FIRST AMENDMENT, dated as of
December 3, 1999 (this "Amendment"), to the
Credit Agreement, dated as of June 3, 1999
(as amended, supplemented or otherwise
modified from time to time, the ("Credit
Agreement"), among RCN CORPORATION, (the
"Company") RCN TELECOM SERVICES OF
PENNSYLVANIA, INC., RCN CABLE SYSTEMS, INC.,
JAVANET, INC., RCN FINANCIAL MANAGEMENT,
INC., UNET HOLDING, INC., INTERPORT
COMMUNICATIONS CORP. and ENET HOLDING,
INC. (collectively, the "Borrowers"), the
LENDERS party thereto, and THE CHASE
MANHATTAN BANK, as Administrative Agent
and Collateral Agent.
WHEREAS, pursuant to the credit Agreement, the Lenders
have agreed to make certain loans to the Borrowers;
and
WHEREAS the Company and the Borrowers have requested
that certain provisions of the Credit Agreement be modified in
the manner provided for in this Amendment, and the Lenders are
willing to agree to such modifications as provided for in this
Amendment.
NOW, THEREFORIE, the parties hereto hereby agree as
follows:
1. Defined Terms. Capitalized terms used and not
defined herein shall have the meanings given to them in the
Credit Agreement, as amended hereby.
2. Amendments to the Credit Amendments.
(a) The definition of the term "Change in Control" in
Section 1.01 of the Credit Agreement is hereby amended by
deleting the word "and" immediately prior to the reference to
"Xxxxx XxXxxxx" and inserting a comma in place thereof and by
inserting, immediately after the reference to "Xxxxx XxXxxxx",
the following: "or Xxxx X. Xxxxx and his Controlled Affiliates
(including, for so long as it is so Controlled, Vulcan Ventures
Incorporated)".
(b) Section 6.12 of The Credit Agreement is hereby
amended by deleting paragraphs (e), (f), (g), (h), W, W and (1)
therefrom in their entirety and substituting for each such
paragraph the following paragraph having the same designation:
"(e) Minimum Consolidated Revenue. Permit Consolidated
Revenue for any period of four consecutive fiscal quarters ending
on a date set forth below to be less than the amount set forth
opposite such date:
Fiscal Quarter Minimum
Ending Consolidated Revenue
------------------ --------------------
December 31, 1999 $270,000,000
March 31, 2000 300,000,000
June 30, 2000 320,000,000
September 30, 2000 340,000,000
December 31, 2000 365,000,000
March 31, 2001 385,000,000
June 30, 2001 410,000,000
September 30, 2001 450,000,000
December 31, 2001 495,000'000"
"(f) Minimum On-Net Connections. Permit On-Net
Connections at the end of any fiscal quarter ending on a date set
forth below to be less than the number set forth opposite such
date;
Fiscal Quarter Minimum
Ending On-Net Connections
------------------ ------------------
December 31, 1999 200,000
March 31, 2000 210,000
June 30, 2000 230,000
September 30, 2000 270,000
December 31, 2000 335,000
March 31, 2001 400,000
June 30, 2001 525,000
September 30, 2001 650,000
December 31, 2001 770,000"
"(g) Maximum Cumulative Negative EBITDA. Permit cumulative
negative EBITDA from the period commencing with the first day of
the first fiscal quarter ending on or after the date of this
Agreement to the last day of each fiscal quarter ending during a
period set forth below to exceed (i.e., be a greater negative
number than) the amount set forth below for such period:
Maximum
Cumulative
Negative
Period EBITDA
----------------------------------------- -------------
June 30, 1999 through December 31, 1999 -$150,000,000
January 1, 2000 through December 31, 2001 -$320,000,000"
"(h) Minimum Annualized EBITDA. Permit Annualized
EBITDA determined as of any date set forth below to be less
than the amount set forth opposite such date below:
Minimum
Annualized
Date EDITDA
----------------------- ------------
March 31, 2002 $15,000,000
June 30, 2002 $40,000,000
September 30, 2002 $100,000,000"
"(i) Maximum Senior Secured Debt to Annualized EBITDA.
Permit the ratio of W Senior Secured Debt outstanding on any
day from and including (A) the last day of any fiscal
quarter ending on the dates or during the periods set forth
below through (B) the day immediately preceding the last day
of the immediately following fiscal quarter to (ii)
Annualized EBITDA determined as of the date referred to in
clause (i)(A) above to exceed the ratio set forth below
opposite such date or period:
Fiscal Quarter
ENDING Maximum Ratio
--------------------------- -------------
December 31, 2002 5.00 to I
March 31, 2003 5.00 to I
June 30, 2003 3.50 to 1
July 1, 2003 and 3.00 to 1"
thereafter
"(k) Interest Coverage Ratio. Permit the ratio of
(i) Annualized EBITDA determined as of the last day of
any fiscal quarter ending on the dates or in the years
set forth below to (ii) Annualized Cash Interest Expense
determined as of the last day of such fiscal quarter to be
less than the ratio set forth below opposite such date or
period:
Fiscal Quarter Ending on
or During Minimum Ratio
------------------------------------- --------------
June 30, 2002 1.25 to 1
September 30,2002 1.25 to 1
December 31,2002 1-25 to 1
Fiscal Year ending December 31,2003 1.50 to 1
Fiscal Year ending December 31,2004 1-75 to 1
Fiscal Year ending December 31,2005 2-00 to 1
Fiscal Year ending December 31,2006 2.00 to 1
Fiscal Year ending December 31,2007 2.00 to 1"
"(1) Minimum Fixed Charge Coverage Ratio. Permit the
ratio of (i) Annualized EBITDA determined as of the last day of
any fiscal quarter ending on or after June 30, 2002 to (ii)
Annualized Fixed Charges determined as of such date to be less
than 1.00 to I in respect of any such fiscal quarter ending at
any time from k7une 30, 2002 to and including September 30, 2002
and 1.20 to 1 in respect of any such fiscal quarter ending
thereafter."
3. No Other Amendments; Confirmation. Except as
expressly amended hereby, the provisions of the Credit Agreement
are and shall remain in full force and effect.
4. Representations and Warranties. The Company and the
Borrowers hereby represent and warrant to the Administrative
Agent and the Lenders that, as of the date hereof:
(a) No Default or Event of Default has occurred and
is continuing.
(b) The execution, delivery and performance by the
Company and the Borrowers of this Amendment have been duly
authorized by all necessary corporate and other action and
do not and will not require any registration with, consent
or approval of, notice to or action by, any person
(including any Governmental Authority) in order to be
effective and enforceable. The Credit Agreement as amended
by this Amendment constitutes the legal, valid and binding
obligation of the Company and the Borrowers, enforceable
against each in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a
proceeding in equity or at law.
(c) All representations and warranties of each Loan
Party set forth in the Loan Documents are true and correct
in all material respects-
5. Conditions Precedent to Effectiveness. This
Amendment shall become effective when the Agent shall have
received counterparts hereof duly executed and delivered by the
Company, the Borrowers and the Required Lenders (the "Effective
Date").
6. Conditions Subsequent to Continued Effectiveness.
In the event that (i) the Company has not, prior to December 3,
2000, received cash proceeds of not less then $1,650.000.00
from the issuance and sale to Xxxx Xxxxx or his Controlled
Affiliates, including. for so long as it is so controlled,
Vulcan Ventures Incorporated ("Vulcan"), of shares of
mandatorily convertible preferred stock of the Company (the
"Vulcan Preferred") or (ii) the agreement between the Company
and Vulcan for the issuance and sale of the Vulcan Preferred is
terminated prior to the consummation of such issuance and sale,
this Amendment shall cease to be effective for all purposes with
the same effect as if it had never become effective.
7. Expenses. The Borrowers agree to reimburse the
Agent for its out-of-pocket expenses in connection with this
Amendment, including the reasonable fees, charges and
disbursements of Cravath, Swaine & Xxxxx, counsel for the Agent.
8. Governing Law; Counterparts.(a) This Amendment
and the rights and obligations of the parties hereto shall be
governed by, and construed and interpreted in accordance with,
the laws of the State of New York.
(b) This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate
counterparts, and all of said counterparts taken together shall
be deemed to constitute one and the same instrument. This
Amendment may be delivered by facsimile transmission of the
relevant signature pages hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their duly authorized
officers as of the day and year first above written.
RCN CORPORATION,
by /s/ Xxxxx X. Xxxxxxx
_________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
RCN TELECOM SERVICES OF
PENNSYLVANIA, INC.
by /s/ Xxxxx X. Xxxxxxx
_________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
RCN CABLE SYSTEMS, INC.,
by /s/ Xxxxx X. Xxxxxxx
_________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
JAVA NET, INC.,
by /s/ Xxxxx X. Xxxxxxx
_________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
RCN FINANCIAL MANAGEMENT, INC.,
by /s/ Xxxxx X. Xxxxxxx
_________________________
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
