aggregate fair market
value in excess of $1,000,000 is or will be located, waivers of landlord's Liens
from each lessor and other agreements from such lessor and its lenders necessary
or appropriate to ensure Administrative Agent's perfected, first priority Lien
on the Collateral or Property affected thereby, the Administrative Agent's
access to such Collateral or Property and the right of the Administrative Agent,
the Lenders or their designee to succeed to the rights of the Loan Party that is
the lessee under the lease, in each case in form and substance reasonably
satisfactory to the Administrative Agent.
D. EXISTING INDEBTEDNESS. The Borrower shall have paid to Nortel
Networks all accrued interest, commitment fees and other related expenses
incurred under the Credit Agreement as of the First Amendment Effective Date.
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E. OPINIONS OF LOAN PARTIES' COUNSEL. Administrative Agent (for
Lenders) shall have received an executed copy of one or more favorable written
opinions in form and substance reasonably satisfactory to GSCP and TD in their
sole discretion from Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, counsel to Net2000.
F. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Borrower shall have delivered to Administrative Agent an Officer's Certificate,
in form and substance satisfactory to Administrative Agent, to the effect that
(i) the representations and warranties contained in Section 4 of this First
Amendment are and will be true, correct and complete in all material respects on
and as of the First Amendment Effective Date to the same extent as though made
on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date, and (ii)
Borrower shall have performed in all material respects all agreements and
satisfied all conditions which this Amendment provides shall be performed or
satisfied by Borrower on or before the First Amendment Effective Date, except as
otherwise disclosed to and agreed to in writing by Administrative Agent.
G. FEES. The Administrative Agent and Lenders shall have received
all fees and other amounts due and payable on or prior to the First Amendment
Effective Date, including, to the extent invoiced, reimbursement or other
payment of all out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document.
H. NECESSARY CONSENTS. Each Loan Party and Nortel Networks shall
have obtained all material consents necessary or advisable in connection with
the transactions contemplated by the this First Amendment.
I. OTHER DOCUMENTS. Administrative Agent and Lenders shall have
received such other documents and information regarding Loan Parties, the Loan
Documents and the documents contemplated by Section 3.B. above as Administrative
Agent may reasonably request.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF LOAN PARTIES
In order to induce Lenders to enter into this First Amendment, to amend
the Credit Agreement in the manner provided herein and to effect the Assignment
contemplated hereby, each Loan Party represents and warrants to each Lender that
the following statements are true, correct and complete in all material
respects:
A. CORPORATE POWER AND AUTHORITY. Each Loan Party which is party
hereto has all requisite corporate power and authority to enter into this First
Amendment and to carry out the transactions contemplated by, and perform its
obligations under the Amended Agreement, the
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First Supplemental Indenture, the Securities Purchase Amendment and the other
Loan Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
First Amendment and the performance of the Amended Agreement, the First
Supplemental Indenture, the Securities Purchase Amendment and the other Loan
Documents have been duly authorized by all necessary corporate or partnership
(as applicable) action on the part of each Loan Party.
C. NO CONFLICT. The execution and delivery by each Loan Party of
this First Amendment and the performance by each Loan Party of the Amended
Agreement, the First Supplemental Indenture, the Securities Purchase Amendment
and the other Loan Documents do not and will not (i) violate (A) any provision
of any law, statute, rule or regulation, or of the certificate or articles of
incorporation or partnership agreement, other constitutive documents or by-laws
of any Loan Party or any Subsidiary of any Loan Party, (B) any applicable order
of any court or any rule, regulation or order of any Governmental Authority or
(C) any provision of any indenture, certificate of designation for preferred
stock, agreement or other instrument to which any Loan Party or any Subsidiary
of any Loan Party is a party or by which any of them or any of their property is
or may be bound, (ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under any such
indenture, certificate of designation for preferred stock, agreement or other
instrument, where any such conflict, violation, breach or default referred to in
clause (i) or (ii) of this Section 4.C., individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of each Loan Party (other than any Liens created under any of the Loan
Documents in favor of Administrative Agent on behalf of Lenders), or (iv)
require any approval of stockholders or partners or any approval or consent of
any Person under any contractual obligation of each Loan Party, except for such
approvals or consents which will be obtained on or before the First Amendment
Effective Date.
D. GOVERNMENTAL CONSENTS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the execution and delivery by each Loan
Party of this First Amendment, the First Supplemental Indenture, the Securities
Purchase Amendment and the performance by Borrower of the Amended Agreement and
the other Loan Documents, except for such actions, consents and approvals the
failure to obtain or make which could not reasonably be expected to result in a
Material Adverse Effect or which have been obtained and are in full force and
effect.
E. BINDING OBLIGATION. This First Amendment, the Amended Agreement,
the First Supplemental Indenture and the Securities Purchase Amendment has been
duly executed and delivered by each of the Loan Parties party thereto and each
constitutes a legal, valid and binding obligation of such Loan Party to the
extent a party thereto enforceable against such Loan Party in
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accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Article 7 of the
Amended Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing or
will result from the consummation of the transactions contemplated by this First
Amendment that would constitute an Event of Default or a Default.
H. ADVERSE CHANGE. There has not been, as of the First Amendment
Effective Date, any material adverse change in the financial condition, results
of operations, businesses, operations or Properties of the Borrower and its
Subsidiaries, taken as a whole, or of the Borrower on an individual basis, since
September 30, 1999.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF NORTEL NETWORKS
In order to induce Lenders to enter into this First Amendment, to amend
the Credit Agreement in the manner provided herein and to effect the Assignment
contemplated hereby, Nortel Networks represents and warrants to each Lender that
the following statements are true, correct and complete in all material
respects:
A. CORPORATE POWER AND AUTHORITY. Nortel Networks has all requisite
corporate power and authority to enter into this First Amendment and to carry
out the transactions contemplated by, and perform its obligations under the
Amended Agreement, the Securities Purchase Amendment and the other Loan
Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of this
First Amendment and the performance of the Amended Agreement, the Securities
Purchase Amendment and the other Loan Documents have been duly authorized by all
necessary corporate or partnership (as applicable) action on the part of Nortel
Networks.
C. NO CONFLICT. The execution and delivery by Nortel Networks of
this First Amendment and the performance by Nortel Networks of the Amended
Agreement, the Securities Purchase Amendment and the other Loan Documents do not
and will not (i) violate (A) any pro-
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14
vision of any law, statute, rule or regulation, or of the certificate or
articles of incorporation or partnership agreement, other constitutive documents
or by-laws of Nortel Networks, (B) any applicable order of any court or any
rule, regulation or order of any Governmental Authority or (C) any provision of
any indenture, certificate of designation for preferred stock, agreement or
other instrument to which Nortel Networks is a party or by which it or any of
its property is or may be bound, (ii) be in conflict with, result in a breach of
or constitute (alone or with notice or lapse of time or both) a default under
any such indenture, certificate of designation for preferred stock, agreement or
other instrument, where any such conflict, violation, breach or default referred
to in clause (i) or (ii) of this Section 5.C., individually or in the aggregate
could reasonably be expected to have a Material Adverse Effect, or (iv) require
any approval of stockholders or partners or any approval or consent of any
Person under any contractual obligation of Nortel Networks, except for such
approvals or consents which will be obtained on or before the First Amendment
Effective Date.
D. GOVERNMENTAL CONSENTS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
or will be required in connection with the execution and delivery by Nortel
Networks of this First Amendment and the performance by Nortel Networks of the
Amended Agreement, the Securities Purchase Amendment and the other Loan
Documents, except for such actions, consents and approvals the failure to obtain
or make which could not reasonably be expected to result in a Material Adverse
Effect or which have been obtained and are in full force and effect.
E. BINDING OBLIGATION. This First Amendment, the Amended Agreement
and the Securities Purchase Amendment have been duly executed and delivered by
Nortel Networks and each constitutes a legal, valid and binding obligation of
Nortel Networks to the extent a party thereto enforceable against Nortel
Networks in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 6. SYNDICATION MATTERS
The Borrower agrees that (i) TD (in consultation with GSCP) will be
entitled to syndicate the Loans to one or more banks, financial institutions or
other accredited investors ("ELIGIBLE ASSIGNEES") selected by it which will
become Lenders under the Amended Agreement, (ii) TD (in consultation with GSCP)
will manage the syndication process, including determining the timing of all
offers to potential Eligible Assignees, any title of arranger, documentation
agent, agent or similar designations awarded to any Eligible Assignee and the
acceptance of commitments, the amounts offered and the compensation provided to
each Eligible Assignee, (iii) TD (in consultation with GSCP) will determine the
final commitment allocations and will notify the
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15
Borrower of such determinations and (iv) to ensure an orderly and effective
syndication of the Loans, until 60 days following the completion of a successful
syndication of the Loans (as determined by TD, in consultation with GSCP, in its
reasonable judgment), the Borrower will not, and will not permit any of its
affiliates to, syndicate or issue, attempt to syndicate or issue, announce or
authorize the announcement of the syndication or issuance of, or engage in
discussions concerning the syndication or issuance of, any financing of the
Borrower or any of its subsidiaries (other than the Loans and other indebtedness
contemplated hereby), including any renewals or refinancings of any existing
debt facilities or debt securities, without the prior written consent of TD
(which prior written consent would be given after consultation with GSCP).
The Borrower agrees to cooperate with TD in connection with the
preparation of an information package regarding the business, operations and
prospects of the Borrower, including, without limitation, the delivery of all
information relating to the transactions contemplated hereunder prepared by or
on behalf of the Borrower deemed reasonably necessary by TD to complete the
syndication of the Loans. The Borrower agrees it shall be solely responsible for
the contents of any such information package and presentation and the Borrower
shall acknowledge that GSCP and TD will be using and relying upon the
information contained in such information package and presentation without
independent verification thereof.
The Borrower agrees to reimburse TD, GSCP and the agents under the
Amended Agreement for the reasonable out-of-pocket expenses of TD, GSCP and such
agents in connection with the syndication of the Loans.
SECTION 7. FURTHER ASSURANCES
The Borrower agrees that from time to time, at the expense of Borrower,
it will execute and deliver and will cause each of the Loan Parties to execute
and deliver such further agreements, documents and instruments (including,
without limitation, financing statements and amendments to financing statements
specifying each item of the Collateral and the serial number therefor) and take
such further action as may be requested by the Administrative Agent to carry out
the terms and provisions and purposes of this First Amendment, the Amended
Agreement and the other Loan Documents, to evidence the Obligations and to
create, preserve, maintain and perfect the Liens of the Administrative Agent for
the benefit of itself and the Lenders in and to the Collateral and the required
priority of such Liens.
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16
SECTION 8. ACKNOWLEDGMENT AND CONSENT
Each of NCH, NCC, NCS, NCRE and NCV has (i) guarantied the Obligations
and (ii) created Liens in favor of Lenders on certain Collateral to secure its
obligations under the Guaranty Agreements. NCH, NCC, NCS, NCRE and NCV are
collectively referred to herein as the "CREDIT SUPPORT PARTIES", and the
Guarantee Agreements and the Security Agreements are collectively referred to
herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this First Amendment and
consents to the amendment of the Credit Agreement effected pursuant to this
First Amendment. Each Loan 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 guarantee or secure, as the case may be, to the fullest
extent possible in accordance with the Credit Support Documents the payment and
performance of all "Obligations" under each of the Guarantee Agreements and
Security Agreements, 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 "Obligations" under each of the Guarantee
Agreements and Security Agreements, as the case may be, in respect of the
Obligations of Borrower now or hereafter existing under or in respect of the
Amended Agreement and the Notes defined therein and hereby pledges and assigns
to the Administrative Agent, and grants to the Administrative Agent a continuing
lien on and security interest in and to all Collateral as collateral security
for the prompt payment and performance in full when due of the "Obligations"
under each of the Guarantee Agreements and Security Agreements to which it is a
party (whether at stated maturity, by acceleration or otherwise).
Each 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 First Amendment. Each Credit Support Party represents and
warrants that all representations and warranties contained in the Credit
Agreement, this First Amendment and the Credit Support Documents to which it is
a party or otherwise bound are true, correct and complete in all material
respects on and as of the First Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this First
Amendment, such Credit Support Party is not required by the terms of the Credit
Agreement or any other Loan Document to consent to the amendments to the Credit
Agreement effected pursuant to this First Amendment and (ii) nothing in the
Credit
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17
Agreement, this First Amendment or any other Loan Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
SECTION 9. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
(i) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in 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 First Amendment;
(ii) Except as specifically amended by this First Amendment,
the Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed; and
(iii) The execution, delivery and performance of this First
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of any Agent or Lender under the Credit Agreement or any of
the other Loan Documents.
B. EXPENSES. Notwithstanding anything in this First Amendment or
the Credit Agreement, in no event shall Borrower be obligated to pay or
reimburse the out-of-pocket costs and expenses of the Syndication Agent, the
Administrative Agent or any Lender accrued in connection with the drafting,
preparation, negotiation, execution and delivery of this First Amendment and any
other documents delivered on the First Amendment Effective Date in connection
herewith.
C. HEADINGS. Section and Subsection headings in this First
Amendment are included herein for convenience of reference only and shall not
constitute a part of this First Amendment for any other purpose or be given any
substantive effect.
D. APPLICABLE LAW. THIS FIRST AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE
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00
XXXXX XX XXX XXXX), XXXXXXX REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS. This First Amendment may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
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19
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER: NET2000 COMMUNICATIONS
GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: CFO
CREDIT SUPPORT NET2000 COMMUNICATIONS
PARTIES: CAPITAL EQUIPMENT, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title:
NET2000 COMMUNICATIONS
HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title:
NET2000 COMMUNICATIONS
REAL ESTATE, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title:
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20
NET2000 COMMUNICATIONS SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title:
XXX0000 XXXXXXXXXXXXXX XX
XXXXXXXX, LLC
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title:
NORTEL NETWORKS INC.
By: /s/ Xxxxxxx Xxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
LENDERS
AND AGENTS:
Commitment Percentage (Amount): XXXXXXX XXXXX CREDIT PARTNERS L.P.,
20 % ($15,000,000 ) as Lender, Assignee and as a Joint Lead
----------------------------
Arranger and the Syndication Agent
By: /s/ Xxxxxxx Xxxx
-----------------------------
Name: Xxxxxxx Xxxx
Title: Authorized Signatory
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21
Address for Notices:
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxxx Xxxxxxxxxx
with copies to:
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: 212-346-2608
Telephone No.: 000-000-0000
Attention: Xxxx Xxxxxxxx
and
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy No.: 212-357-4451
Telephone No.: 000-000-0000
Attention: Xxxxxxx Xxxx
Lending Office for Prime Rate Loans:
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Lending Office for Eurodollar Loans:
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
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22
TD SECURITIES (USA) INC.,
as a Joint Lead Arranger and the Book Manager
By: /s/ M. Xxxxxxxxxx Xxxxxxx
-----------------------------
Name: M. Xxxxxxxxxx Xxxxxxx
Title: VP and Director
Commitment Percentage (Amount): TORONTO DOMINION (TEXAS), INC.
80% ($60,000,000) as a Lender and the Administrative Agent
---------------------------
By: /s/ Xxxx Xxxx
-----------------------------
Name: Xxxx Xxxx
Title: Vice President
Address for Notices:
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx Xxxx
Lending Office for Prime Rate Loans:
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx
Lending Office for Eurodollar Loans:
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxx
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SCHEDULE 9.16(a)
TOTAL DEBT TO TOTAL CAPITALIZATION
Maximum Ratio of Total Debt
Calendar Quarter Ending to Total Capitalization
----------------------- -----------------------
September 30, 1999 0.75 to 1.00
December 31, 1999 0.75 to 1.00
March 31, 2000 0.75 to 1.00
June 30, 2000 0.75 to 1.00
September 30, 2000 0.75 to 1.00
December 31, 2000 0.75 to 1.00
March 31, 2001 0.75 to 1.00
June 30, 2001 0.75 to 1.00
September 30, 2001 0.75 to 1.00
December 31, 2001 0.75 to 1.00
March 31, 2002 0.75 to 1.00
June 30, 2002 0.75 to 1.00
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SCHEDULE 9.16(b)
SECURED DEBT TO TOTAL CAPITALIZATION
Maximum Ratio of Secured Debt
Calendar Quarter Ending to Total Capitalization
----------------------- -----------------------
September 30, 1999 0.45 to 1.00
December 31, 1999 0.45 to 1.00
March 31, 2000 0.45 to 1.00
June 30, 2000 0.45 to 1.00
September 30, 2000 0.45 to 1.00
December 31, 2000 0.45 to 1.00
March 31, 2001 0.45 to 1.00
June 30, 2001 0.45 to 1.00
September 30, 2001 0.45 to 1.00
December 31, 2001 0.45 to 1.00
March 31, 2002 0.45 to 1.00
June 30, 2002 0.45 to 1.00
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SCHEDULE 9.16(c)
FIXED CHARGE COVERAGE
Minimum Ratio of EBITDA
Calendar Quarter Ending to Consolidated Fixed Charges
----------------------- -----------------------------
September 30, 2003 1.05 to 1.00
December 31, 2003 1.05 to 1.00
March 31, 2004 1.05 to 1.00
June 30, 2004 1.05 to 1.00
September 30, 2004 1.05 to 1.00
December 31, 2004 1.05 to 1.00
March 31, 2005 1.05 to 1.00
June 30, 2005 1.05 to 1.00
September 30, 2005 1.05 to 1.00
December 31, 2005 1.05 to 1.00
March 31, 2006 1.05 to 1.00
June 30, 2006 1.05 to 1.00
September 30, 2006 1.05 to 1.00
December 31, 2006 1.05 to 1.00
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SCHEDULE 9.16(f)
TOTAL DEBT TO ANNUALIZED EBITDA
Maximum Ratio of Total Debt
Calendar Quarter Ending to Annualized EBITDA
----------------------- --------------------
June 30, 2002 17.00 to 1.00
September 30, 2002 7.00 to 1.00
December 31, 2002 4.00 to 1.00
March 31, 2003 4.00 to 1.00
June 30, 2003 4.00 to 1.00
September 30, 2003 4.00 to 1.00
December 31, 2003 4.00 to 1.00
March 31, 2004 4.00 to 1.00
June 30, 2004 4.00 to 1.00
September 30, 2004 4.00 to 1.00
December 31, 2004 4.00 to 1.00
March 31, 2005 4.00 to 1.00
June 30, 2005 4.00 to 1.00
September 30, 2005 4.00 to 1.00
December 31, 2005 4.00 to 1.00
March 31, 2006 4.00 to 1.00
June 30, 2006 4.00 to 1.00
September 30, 2006 4.00 to 1.00
December 31, 2006 4.00 to 1.00
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