Exhibit 10.1
AMENDMENT RELATING TO FINANCIAL COVENANTS
THIS AMENDMENT (the "Amendment") with respect to the Credit Agreement
referred to below is made and entered into as of the 31st day of March, 2001 by
and among CHOICE ONE COMMUNICATIONS INC., a Delaware corporation (the
"Company"), as Guarantor, its Subsidiaries (collectively, the "Borrowers") party
to such Credit Agreement, FIRST UNION INVESTORS, INC., as Administrative Agent,
GENERAL ELECTRIC CAPITAL CORPORATION, as Syndication Agent, XXXXXX XXXXXXX
SENIOR FUNDING, INC., as Documentation Agent and the Lenders set forth on the
signature pages hereto.
STATEMENT OF PURPOSE
The Borrowers, the Company, the Lenders and the Agents are parties to
that certain Second Amended and Restated Credit Agreement, dated as of August 1,
2000 (as previously amended, as amended hereby and as further amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
pursuant to which the Lenders have extended certain credit facilities to the
Borrowers.
The Company and the Borrowers have requested certain modifications to
the financial covenants contained in Article X of the Credit Agreement, and the
Agents and the Lenders have agreed to such request pursuant to the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. CAPITAL TERMS. All capitalized terms used and not defined herein shall have
the meanings given thereto in the Credit Agreement.
2. AMENDMENT. Article X of the Credit Agreement is hereby amended by deleting
the existing Article X in its entirety and inserting in lieu thereof the
provisions set forth on EXHIBIT A hereto.
3. EFFECTIVENESS. This Amendment shall be effective on the date that each
of the following conditions has been satisfied:
(a) AMENDMENT. The Administrative Agent shall have received a fully
executed copy of this Amendment, executed by the Company, the Borrowers and
the Required Lenders.
(b) AMENDMENT FEES. The Borrowers shall have paid to each Lender
executing this Amendment an amendment fee in an amount equal to 0.15% of
such Lender's Commitment as of the date of this Amendment.
(c) OTHER DOCUMENTS. The Administrative Agent shall have received any
other documents or instruments reasonably requested by the Administrative
Agent in connection with the execution of this Amendment.
4. REPRESENTATIONS AND WARRANTIES; COVENANTS. By their execution hereof, the
Company and the Borrowers hereby certify that each of the representations
and warranties set forth in the Credit Agreement and the other Loan
Documents is true and correct in all material respects as of the date
hereof as if fully set forth herein and that as of the date hereof no
Default or Event of Default has occurred and is continuing.
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5. EFFECT OF THE AMENDMENT. Except for the amendments contemplated hereby, the
Credit Agreement and the Loan Documents shall be and remain in full force
and effect. The amendments granted herein are specific and limited and
shall not constitute a modification, acceptance or waiver of any other
provision or default of the Credit Agreement, the Loan Documents or any
other document or instrument entered into in connection therewith or a
further modification, acceptance or waiver of the provisions set forth
therein.
6. EXPENSES. The Borrowers shall pay all reasonable out-of-pocket
expenses of the Administrative Agent in connection with the
negotiation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent.
7. GOVERNING LAW. This Amendment shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
8. COUNTERPARTS. This Amendment may be executed in separate counterparts, each
of which when executed and delivered is an original but all of which taken
together constitute one and the same instrument.
9. FAX TRANSMISSION. A facsimile, telecopy or other reproduction of this
Amendment may be executed by one or more parties hereto, and an executed
copy of this Amendment may be delivered by one or more parties hereto by
facsimile or similar instantaneously electronic transmission devise
pursuant to which the signature of or on behalf of such party can be seen,
and such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all parties
hereto agree to execute an original of this Amendment as well as any
facsimile, telecopy or other reproduction hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date and year first above written.
CHOICE ONE COMMUNICATIONS INC.,
as Guarantor and on behalf of the Borrowers
[CORPORATE SEAL]
By: /S/ XXXX X. XXXXXX
------------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President Finance
3
FIRST UNION INVESTORS, INC.,
as Administrative Agent and Lender
By: /S/ XXXX X. XXXX
--------------------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President
4
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Syndication Agent and Lender
By: /S/ XXXXX X. XXXX
--------------------------------------------
Name: Xxxxx X. Xxxx
Title: Manager-Operations
5
XXXXXX XXXXXXX SENIOR FUNDING,
INC.,
as Documentation Agent and Lender
By: /S/ XXXXX XXXXXXXX
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
6
CIBC INC., as Lender
By: /S/ XXXXX XXXXXXX
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Executive Director, CIBC World
Markets Corp. As Agent
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PNC BANK, NATIONAL ASSOCIATION,
as Lender
By: /S/ XXXXX X. XXXXX
--------------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
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THE BANK OF NEW YORK,
as Lender
By: /S/ XXXXXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Senior Vice President
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DRESDNER BANK AG, NEW YORK AND GRAND CAYMEN BRANCHES,
as Lender
By: /S/ XXXXXXX X. XXXXXXXXX
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Assistant Vice President
By: /S/ XXXXXXX X XXXXXXX
---------------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: First Vice President
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FORTIS CAPITAL CORP.,
as Lender
By: /S/ XXXXX XXXX
---------------------------------------------------
Name: Xxxxx Xxxx
Title: Managing Director
By: /S/ XXXX XXXXX
---------------------------------------------------
Name: Xxxx Xxxxx
Title: Assistant Vice President
IBM CREDIT CORPORATION,
as Lender
By: /S/ XXXXXX X. XXXXXX
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager of Credit
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CREDIT LYONNAIS NEW YORK BRANCH,
as Lender
By: /S/ XXXXXXX XXXXXXXX
Name: Xxxxxxx XxXxxxxx
Title:
-------------------------------------
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EXHIBIT A
ARTICLE X
FINANCIAL COVENANTS
SECTION 10.1 STAGE 1 COVENANTS. Until all of the Obligations have been
paid and satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 15.11 hereof, during the Stage
1 Covenant Period, the Borrowers on a Consolidated basis will not:
(a) TOTAL DEBT TO CONTRIBUTED CAPITAL RATIO: As of any date of determination,
permit the ratio of Total Debt to Contributed Capital to exceed fifty
percent (50%).
(b) TOTAL CONSOLIDATED DEBT TO CONTRIBUTED CONSOLIDATED CAPITAL RATIO. As of
any date of determination, permit the ratio of Total Consolidated Debt to
Contributed Consolidated Capital to exceed sixty-five percent (65%).
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(c) MINIMUM REVENUE: As of any fiscal quarter end during the applicable period
set forth below, permit Total Revenue for the fiscal quarter ending on such
date to be less than the corresponding amount set forth below:
--------------------------------------------------------------------
Period Ending Minimum Revenue (in thousands)
--------------------------------------------------------------------
9/30/00 $ 16,500
12/31/00 29,000
3/31/01 31,500
6/30/01 38,200
9/30/01 48,600
12/31/01 62,500
3/31/02 70,000
6/30/02 80,000
9/30/02 92,500
12/31/02 102,500
3/31/03 112,500
6/30/03 122,500
9/30/03 132,500
12/31/03 140,000
3/31/04 150,000
6/30/04 157,000
9/30/04 167,500
12/31/04 175,000
3/31/05 182,500
6/30/05 190,000
9/30/05 197,500
12/31/05 205,000
3/31/06 212,500
6/30/06 220,000
9/30/06 227,500
12/31/06 235,000
3/31/07 240,000
6/30/07 247,500
9/30/07 255,000
12/31/07 262,500
3/31/08 267,500
6/30/08 275,000
9/30/08 280,000
12/31/08 287,500
3/31/09 290,000
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(d) MAXIMUM EBITDA LOSSES/MINIMUM EBITDA: As of any fiscal quarter end
during the applicable period set forth below, permit (i) EBITDA losses thereof
for the fiscal quarter ending on such date to exceed the corresponding negative
amount set forth below; PROVIDED, that for each fiscal quarter ending during
2000 and 2001, either (A) the EBITDA loss for such fiscal quarter shall not
exceed the corresponding negative amount set forth below or (B) the cumulative
EBITDA loss from July 1, 2000 to such fiscal quarter end shall not exceed the
cumulative negative amounts set forth below for such period or (ii) permit
EBITDA thereof to be less than the corresponding positive amount set forth
below:
-------------------------------------------------------
Max EBITDA Losses/
Period Min EBITDA (in thousands)
-------------------------------------------------------
9/30/00 (22,000)
12/31/00 (25,000)
3/31/01 (28,400)
6/30/01 (22,400)
9/30/01 (16,400)
12/31/01 (10,040)
3/31/02 (6,140)
6/30/02 (237)
9/30/02 5,122
12/31/02 10,217
3/31/03 17,000
6/30/03 23,000
9/30/03 28,000
12/31/03 32,000
3/31/04 38,000
6/30/04 41,000
9/30/04 45,000
12/31/04 48,000
3/31/05 53,000
6/30/05 56,000
9/30/05 59,000
12/31/05 63,000
3/31/06 66,000
6/30/06 69,000
9/30/06 72,000
12/31/06 76,000
3/31/07 78,000
6/30/07 81,000
9/30/07 85,000
12/31/07 88,000
3/31/08 90,000
6/30/08 92,000
9/30/08 94,000
12/31/08 97,000
3/31/09 98,000
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(e) MAXIMUM CAPITAL EXPENDITURES: As of the end of any Fiscal Year, permit
Capital Expenditures for such Fiscal Year to exceed the corresponding
amount set forth below:
------------------------------------------------------------
Fiscal Year Maximum Capital
Ending Expenditures (in thousands)
------------------------------------------------------------
12/31/00 138,500
12/31/01 99,500
12/31/02 84,000
12/31/03 70,000
12/31/04 67,000
12/31/05 64,000
12/31/06 67,000
12/31/07 70,000
12/31/08 62,000
------------------------------------------------------------
; PROVIDED that if the Borrowers make Capital Expenditures in any Fiscal Year in
an amount less than the amount set forth above for any such Fiscal Year (such
unused amount for any single Fiscal Year, or the cumulative unused amount for
any number of Fiscal Years, as applicable, referred to below as the "Stage 1
Carryover Amount"), then (i) the Borrowers may make Capital Expenditures in any
succeeding fiscal year in an amount not to exceed the sum of (A) the amount set
forth above for such fiscal year and (B) the Stage 1 Carryover Amount and (ii)
for purposes of determining whether any Capital Expenditure exceeds the maximum
amount permitted for any given Fiscal Year, the Capital Expenditure for such
Fiscal Year shall be applied first to the Stage 1 Carryover Amount then
outstanding.
(f) MINIMUM ASSET COVERAGE: As of any fiscal quarter end, permit the ratio of
(i) the Total Debt of the Borrowers and their Subsidiaries as of such date
to (ii) PP&E thereof as of such date to exceed 1.00 to 1.00.
SECTION 10.2 STAGE 2 COVENANTS. Until all of the Obligations have been paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 15.11 hereof, during the Stage 2
Covenant Period (during which time the covenants set forth in Section 10.1 shall
cease to be applicable) the Borrowers on a Consolidated basis will not:
(a) BORROWER LEVERAGE RATIO: As of any fiscal quarter end during the applicable
period set forth below, permit the Borrower Leverage Ratio to exceed the
corresponding ratio set forth below:
-------------------------------------------------------------
Period Ratio
-------------------------------------------------------------
Stage 2 Effective
Date through
06/29/2004 6.00 to 1.00
06/30/2004 through
06/29/2005 5.00 to 1.00
06/30/2005 through
06/29/2006 4.00 to 1.00
06/30/2006 and 3.00 to 1.00
thereafter
-------------------------------------------------------------
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(b) BORROWER FIXED CHARGE COVERAGE RATIO: As of any fiscal quarter end during
the applicable period set forth below, permit the ratio of (i) EBITDA
thereof for the six-month period ending on such fiscal quarter end TIMES
two (2) to (ii) Borrower Fixed Charges for the period of four (4)
consecutive fiscal quarters ending on such fiscal quarter end to be less
than the corresponding ratio set forth below:
---------------------------------------------------------------
Period Ratio
---------------------------------------------------------------
Stage 2 Effective
Date through
06/29/2003 N/A
06/30/2003 through
06/29/2004 1.00 to 1.00
06/30/2004 and
thereafter 1.10 to 1.00
---------------------------------------------------------------
(c) INTEREST COVERAGE RATIO: As of any fiscal quarter end during the applicable
period set forth below, permit the ratio of (i) EBITDA thereof for the
six-month period ending on such fiscal quarter end to (ii) cash Interest
Expense thereof for the six-month period ending on such fiscal quarter end,
to be less than the corresponding ratio set forth below:
---------------------------------------------------------------
Period Ratio
---------------------------------------------------------------
Stage 2 Effective
Date through
06/29/2003 1.50 to 1.00
06/30/2003
and
thereafter 2.00 to 1.00
--------------------------------------------------------------
(d) MAXIMUM CAPITAL EXPENDITURES: As of the end of any Fiscal Year, permit
Capital Expenditures for such Fiscal Year to exceed the corresponding
amount set forth below:
------------------------------------------------------------
Fiscal Year Maximum Capital
Ending Expenditures (in thousands)
------------------------------------------------------------
12/31/00 138,500
12/31/01 126,500
12/31/02 84,000
12/31/03 70,000
12/31/04 67,000
12/31/05 64,000
12/31/06 67,000
12/31/07 70,000
12/31/08 62,000
------------------------------------------------------------
; PROVIDED, that if the Borrowers make Capital Expenditures in any Fiscal Year
(other than any Fiscal Year all or a part of which was included in the Stage 1
Covenant Period) in an amount less than the amount set forth above for any such
Fiscal Year (such unused amount for any single Fiscal Year, or the
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cumulative unused amount for any number of Fiscal Years, as applicable, referred
to below as the "Stage 2 Carryover Amount"), then (i) the Borrowers may make
Capital Expenditures in any succeeding fiscal year in an amount not to exceed
the sum of (A) the amount set forth above for such fiscal year and (B) the Stage
2 Carryover Amount and (ii) for purposes of determining whether any Capital
Expenditure exceeds the maximum amount permitted for any given Fiscal Year, the
Capital Expenditure for such Fiscal Year shall be applied first to the Stage 2
Carryover Amount then outstanding.
SECTION 10.3 GUARANTOR COVENANT. Until all of the Obligations have been
paid and satisfied in full and the Commitments terminated, unless consent has
been obtained in the manner set forth in Section 15.11 hereof, during the Stage
2 Covenant Period the Company on a Consolidated basis will not, as of any fiscal
quarter end during the applicable period set forth below, permit the Company
Leverage Ratio to be greater than the corresponding ratio set forth below:
----------------------------------------------------------
Period Ratio
----------------------------------------------------------
Stage 2 Effective Date
through
06/29/2004 10.00 to 1.00
06/30/2004 through
06/29/2005 8.00 to 1.00
06/30/2005 through
06/29/2006 6.00 to 1.00
06/30/2006 and
thereafter 4.00 to 1.00
----------------------------------------------------------
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