EXHIBIT 1
THIS AMENDMENT AGREEMENT is dated as of the 14th day of November, 2001
AMONG: GT GROUP TELECOM SERVICES CORP.
(hereinafter referred to as the "BORROWER")
AND: GT GROUP TELECOM INC.
(hereinafter referred to as the "GUARANTOR")
AND: GT GROUP TELECOM SERVICES (USA) CORP.
(hereinafter referred to as "GT (US)")
AND: CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent
and as a Lender
AND: XXXXXXX XXXXX CANADA CREDIT PARTNERS CO.
ROYAL BANK OF CANADA
THE TORONTO-DOMINION BANK
BANK OF MONTREAL
THE BANK OF NOVA SCOTIA
CITIBANK CANADA
CSAM FUNDING I
FIRST DOMINION FUNDING I
FIRST DOMINION FUNDING II
IBM COMMERCIAL FINANCE
NATIONAL BANK OF CANADA
TEXTRON FINANCIAL CANADA LIMITED,
each as a Lender
WHEREAS the parties hereto are parties to a credit agreement dated as of
February 3, 2000 (the "ORIGINAL Agreement").
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WHEREAS the Original Agreement was amended and restated pursuant to an amended
and restated credit agreement dated as of September 29, 2000 (the "CREDIT
AGREEMENT").
WHEREAS pursuant to Section 11.11(2) of the Credit Agreement, the parties may
amend the Credit Agreement, with the exception of certain provisions, by
agreement in writing entered into between the Credit Parties and the Required
Lenders.
WHEREAS the parties hereto, other than the Credit Parties, include the Required
Lenders as at the date hereof.
WHEREAS the parties have decided to amend the Credit Agreement in accordance
herewith.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, parties hereby agree
as follows:
1. DEFINED TERMS. All capitalized words and phrases used in this agreement
and the recitals hereto shall have the meaning assigned to them in the Credit
Agreement unless such words or phrases are otherwise defined in this agreement.
2. ONE AGREEMENT. This agreement amends the Credit Agreement. This agreement
and the Credit Agreement shall be read, interpreted, construed and have effect
as, and shall constitute, one agreement with the same effect as if the
amendments made by this agreement had been contained in the Credit Agreement as
of the date of this agreement.
3. DEFINITION OF "BURNABY DEBT". The definition of "Burnaby Debt" contained
in Section 1.01 of the Credit Agreement is hereby amended to the following:
"BURNABY DEBT" shall mean Debt owing to CIBC Mortgages Inc. in an
aggregate principal amount not exceeding Cdn. $500,000, secured by a
mortgage on 0000 Xxxxxx Xxxxxx, Xxxxxxx, X.X.
4. DEFINITION OF "PERMITTED ACQUISITIONS". The definition of "Permitted
Acquisitions" contained in Section 1.01 of the Credit Agreement is hereby
amended by deleting Subsection (i) thereof in its entirety.
5. DEFINITION OF "PERMITTED DEBT".
5.1 The definition of "Permitted Debt" contained in Section 1.01 of the
Credit Agreement is hereby amended by deleting the amount "Cdn.
$1,350,000,000" in subparagraph (i) thereof and replacing such amount
with "Cdn. $1,000,000,000".
5.2 The definition of "Permitted Debt" is further amended by deleting the
period at the end of Subsection (xi) thereof and replacing it with ";
and", and by adding after said Subsection (xi) the following:
(xii) unsecured Debt of Credit Parties for the deferred purchase
price of Permitted Acquisitions, in an aggregate principal amount
not to exceed Cdn. $50,000,000 (or any Equivalent Amount) at any
time.
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6. DEFINITION OF "PERMITTED INVESTMENTS". The definition of "Permitted
Investments" contained in Section 1.01 of the Credit Agreement is hereby amended
by deleting Subsection (i) thereof in its entirety.
7. DEFINITION OF "PERMITTED LIENS". The definition of "Permitted Liens"
contained in Section 1.01 of the Credit Agreement is hereby amended by deleting
the period at the end of Subsection (xiv) thereof and replacing it by ";" and by
further adding after said Subsection (xiv) the following:
(xv) Liens securing Permitted Refinancing Debt, provided that such
Liens do not affect any property other than the property that was
subject to a Lien in connection with the Debt being refinanced and
provided that such Liens have the same or lower priority after the
refinancing as they did prior to such refinancing; and
(xvi) Liens to secure performance obligations of a Credit Party in
connection with agreements pursuant to which (i) no Debt is
incurred by a Credit Party, (ii) the property subject to such
Liens is owned, but not available for use, by any Credit Party and
(iii) the Lien is created at the time the property is acquired by
the Credit Party and is limited to such property; such Liens may
rank in priority to the Security.
8. DEFINITION OF "PLAN". The definition of "Plan" contained in Section 1.01
of the Credit Agreement is hereby deleted in its entirety.
9. DEFINITION OF "PURCHASE MONEY OBLIGATION". The definition of "Purchase
Money Obligation" contained in Section 1.01 of the Credit Agreement is hereby
amended to the following:
"PURCHASE MONEY OBLIGATION" means any Debt (including without limitation
a Capitalized Lease Obligation) incurred or assumed to finance all or any
part of the acquisition price of any property or services acquired by any
Credit Party after the date of this Agreement or to finance all or any
part of the cost of any improvement to any property of any Credit Party,
provided that such obligation is incurred or assumed prior to or within
60 days after the later of acquisition of such property or services or
the completion of such improvement and the date of this Agreement and
does not exceed the lesser of the acquisition price payable by such
Credit Party for such property, services or improvement and the fair
market value of such property, services or improvement; and includes any
extension, renewal or refunding of any such obligation so long as the
principal amount thereof outstanding on the date of such extension,
renewal or refunding is not increased except by accrued and unpaid
interest and refinancing costs. For greater certainty, Purchase Money
Obligations shall not include Debt incurred or assumed in a transaction
of sale and leaseback of any property entered into more than 60 days
after the later of the acquisition of such property and the date of this
Agreement.
10. NEGATIVE COVENANTS. Subsection 8.02(h) of the Credit Agreement is hereby
amended by deleting the amount "Cdn. $1,350,000,000" and replacing such amount
with "Cdn. $1,000,000,000".
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11. STAGE I FINANCIAL COVENANTS.
11.1 SENIOR DEBT RATIO. Subsection 8.03(a)(iii) of the Credit Agreement
is hereby amended to the following:
(iii) December 31, 2001 to September 30, 2002 to be more than 0.45 to
1.0.
11.2 TOTAL DEBT RATIO. Subsection 8.03(b)(ii) of the Credit Agreement
is hereby amended to the following:
(ii) December 31, 2001 to September 30, 2002 to be more than 0.65 to
1.0.
12. STAGE II FINANCIAL COVENANTS. Subsections 8.04(b) through 8.04 (f)
inclusively of the Credit Agreement are hereby amended to the following:
(b) Total Debt Ratio. It will not permit the Total Debt Ratio at any
time from
(i) the Stage II Date to June 30, 2004 to exceed 0.65 to 1.0;
(ii) July 1, 2004 to June 30, 2006 to exceed 0.67 to 1.00;
(iii) July 1, 2006 and thereafter to exceed 0.65 to 1.00.
(c) Senior Debt Leverage Ratio. It will not permit the Senior Debt
Leverage Ratio at any time from
(i) the Stage II Date to December 31, 2002 to exceed 18.00 to
1.00;
(ii) January 1, 2003 to March 31, 2003 to exceed 11.00 to 1.00;
(iii) April 1, 2003 to June 30, 2003 to exceed 8.00 to 1.00;
(iv) July 1, 2003 to September 30, 2003 to exceed 7.50 to 1.00;
(v) October 1, 2003 to December 31, 2003 to exceed 6.50 to
1.00;
(vi) January 1, 2004 to March 31, 2004 to exceed 5.00 to 1.00;
(vii) April 1, 2004 to June 30, 2004 to exceed 3.50 to 1.00;
(viii) July 1, 2004 to September 30, 2004 to exceed 3.50 to 1.00;
(ix) October 1, 2004 and thereafter to exceed 3.00 to 1.00.
(d) Total Debt Leverage Ratio. It will not permit the Total Debt
Leverage Ratio at any time from
(i) the Stage II Date to December 31, 2002 to exceed 35.00 to
1.00;
(ii) January 1, 2003 to March 31, 2003 to exceed 25.00 to 1.00;
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(iii) April 1, 2003 to June 30, 2003 to exceed 20.00 to 1.00;
(iv) July 1, 2003 to September 30, 2003 to exceed 14.00 to 1.00;
(v) October 1, 2003 to December 31, 2003 to exceed 12.00 to
1.00;
(vi) January 1, 2004 to March 31, 2004 to exceed 10.00 to 1.00;
(vii) April 1, 2004 to June 30, 2004 to exceed 9.00 to 1.00;
(viii) July 1, 2004 to September 30, 2004 to exceed 8.00 to 1.00;
(ix) October 1, 2004 to December 31, 2004 to exceed 7.00 to
1.00;
(x) January 1, 2005 to March 31, 2005 to exceed 7.00 to 1.00;
(xi) April 1, 2005 and thereafter to exceed 5.00 to 1.00.
(e) Interest Coverage Ratio. It will ensure that the Interest Coverage
Ratio at any time from
(i) the Stage II Date to December 31, 2002 exceeds 0.20 to
1.00;
(ii) January 1, 2003 to March 31, 2003 exceeds 0.25 to 1.00;
(iii) April 1, 2003 to June 30, 2003 exceeds 0.40 to 1.00;
(iv) July 1, 2003 to September 30, 2003 exceeds 0.50 to 1.00;
(v) October 1, 2003 to December 31, 2003 exceeds 0.50 to 1.00;
(vi) January 1, 2004 to March 31, 2004 exceeds 0.75 to 1.00;
(vii) April 1, 2004 to June 30, 2004 exceeds 0.75 to 1.00;
(viii) July 1, 2004 to September 30, 2004 exceeds 1.00 to 1.00;
(ix) October 1, 2004 to December 31, 2004 exceeds 1.25 to 1.00;
(x) January 1, 2005 to March 31, 2005 exceeds 1.25 to 1.00;
(xi) April 1, 2005 to June 30, 2005 exceeds 1.25 to 1.00;
(xii) July 1, 2005 to September 30, 2005 exceeds 1.50 to 1.00;
(xiii) October 1, 2005 to December 31, 2005 exceeds 1.50 to 1.00;
(xiv) January 1, 2006 and thereafter exceeds 1.80 to 1.00.
(f) Fixed Charge Coverage Ratio. It will ensure that the Fixed Charge
Coverage Ratio at any time from
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(i) October 1, 2004 to December 31, 2004 exceeds 0.45 to 1.00;
(ii) January 1, 2005 to March 31, 2005 exceeds 0.50 to 1.00;
(iii) April 1, 2005 to June 30, 2005 exceeds 0.75 to 1.00;
(iv) July 1, 2005 to September 30, 2005 exceeds 0.75 to 1.00;
(v) October 1, 2005 to December 31, 2005 exceeds 0.75 to 1.00;
(vi) January 1, 2006 to March 31, 2006 exceeds 1.40 to 1.00;
(vii) April 1, 2006 to June 30, 2006 exceeds 1.50 to 1.00;
(viii) July 1, 2006 to September 30, 2006 exceeds 1.50 to 1.00;
(ix) October 1, 2006 to December 31, 2006 exceeds 1.75 to 1.00;
(x) January 1, 2007 to March 31, 2007 exceeds 1.75 to 1.00;
(xi) April 1, 2007 and thereafter exceeds 2.00 to 1.00.
13. ONGOING FINANCIAL COVENANTS.
13.1 REVENUES. Subsections 8.05(a)(v) through 8.05(a)(xv) of the Credit
Agreement inclusively are hereby amended to the following:
(v) for the four financial quarters ending December 31, 2001 to
be less than Cdn. $210,000,000;
(vi) for the four financial quarters ending March 31, 2002 to be
less than Cdn. $235,000,000;
(vii) for the four financial quarters ending June 30, 2002 to be
less than Cdn. $260,000,000;
(viii) for the four financial quarters ending September 30, 2002
to be less than Cdn. $300,000,000;
(ix) for the four financial quarters ending December 31, 2002 to
be less than Cdn. $335,000,000;
(x) for the four financial quarters ending March 31, 2003 to be
less than Cdn. $380,000,000;
(xi) for the four financial quarters ending June 30, 2003 to be
less than Cdn. $420,000,000;
(xii) for the four financial quarters ending September 30, 2003
to be less than Cdn. $470,000,000;
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(xiii) for its financial year ending September 30, 2004 to be less
than Cdn. $710,000,000;
(xiv) for its financial year ending September 30, 2005 to be less
than Cdn. $1,005,000,000; and
(xv) for its financial year ending September 30, 2006 and
thereafter to be less than Cdn. $1,320,000,000.
13.2 CAPITAL EXPENDITURES. Subsection 8.05(b) of the Credit Agreement is
hereby amended to the following:
(b) Capital Expenditures. It will not permit Capital Expenditures
during the Parent Guarantor's financial year ending
(i) September 30, 2000 to exceed $375,000,000;
(ii) September 30, 2001 to exceed Cdn. $690,000,000;
(iii) September 30, 2002 to exceed Cdn. $200,000,000;
(iv) September 30, 2003 to exceed Cdn. $180,000,000;
(v) September 30, 2004 to exceed Cdn. $160,000,000;
(vi) September 30, 2005 to exceed Cdn. $160,000,000;
(vii) September 30, 2006 to exceed Cdn. $160,000,000;
(viii) September 30, 2007 and thereafter to exceed Cdn.
$240,000,000 per financial year;
provided that (A) to the extent that actual Capital Expenditures
during any financial year are less than the corresponding maximum
threshold amount set out above, an additional amount equal to the
difference (the "Unused Amount") may be spent on Capital
Expenditures during the first two quarters of the next following
financial year (provided that a maximum of Cdn. $75,000,000 of the
Unused Amount from the financial year ending September 30, 2001
may be spent on Capital Expenditures during the first two quarters
of the financial year ending September 30, 2002) and, to the
extent that actual Capital Expenditures during such two quarter
period are less than the Unused Amount, an additional amount equal
to 50% of the difference may be spent on Capital Expenditures
during the remainder of such financial year (excluding the
financial year ending September 30, 2001), and Capital
Expenditures made during such financial year shall not be counted
as against the applicable maximum threshold amount set out above
until such additional amounts (if any) have been exceeded
(provided that any unused portions of such additional amounts may
not be carried forward pursuant to this proviso (A)), and (B) from
February 3, 2000 to the Maturity Date Capital Expenditures in any
financial year may exceed the applicable maximum threshold set out
above where (x) the Borrower has provided the Agent with a
certificate of a Senior Officer certifying that such excess
Capital Expenditures
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shall not reasonably be expected to create a Default or Event of
Default, and (y) the aggregate amount of all such excess Capital
Expenditures made from February 3, 2000 to the Maturity Date does
not exceed the Combined Cap less Cdn. $600,000,000;
13.3 EBITDA. Subsection 8.05(c) of the Credit Agreement is hereby amended to
the following:
(c) EBITDA. It will not permit EBITDA
(i) for its financial year ending September 30, 2000 to be less
than negative Cdn. $95,000,000;
(ii) for its financial year ending September 30, 2001 to be less
than negative Cdn $135,000,000;
(iii) for the four financial quarters ending December 31, 2001 to
be less than negative $88,000,000;
(iv) for the four financial quarters ending March 31, 2002 to be
less than negative $75,000,000;
(v) for the four financial quarters ending June 30, 2002 to be
less than negative $60,000,000;
(vi) for its financial year ending September 30, 2002 to be less
than negative Cdn. $25,000,000;
(vii) for its financial year ending September 30, 2003 to be less
than Cdn. $70,000,000;
(viii) for its financial year ending September 30, 2004 to be less
than Cdn. $210,000,000; and
(ix) for its financial year ending September 30, 2005 to be less
than Cdn. $370,000,000, or for any financial year
thereafter to be less than Cdn. $370,000,000.
14. CONFIRMATION. The parties hereby confirm the provisions of the Credit
Agreement as amended by this agreement and each of the Credit Parties hereby
confirms that each of the other Credit Documents remains in full force and
effect.
15. EFFECTIVE DATE. This agreement and the amendments to the Credit Agreement
contained in this agreement shall be effective upon execution of this agreement
by the Required Lenders, with effect as of and from the date of this agreement.
By its signature of this agreement, the Agent confirms that the Required Lenders
have executed this agreement.
16. CONFIRMATION OF REPRESENTATIONS: Each of the Borrower and the Guarantors
represents and warrants that, as at the date of this agreement and assuming that
the amendments made to the Credit Agreement by this amending agreement have
become effective, no Default or Event
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of Default has occurred and is continuing and the representations and warranties
contained in Article Seven of the Credit Agreement are true and correct.
17. HEADINGS. The section headings used herein are for convenience of
reference only, are not part of this agreement and shall not affect the
construction of, or be taken into consideration in interpreting this agreement.
18. GOVERNING LAW. This agreement shall be construed and interpreted in
accordance with the laws of the Province of Ontario.
19. COUNTERPARTS. This agreement may be executed in counterparts (and by
different parties hereto on different counterparts), each of which shall
constitute an original, but all of which when taken together shall constitute a
single contract.
20. SUCCESSORS AND ASSIGNS. This agreement shall enure to the benefit of and
be binding on the parties hereto and their respective successors and assigns.
IN WITNESS WHEREOF the parties hereto have caused this agreement to be duly
executed by their respective authorized officers as of the date and year first
above written.
GT GROUP TELECOM SERVICES CORP.
Per:
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Xxxxxx Xxxxxxxxx
Chief Financial Officer
Per:
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Xxxxxx X. Xxxxx
Senior Vice-President, General Counsel and
Secretary
GT GROUP TELECOM INC.
Per:
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Xxxxxx Xxxxxxxxx
Executive Vice-President and Chief Financial
Officer
Per:
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Xxxxxx X. Xxxxx
Senior Vice-President, General Counsel and
Secretary
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GT GROUP TELECOM SERVICES (USA) CORP.
Per:
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Xxxxxx X. Xxxxx
Senior Vice-President and General Counsel
Per:
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Xxxxxxx Xxxxxxxx
Secretary
CANADIAN IMPERIAL BANK OF COMMERCE
Per:
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XXXXXXX SACHS CANADA CREDIT PARTNERS CO.
Per:
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Per:
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ROYAL BANK OF CANADA
Per:
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Per:
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THE TORONTO-DOMINION BANK
Per:
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Per:
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BANK OF MONTREAL
Per:
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Per:
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THE BANK OF NOVA SCOTIA
Per:
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Per:
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CITIBANK CANADA
Per:
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Per:
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CSAM FUNDING I
Per:
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Per:
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FIRST DOMINION FUNDING I
Per:
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Per:
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FIRST DOMINION FUNDING II
Per:
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Per:
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IBM COMMERCIAL FINANCE
Per:
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Per:
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NATIONAL BANK OF CANADA
Per:
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Per:
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TEXTRON FINANCIAL CANADA LIMITED
Per:
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Per:
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