EXHIBIT 10.37
EXECUTION COPY
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of November 14,
2000 (this "Amendment"), to the Existing Credit Agreement (as defined below)
is made by CTC COMMUNICATIONS CORP., a Massachusetts corporation (the
"Borrower") and a wholly-owned Subsidiary of the Parent (as defined below),
CTC COMMUNICATIONS GROUP, INC., a Delaware corporation (the "Parent"),
certain of the Lenders (such capitalized term and other capitalized terms
used in this preamble and the recitals below to have the meanings set forth
in, or are defined by reference in, Article I below) and TORONTO DOMINION
(TEXAS), INC. ("TD"), as administrative agent for the Lenders (in such
capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, the Parent, the Lenders, the Administrative
Agent, the Syndication Agent, the Documentation Agent and the Arranger are
all parties to the Amended and Restated Credit Agreement, dated as of August
15, 2000, as amended by the First Amendment to Credit Agreement, dated as of
September 30, 2000 (the "Existing Credit Agreement", and as amended by this
Amendment and as the same may be further amended, supplemented, amended and
restated or otherwise modified from time to time, the "Credit Agreement");
WHEREAS, the Borrower desires to modify certain provisions of the
Existing Credit Agreement and the Lenders are willing to so modify the
Existing Credit Agreement, but only on the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements contained herein, the parties hereto hereby covenant and agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Definitions. The following terms when used in
this Amendment shall have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"Administrative Agent" is defined in the preamble.
"Amendment" is defined in the preamble.
"Amendment Effective Date" is defined in Article III.
"Borrower" is defined in the preamble.
"Credit Agreement" is defined in the first recital.
"Existing Credit Agreement" is defined in the first recital.
SECTION 1.2. Other Definitions. Terms for which meanings are provided
in the Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.
ARTICLE II
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment Effective
Date, the provisions of the Existing Credit Agreement referred to below are
hereby amended in accordance with this Article II. Except as expressly so
amended, the Existing Credit Agreement shall continue in full force and
effect in accordance with its terms.
SECTION 2.1. Modification of Article I. Article I of the Existing
Credit Agreement is hereby amended in accordance with Sections 2.1.1 through
2.1.4.
SECTION 2.1.1. Section 1.1 of the Existing Credit Agreement is hereby
amended by inserting the following definition in such Section in the
appropriate alphabetical sequence:
"Amendment No. 2" means the Second Amendment to Credit
Agreement, dated as of November 14, 2000, to this Agreement.
"Co-Location Leases" means those certain leases between Bell
Atlantic, as Lessor, and the Borrower, as Lessee.
"Term A Loan Available Amount" means (a) for the period
commencing on April 1, 2001 and ending on June 30, 2001, $25, 000,000,
(b) for the period commencing on July 1, 2001 and ending on September
30, 2001, the sum of (i) $50,000,000 and (ii) the unused amount, if
any, of the amount set forth in the immediately preceeding clause (a),
and (c) during all other periods, zero, and in the case of clauses (a)
and (b) above, as such amounts may be reduced from time to time
pursuant to clause (b) of Section 2.2.2.
SECTION 2.1.2. Section 1.1 of the Existing Credit Agreement is hereby
further amended by amending the definition of "Fiscal Year" by deleting the
words "March 31" contained in the second and third line thereof and inserting
the words "December 31" in replacement therefor.
SECTION 2.1.3. Section 1.1 of the Existing Credit Agreement is hereby
further amended
by amending the definition of "Net Income" by deleting the word "and"
immediately prior to subparagraph (ii) therein and inserting "," in
replacement therefor and inserting the following at the end of subparagraph
(ii) thereof:
, and (iii) any cash gain or loss, not to exceed $1,200,000, accrued
and recognized in the Fiscal Quarter ended December 31, 2000, as a
result of any cancellation, termination or expiration of any kind of
the Co-Location Leases
SECTION 2.1.4. Section 1.1 of the Existing Credit Agreement is hereby
further amended by amending the definition of "Term A Loan Commitment
Termination Date" by deleting the words "June 30, 2001" contained in clause
(a) thereof and inserting the words "September 30, 2001" in replacement
therefor.
SECTION 2.2. Modification of Article II. Article II of the Existing
Credit Agreement is hereby amended in accordance with Sections 2.2.1 through
2.2.3.
SECTION 2.2.1. The second paragraph of Section 2.1.3 of the Existing
Credit Agreement is hereby amended and restated to read in its entirety as
follows:
In addition, from time to time on any Business Day occurring from
and after the Amendment Effective Date, but prior to the Term A Loan
Commitment Termination Date, each Lender that has a Term A Loan
Commitment agrees that it will make Term A Loans to the Borrower in an
amount equal to such Lender's Term A Percentage of the aggregate amount
of the Borrowing of Term A Loans requested by the Borrower to be made
on such day; provided that, in any event, the aggregate principal
amount of Term A Loans made after the Amendment Effective Date at any
one time outstanding shall not exceed the lesser of (a) the Term A Loan
Commitment Amount or (b) the Term A Loan Available Amount in effect at
such time. No amounts paid or prepaid with respect to Term Loans may
be reborrowed.
SECTION 2.2.2. Clause (b) of Section 2.2.2 of the Existing Credit
Agreement is hereby amended and restated to read in its entirety as follows:
(b) The Term A Loan Commitment Amount shall be zero on the Term
A Loan Commitment Termination Date; provided, however, that if the
Borrower shall have previously delivered a Borrowing Request in
accordance with Section 2.3 in respect of Borrowings of Term A Loans to
be made on the Term A Loan Commitment Termination Date, the mandatory
reduction of the Term A Loan Commitment Amount shall not take effect
until immediately after the making of such Term A Loans. Any optional
or mandatory reduction of the Term A Loan Commitment Amount pursuant to
the terms of this Agreement which reduces the Term A Loan Commitment
Amount below the Term A Loan Available Amount shall result in an
automatic and corresponding reduction of the Term A Loan Available
Amount to an aggregate amount not in excess of the Term A Loan
Commitment Amount, as so reduced, without any further action on the
part of any Lender. In addition, the Term A Loan Commitment Amount
shall, without any further action, automatically and permanently be
reduced on each date that Term A Loans are required to be prepaid (or
would have been required to be prepaid, if outstanding) with any Net
Casualty Proceeds, Net Debt Proceeds, Net Disposition Proceeds or Net
Equity Proceeds, in each case by the amount of such Proceeds.
SECTION 2.2.3. Section 2.3 of the Existing Credit Agreement is hereby
amended by deleting the first sentence thereof and inserting the following in
replacement therefor:
SECTION 2.3. Borrowing Procedure. By delivering a Borrowing
Request to the Administrative Agent on or before 12:00 noon on a
Business Day, the Borrower may from time to time irrevocably request,
on not less than one Business Day's notice in the case of Base Rate
Loans or three Business Days' notice in the case of LIBO Rate Loans,
and in either case not more than five Business Days' notice, that a
Borrowing be made in a minimum amount of $1,000,000 and an integral
multiple of $500,000 in the unused amount of the Revolving Loan
Commitment Amount, Letter of Credit Commitment Amount or Term A Loan
Available Amount, as the case may be.
SECTION 2.3. Modification of Article III. Article III of the Existing
Credit Agreement is hereby amended in accordance with Section 2.3.1.
SECTION 2.3.1. Clause (g) of Section 3.1.1 of the Existing Credit
Agreement is hereby amended by deleting the words "July 31" in the first line
thereof and inserting the words "April 30" in replacement therefor.
SECTION 2.4. Modification of Article VII. Article VII of the Existing
Credit Agreement is hereby amended in accordance with Sections 2.4.1 through
2.4.7.
SECTION 2.4.1. Clause (a) of Section 7.2.4 of the Existing Credit
Agreement is hereby amended by deleting the words "June 30, 2001" in the
second line thereof and inserting the words "March 31, 2002" in replacement
therefor.
SECTION 2.4.2. Subparagraph (ii) of clause (a) of Section 7.2.4 of the
Existing Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(ii) Minimum ALEs Installed and Billed. Neither the Borrower nor
the Parent will permit the aggregate number of ALEs installed and
billed as of the last day of any Fiscal Quarter set forth below to be
less than the amount set forth opposite such Fiscal Quarter:
Fiscal Quarter ALEs
March 31, 2000 260,000
June 30, 2000 300,000
September 30, 2000 350,000
December 31, 2000 390,000
March 31, 2001 430,000
June 30, 2001 470,000
September 30, 2001 530,000
December 31, 2001 580,000
March 31, 2002 630,000
SECTION 2.4.3. Subparagraph (iii) of clause (a) of Section 7.2.4 of
the Existing Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(iii) Minimum Revenue. Neither the Borrower nor the Parent will
permit the revenue received by the Consolidated Group as of the last
day of any Fiscal Quarter set forth below to be less than the amount
set forth opposite such Fiscal Quarter:
Fiscal Quarter Revenue
March 31, 2000 $40,000,000
June 30, 2000 $47,500,000
September 30, 2000 $49,500,000
December 31, 2000 $53,100,000
March 31, 2001 $59,800,000
June 30, 2001 $67,700,000
September30, 2001 $76,900,000
December 31, 2001 $88,700,000
March 31, 2002 $102,800,000
SECTION 2.4.4. Subparagraph (iv) of clause (a) of Section 7.2.4 of the
Existing Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(iv) Minimum Consolidated EBITDA. Neither the Borrower nor the
Parent will permit the Consolidated EBITDA as of the last day of any
Fiscal Quarter set forth below to be less than the amount set forth
opposite such Fiscal Quarter:
Period Consolidated EBITDA
March 31, 2000 ($5,400,000)
June 30, 2000 ($5,700,000)
September 30, 2000 ($9,500,000)
December 31, 2000 ($11,800,000)
March 31, 2001 ($10,300,000)
June 30, 2001 ($6,500,000)
September 30, 2001 ($3,100,000)
December 31, 2001 $3,200,000
March 31, 2002 $11,300,000
SECTION 2.4.5. Subparagraph (i) of clause (b) of Section 7.2.4 of the
Existing Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(i) Maximum Total Leverage Ratio. Neither the Parent nor the
Borrower will permit the Total Leverage Ratio as of the last day of any
Fiscal Quarter occurring during any period set forth below to be
greater than the ratio set forth opposite such period:
Period Total Leverage Ratio
07/01/01 through
(and including) 12/31/01 n/a
01/01/02 through
(and including) 03/31/02 6.00:1
04/01/02 through
(and including) 06/30/02 4.00:1
07/01/02 through
(and including) 09/30/02 4.00:1
10/01/02 through
(and including) 12/31/02 4.00:1
01/01/03 and thereafter 4.00:1
SECTION 2.4.6. Subparagraph (iii) of clause (b) of Section 7.2.4 of
the Existing Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(iii) Minimum Interest Coverage Ratio. Neither the Parent nor
the Borrower will permit the Interest Coverage Ratio as of the last day
of any Fiscal Quarter occurring during any period set forth below to be
less than the ratio set forth opposite such period:
Period Interest Coverage Ratio
07/01/01 through
(and including) 09/30/01 n/a
10/01/01 through
(and including) 12/31/01 n/a
01/01/02 through
(and including) 03/31/02 1.75:1
04/01/02 through
(and including) 06/30/02 1.75:1
07/01/02 through
(and including) 09/30/02 2.50:1
10/01/02 and thereafter 3.00:1
SECTION 2.4.7. Clauses (a) and (b) of Section 7.2.7 of the Existing
Credit Agreement are hereby amended and restated to read in their entirety as
follows:
(a) for that portion of the 2000 Fiscal Year remaining after the
Effective Date, $175,000,000, and (b) for each Fiscal Year thereafter,
the amount set forth below opposite such Fiscal Year:
Capital
Fiscal Year Expenditure Amount
2001 $110,000,000
2002 $75,000,000
2003 $120,000,000
2004 $110,000,000
2005 $115,000,000
2006 $110,000,000
2007 $110,000,000
2008 $140,000,000;
ARTICLE III
CONDITIONS TO EFFECTIVENESS
This Amendment and the amendments contained herein shall become
effective on the date (the "Amendment Effective Date") when each of the
conditions set forth in this Article III shall have been fulfilled to the
satisfaction of the Administrative Agent.
SECTION 3.1. Counterparts. The Administrative Agent shall have
received counterparts hereof executed on behalf of the Borrower, the Parent
and each of the Lenders.
SECTION 3.2. Amendment Fee. The Administrative Agent shall have
received, for the account of each Lender approving this Amendment, an
amendment fee in an amount equal to .20% of the aggregate amount of each such
Lender's Percentage of the aggregate Commitment Amount (after giving effect
to this Amendment).
SECTION 3.3. Affirmation and Consent. The Administrative Agent shall
have received, with counterparts for each Lender, an Affirmation and Consent
to this Amendment in form and substance satisfactory to the Administrative
Agent, duly executed and delivered by each of the Obligors other than the
Borrower.
SECTION 3.4. Opinion of Counsel. The Administrative Agent shall have
received an opinion, dated the Closing Date and addressed to the
Administrative Agent and all Lenders, from Ropes & Gray, special counsel to
the Obligors, in form and substance satisfactory to the Administrative Agent.
SECTION 3.5. Resolutions. The Administrative Agent shall have
received resolutions of the Board of Directors of the Borrower and the Parent
duly ratifying the execution, delivery and performance of this Amendment,
duly certified by an Authorized Officer as being in full force and effect
without amendment or modification, all in form and substance reasonably
satisfactory to the Administrative Agent.
SECTION 3.6. Legal Details, etc. All documents executed or submitted
pursuant hereto shall be satisfactory in form and substance to the
Administrative Agent and its counsel. The Administrative Agent and its
counsel shall have received all information and such counterpart originals or
such certified or other copies or such materials as the Administrative Agent
or its counsel may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment shall be satisfactory to the
Administrative Agent and its counsel.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Amendment, the
Borrower and the Parent hereby represent and warrant as follows:
SECTION 4.1. Representations and Warranties. In order to induce the
Lenders to execute and deliver this Amendment, the Borrower and the Parent
represent and warrant to the Agents, the Lenders and the Issuer that, after
giving effect to the terms of this Amendment, the following statements are
true and correct: (a) the representations and warranties set forth in Article
VI of the Existing Credit Agreement and in the other Loan Documents are true
and correct on the Amendment Effective Date as if made on the Amendment
Effective Date (unless stated to relate solely to an earlier date, in which
case such representations and warranties were true and correct in all
material respects as of such earlier date); and (b) no Default has occurred
and been continuing.
SECTION 4.2. Validity, etc. This Amendment constitutes the legal,
valid and binding obligation of the Borrower and the Parent, enforceable in
accordance with its terms subject to the effect of any applicable bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered
in a proceeding in equity or at law.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Cross References. References in this Amendment to any
article or section are, unless otherwise specified, to such article or
section of this Amendment.
SECTION 5.2. Loan Document Pursuant to Credit Agreement. This
Amendment is a Loan Document executed pursuant to the Existing Credit
Agreement and shall be construed, administered and applied in accordance with
all of the terms and provisions of the Existing Credit Agreement.
SECTION 5.3. Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
SECTION 5.4. Counterparts. This Amendment may be executed by the
parties hereto in several counterparts, all of which shall be deemed to be an
original and which shall constitute together but one and the same agreement.
SECTION 5.5. Expenses. The Borrower hereby agrees to pay to or
reimburse the Administrative Agent, upon demand, all of their reasonable
expenses in connection with the development, negotiation, preparation,
execution and closing of this Amendment, including all reasonable fees and
other charges of Mayer, Brown & Platt in connection therewith.
SECTION 5.6. Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers hereunder duly authorized as of
the date and year first above written.
CTC COMMUNICATIONS CORP.
By:________________________________
Title:
CTC COMMUNICATIONS GROUP, INC.
By:________________________________
Title:
TORONTO DOMINION (TEXAS), INC.,
as the Administrative Agent
By:________________________________
Title:
LEHMAN BROTHERS INC.,
as the Syndication Agent
By:________________________________
Title:
CREDIT SUISSE FIRST BOSTON,
as the Documentation Agent
By:________________________________
Title:
By:________________________________
Title:
TORONTO DOMINION (TEXAS), INC.,
as Lender
By:________________________________
Title:
CREDIT SUISSE FIRST BOSTON,
as Lender
By:________________________________
Title:
By:________________________________
Title:
LEHMAN BROTHERS INC.,
as Lender
By:________________________________
Title:
LEHMAN COMMERCIAL PAPER INC.,
as Lender
By:________________________________
Title:
SYNDICATED LOAN FUNDING
TRUST, as Lender
By:________________________________
Title:
ING (U.S.) CAPITAL LLC,
as Lender
By:________________________________
Title:
By:________________________________
Title:
CISCO SYSTEMS, INC.,
as Lender
By:________________________________
Title
RFC CAPITAL CORPORATION,
as Lender
By:________________________________
Title:
IBM CREDIT CORPORATION,
as Lender
By:________________________________
Title: