EXHIBIT 2
THIS AMENDMENT AGREEMENT NO. 2 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: CISCO SYSTEMS CAPITAL CANADA CO., as Agent and as a
Lender under the Credit Agreement
(hereinafter referred to as "CISCO")
AND: CREDIT SUISSE FIRST BOSTON, as a Lender under the
Credit Agreement
WHEREAS the Borrower, the Guarantor, GT (US), Cisco Systems Capital Corporation
and the Lenders entered into a credit agreement dated as of September 29, 2000
(the "ORIGINAL AGREEMENT").
WHEREAS Cisco Systems Capital Corporation assigned its interest in the Original
Agreement, both as Agent and as Lender to Cisco.
WHEREAS the Original Agreement was amended pursuant to an amended agreement No.
1 dated as of August 3, 2001 (the "FIRST AMENDING AGREEMENT") (the Original
Agreement, as amended, the "CREDIT AGREEMENT").
WHEREAS Cisco sold to Credit Suisse First Boston an interest in, inter alia, the
Credit Agreement and the debt owing by the Borrower thereunder;
WHEREAS pursuant to Section 9.02(b) 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 (as such terms are defined in the Credit Agreement).
WHEREAS the parties hereto, other than the Credit Parties, constitute the
Required Lenders as at the date hereof.
WHEREAS the parties have decided to amend the Credit Agreement in accordance
herewith.
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NOW THEREFORE THIS AGREEMENT WITNESSES THAT for valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. DEFINED TERMS. All capitalized words and phrases used in this agreement
shall have the meaning assigned to them by 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 1.01.17 of the Credit Agreement is hereby amended to the
following:
"BURNABY DEBT" means 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 1.01.104 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
1.01.106 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) 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.
6. DEFINITION OF "PERMITTED INVESTMENTS". The definition of "Permitted
Investments" contained in Section 1.01.108 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 1.01.109 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
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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
1.01.112 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 1.01.117 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. INTEREST ELECTIONS.
10.1 Subsection 2.05(a) of the Credit Agreement is hereby amended
to the following:
(a) The first Loan initially shall be either a Prime Rate
Loan or a BA Rate Loan as specified in the first Loan Request
and, in the case of a BA Rate Loan, shall have an initial
Interest Period ending on the then next Quarterly Date. Each
subsequent Loan shall be of the same type as the Loan or Loans
outstanding when such subsequent Loan is made. The Borrower
may, subject to Subsection 2.02(c), voluntarily convert all
outstanding Loans to the other type as provided by this
Agreement. The Interest Period of each BA Rate Loan shall end
on the first Quarterly Date after the commencement of such
Interest Period.
10.2 Subsection 2.05(e) of the Credit Agreement is hereby deleted
in its entirety.
10.3 Subsection 7(c) of the First Amending Agreement is hereby
amended to the following:
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(c) if the Borrower does not convert the BA Rate Loans to
Prime Rate Loans in accordance with the provisions hereof on
the last day of the Interest Period applicable to such BA Rate
Loans, then, unless such BA Rate Loans are repaid as provided
herein at the end of such Interest Period, such BA Rate Loans
shall, subject to Section 2.05(f), continue as BA Rate Loans
for the next succeeding Interest Period but the BA Reference
Rate shall change in accordance with the provisions hereof as
at the first day of such next succeeding Interest Period to
the BA Reference Rate for such next succeeding Interest
Period.
11. NEGATIVE COVENANTS. Subsection 5.02(h) of the Credit Agreement is
hereby amended by deleting the amount "$1,350,000,000" and replacing such amount
with "Cdn. $1,000,000,000".
12. STAGE I FINANCIAL COVENANTS.
12.1 SENIOR DEBT RATIO. Subsection 5.03(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.
12.2 TOTAL DEBT RATIO. Subsection 5.03(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.
13. STAGE II FINANCIAL COVENANTS. Subsections 5.04(b) through 5.04 (f)
inclusively of the Credit Agreement are hereby amended to the following:
(b) Total Debt Ratio. 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;
or
(iii) July 1, 2006 or thereafter to exceed 0.65 to 1.00.
(c) Senior Debt Leverage Ratio. 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;
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(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; or
(ix) October 1, 2004 or thereafter to exceed 3.00 to 1.00.
(d) Total Debt Leverage Ratio. 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;
(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; or
(xi) April 1, 2005 or thereafter to exceed 5.00 to 1.00.
(e) Interest Coverage Ratio. Cause the Interest Coverage Ratio at
all times from:
(i) the Stage II Date to December 31, 2002 to exceed 0.20
to 1.00;
(ii) January 1, 2003 to March 31, 2003 to exceed 0.25 to
1.00;
(iii) April 1, 2003 to June 30, 2003 to exceed 0.40 to
1.00;
(iv) July 1, 2003 to September 30, 2003 to exceed 0.50 to
1.00;
(v) October 1, 2003 to December 31, 2003 to exceed 0.50
to 1.00;
(vi) January 1, 2004 to March 31, 2004 to exceed 0.75 to
1.00;
(vii) April 1, 2004 to June 30, 2004 to exceed 0.75 to
1.00;
(viii) July 1, 2004 to September 30, 2004 to exceed 1.00 to
1.00;
(ix) October 1, 2004 to December 31, 2004 to exceed 1.25
to 1.00;
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(x) January 1, 2005 to March 31, 2005 to exceed 1.25 to
1.00;
(xi) April 1, 2005 to June 30, 2005 to exceed 1.25 to
1.00;
(xii) July 1, 2005 to September 30, 2005 to exceed 1.50 to
1.00;
(xiii) October 1, 2005 to December 31, 2005 to exceed 1.50
to 1.00; and
(xiv) January 1, 2006 and thereafter to exceed 1.80 to
1.00.
(f) Fixed Charge Coverage Ratio. Cause the Fixed Charge Coverage
Ratio at all times from:
(xi) October 1, 2004 to December 31, 2004 to exceed 0.45
to 1.00;
(xii) January 1, 2005 to March 31, 2005 to exceed 0.50 to
1.00;
(xiii) April 1, 2005 to June 30, 2005 to exceed 0.75 to
1.00;
(xiv) July 1, 2005 to September 30, 2005 to exceed 0.75 to
1.00;
(xv) October 1, 2005 to December 31, 2005 to exceed 0.75
to 1.00;
(xvi) January 1, 2006 to March 31, 2006 to exceed 1.40 to
1.00;
(xvii) April 1, 2006 to June 30, 2006 to exceed 1.50 to
1.00;
(xviii) July 1, 2006 to September 30, 2006 to exceed 1.50 to
1.00;
(xix) October 1, 2006 to December 31, 2006 to exceed 1.75
to 1.00;
(xx) January 1, 2007 to March 31, 2007 to exceed 1.75 to
1.00; and
(xxi) April 1, 2007 and thereafter to exceed 2.00 to 1.00.
14. ONGOING FINANCIAL COVENANTS.
14.1 REVENUES. Subsections 5.05(a)(v) through 5.05(a)(xv)
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;
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(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;
(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; or
(xv) for its financial year ending September 30, 2006 or
for any of its financial years ending thereafter to
be less than Cdn. $1,320,000,000.
14.2 CAPITAL EXPENDITURES. Subsection 5.05(b) of the Credit
Agreement is hereby amended to the following:
(b) Capital Expenditures. 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; or
(viii) September 30, 2007 or 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")
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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 the
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 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;
14.3 EBITDA. Subsection 5.05(c) of the Credit Agreement is hereby
amended to the following:
(c) EBITDA. 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 its four financial quarters ending December 31,
2001 to be less than negative $88,000,000;
(iv) for its four financial quarters ending March 31, 2002
to be less than negative $75,000,000;
(v) for its 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; or
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(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.
15. NOTICES.
15.1 Subsection 9.01(d) of the Credit Agreement is hereby amended
to the following:
(e) if to Cisco, to Cisco Systems Capital Corporation,
Mailstop SJ-13, 3rd Floor, 000 Xxxx Xxxxxx Xxxxx, Xxx
Xxxx, Xxxxxxxxxx 00000-0000, to the attention of
Xxxxxx Xxxxxxxxx (Telecopy No. (000) 000-0000);
15.2 Section 9.01 of the Credit Agreement is hereby further amended
by inserting after subsection 9.01(c) and before Subsection 9.01(e) the
following:
(d) if to Cisco Systems Capital Canada Co., to Cisco
Systems Capital Canada Co., 000 Xxx Xxxxxx, Xxxxx
0000, X.X. Xxx 000, Xxxxxxx, Xxxxxxx X0X 0X0, to the
attention of Xxx Xxxxx (Telecopy No. (000) 000-0000)
with a copy to Cisco;
and by amending "(e)" to "(f)".
16. NOTICE OF ASSIGNMENT TO BORROWER. Subsection 9.04(d) of the Credit
Agreement is hereby amended by inserting, immediately prior to the last sentence
thereof, the following:
The Agent shall, after recording the assignment in the Register, notify
the Borrower of the identity of the assignee and shall prepare and
distribute to the Borrower an amendment to Schedule 2.01 hereto
reflecting the adjustment to the applicable Commitments after such
assignment.
17. 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.
18. EFFECTIVE DATE. This agreement and the amendments to the Credit
Agreement contained in this agreement shall be effective as of and from the date
of this agreement.
19. 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 of Default has occurred and
is continuing and the representations and warranties contained in Article Three
of the Credit Agreement are true and correct.
20. 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.
21. GOVERNING LAW. This agreement shall be construed and interpreted in
accordance with the laws of the Province of Ontario.
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22. 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.
23. 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:
------------------------------------
Xxxxxx Xxxxxxxxx
Chief Financial Officer
Per:
------------------------------------
Xxxxxx X. Xxxxx
Senior Vice-President,
General Counsel and Secretary
GT GROUP TELECOM INC.
Per:
------------------------------------
Xxxxxx Xxxxxxxxx
Executive Vice-President and
Chief Financial Officer
Per:
------------------------------------
Xxxxxx X. Xxxxx
Senior Vice-President,
General Counsel and Secretary
GT GROUP TELECOM SERVICES (USA) CORP.
Per:
------------------------------------
Xxxxxx X. Xxxxx
Senior Vice-President and
General Counsel
Per:
------------------------------------
Xxxxxxx Xxxxxxxx
Secretary
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CISCO SYSTEMS CAPITAL CANADA CO.
Per:
------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
Per:
------------------------------------
Name:
Title:
