AMENDMENT NO. 1 TO THE
CREDIT AGREEMENT
Dated as of September 30, 1999.
AMENDMENT NO. 1 TO THE CREDIT AGREEMENT dated as of August 12, 1999, (the
"Credit Agreement"; the capitalized terms defined therein and not otherwise
defined herein being used herein as therein defined) among ICG Equipment, Inc.,
a Colorado corporation ("ICG Equipment"), ICG NetAhead, Inc., a Delaware
corporation ("ICG NetAhead" and, together with ICG Equipment, the "Borrowers"),
ICG Services, Inc., as Parent, certain Initial Lender Parties party thereto,
Morgan Stanley Senior Funding, Inc., as Sole Book-Runner and Lead Arranger,
Royal Bank of Canada, as Collateral Agent and as Administrative Agent for such
Lender Parties, and Bank of America, N.A. and Barclays Bank Plc, as
Co-Documentation Agents.
PRELIMINARY STATEMENT:
The Borrowers, the Parent, and the Required Lenders have agreed to amend
the Credit Agreement as hereinafter set forth.
SECTION 1. Amendments to Credit Agreement. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 2, hereby amended as follows:
(a) The definition of "EBITDA" in Section 1.01 is amended in full to read
as follows:
""EBITDA" means, with respect to any Person for any period, the
sum of the following, determined on a Consolidated basis without
duplication, in accordance with GAAP: (a) net income (or net loss) of
such Person and its Subsidiaries for such period plus (b) the sum of
the following (in each case, to the extent deducted in determining net
income) (i) income and franchise tax expenses of such Person and its
Subsidiaries, (ii) interest expense of such Person and its
Subsidiaries, (iii) amortization, depreciation and other non-cash
charges and (iv) any non-recurring extraordinary losses, less (c)
interest income of such Person and its Subsidiaries and any
non-recurring extraordinary gains (including, without limitation, with
respect to any person, any gain recognized as a result of any Add-Back
Amount (as such term is hereinafter defined) being subsequently
recognized as income on any statement of income of such Person). For
purposes of all EBITDA calculations for any Person relating to the
third fiscal quarter of 1999, an amount shall be added to net income
equal to the amount of any provision for uncollectable accounts
receivable which relate to tandem switching and common transport fees
made by such Person in its statement of income for such period;
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provided that such amount shall not, in any event, exceed $50,000,000
(the "Provision Add-Back Amount"). In addition, for purposes of all
EBITDA calculations for any Person relating to the third and fourth
fiscal quarters of 1999, all amounts billed for reciprocal
compensation relating to tandem switching and common transport fees
during such periods shall be considered as net income even if not
recognized as income on the statement of income of such Person for
such period (such amounts being the "Net Income Add-Back Amounts" and,
together with the Provision Add-Back Amount, the "Add-Back Amounts");
provided that the Net Income Add-Back Amounts shall not, in any event
exceed $20,000,000 in respect of the third fiscal quarter of 1999 and
$25,000,000 in respect of the fourth fiscal quarter of 1999."
(b) The definition of "Revenue" in Section 1.01 is amended in full to read
as follows:
""Revenue" means, for any period, Consolidated revenues of ICG
and its Subsidiaries for such period as determined on a Consolidated
basis in accordance with GAAP. For the purpose of all calculations of
Revenue for the third and fourth fiscal quarters of 1999, Revenue
shall also include all amounts billed for reciprocal compensation
relating to tandem switching and common transport fees during such
periods even if not recognized as revenue on any statement of income
for such periods; provided that such amounts shall not exceed
$20,000,000 for the third fiscal quarter of 1999 and $25,000,000 for
the fourth fiscal quarter of 1999. Any item included as Revenue by
reason only of the immediately preceding sentence shall not, if
subsequently recognized as revenue in any statement of income of such
person, be considered as Revenue."
SECTION 2. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when, and only when, the Lead
Arranger shall have received counterparts of this Amendment executed by the
Borrowers, the Parent, and the Required Lenders or, as to any of the Required
Lender Parties, advice satisfactory to the Lead Arranger that such Lender Party
has executed this Amendment.
SECTION 3. Representations and Warranties of the Borrower. The Parent and
each Borrower represent and warrant as follows:
(a) Each Loan Party and each of its Subsidiaries (i) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, (ii) is duly qualified and in good standing
as a foreign corporation in each other jurisdiction in which it owns or leases
property or in which the conduct of its business requires it to so qualify or be
licensed except where the failure to so qualify or be licensed could not be
reasonably likely to have a Material Adverse Effect and (iii) has all requisite
corporate power and authority (including, without limitation, all governmental
licenses, permits and other approvals) to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to be
conducted.
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(b) The execution, delivery and performance by each Loan Party of this
Amendment and the Transaction Documents as amended hereby, to which it is or is
to be a party, are within such Loan Party's corporate powers, have been duly
authorized by all necessary corporate action, and do not (i) contravene such
Loan Party's charter or bylaws, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of the
Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) conflict with or result in the breach of, or
constitute a default or require any payment to be made under, any contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
properties in such a manner as would be reasonably likely to have a Material
Adverse Effect or (iv) except for the Liens created under the Transaction
Documents, result in or require the creation or imposition of any Lien upon or
with respect to any of the properties of any Loan Party or any of its
Subsidiaries. No Loan Party or any of its Subsidiaries is in violation of any
such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or in breach of any such contract, loan agreement,
indenture, mortgage, deed of trust, lease or other instrument, the violation or
breach of which could be reasonably likely to have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for the due execution, delivery or performance by any Loan
Party party of this Amendment or any of the Transaction Documents, as amended
hereby, to which it is or is to be a party.
(d) This Amendment has been duly executed and delivered by the Parent and
the Borrowers. This Amendment and each of the other Transaction Documents, as
amended hereby, to which any Loan Party is a party are legal, valid and binding
obligations of each Loan Party thereto, enforceable against such Loan Party in
accordance with their respective terms.
(e) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any Environmental
Action, pending or threatened before any court, governmental agency or
arbitrator that (i) could be reasonably likely to have a Material Adverse Effect
or (ii) purports to affect the legality, validity or enforceability of this
Amendment or any of the other Transaction Documents as amended hereby.
(f) The representations and warranties set forth in each of the Transaction
Documents are correct on and as of this date, before and after giving effect to
this Amendment, as though made on and as of such date.
(g) No event has occurred and is continuing that constitutes a Default.
SECTION 4. Reference to and Effect on the Credit Agreement, the Notes and
the Transaction Documents. (a) On and after the effectiveness of this Amendment,
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and each
reference in the Notes and each of the other Transaction 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 Amendment.
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(b) The Credit Agreement, the Notes and each of the other Transaction
Documents, as specifically amended by this Amendment, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Transaction
Documents, in each case as amended by this Amendment.
(c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or
remedy of any Lender or the Agents under any of the Transaction Documents, nor
constitute a waiver of any provision of any of the Transaction Documents.
SECTION 5. Consent of the Parent. The Parent, as guarantor under the Parent
Guaranty, hereby consents to this Amendment and hereby confirms and agrees that
notwithstanding the effectiveness of this Amendment, the Parent Guaranty is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects, except that, on and after the effectiveness of this
Amendment, each reference in the Parent Guaranty to the "Credit Agreement",
"thereunder", "thereof" or words of like import shall mean and be a reference to
the Credit Agreement, as amended by this Amendment.
SECTION 6. Costs and Expenses. The Borrowers agree jointly and severally to
pay on demand all reasonable costs and expenses of the Lead Arranger in
connection with the preparation, execution, delivery and administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder (including, without limitation, the
reasonable fees and expenses of counsel for the Lead Arranger) in accordance
with the terms of Section 9.04 of the Credit Agreement.
SECTION 7. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute but one and the same agreement. Delivery
of an executed counterpart of a signature page to this Amendment by telecopier
shall be effective as delivery of a manually executed counterpart of this
Amendment.
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SECTION 8. 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 thereunto duly authorized,
as of the date first above written.
ICG EQUIPMENT, INC., as Borrower
By /s/ Don Teague
-------------------------------------
Title:
ICG NETAHEAD, INC., as Borrower
By /s/ Don Teague
-------------------------------------
Title:
ICG SERVICES, INC., as Parent Guarantor
By /s/ Don Teague
-------------------------------------
Title:
MORGAN STANLEY SENIOR FUNDING, INC.,
as Sole Book-Runner, Lead Arranger and
Lender Party
By /s/ T. Morgan Edwards II
-------------------------------------
Title: Vice President
ROYAL BANK OF CANADA,
as Administrative Agent, Collateral
Agent and Lender Party
By /s/ K. K. Cornwell
-------------------------------------
Title: Managing Director
BANK OF AMERICA, N.A.,
as Co-Documentation Agent and Lender
Party
By /s/ Julie A. Schell
-------------------------------------
Title: Vice President
BARCLAYS BANK PLC
as Co-Documentation Agent and Lender
Party
By /s/ Daniele Jacovone
-------------------------------------
Title: Associate Director
Initial Lenders
PARIBAS, LOS ANGELES AGENCY
By /s/ Darlynn Ernst Kitchner/Thomas G.Brandt
-------------------------------------------
Title: Vice President/Director
FINOVA CAPITAL CORPORATION
By /s/ Jeffrey S. Kilrey
-------------------------------------
Title: Senior Vice President
FIRST UNION NATIONAL BANK
By /s/ Mark L. Cook
-------------------------------------
Title: Senior Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
By /s/ John P. Waters
-------------------------------------
Title: Senior Vice President
IBM CREDIT
By /s/ Thomas Curcio
-------------------------------------
Title: Manager of Credit
STEIN ROE FLOATING RATE LIMITED
LIABILITY COMPANY
By
-------------------------------------
Title:
STEIN ROE AND FARNHAM INCORPORATED
AS AGENT FOR KEYPORT LIFE INSURANCE
COMPANY
By
-------------------------------------
Title:
STEIN ROE FARNHAM CLO 1 LTD.
By: Stein Roe & Farnham Incorporated
as Portfolio Manager
By
-------------------------------------
Title:
PILGRIM PRIME RATE TRUST
By: Pilgrim Investment, Inc., as its
investment manager
By /s/ Michael Prince
-------------------------------------
Title: Vice President
KZH HIGHLAND-2 LLC
By /s/ V. Conway
-------------------------------------
Title: Authorized Agent
BANK OF MONTREAL
By /s/ Eric Scotfield
-----------------------------------------
Title: Director, Leveraged Debt Mangement
FRANKLIN FLOATING RATE TRUST
By
-------------------------------------
Title:
ELT LTD.
By
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Title: