THIRD AMENDMENT TO CREDIT AGREEMENT
THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
March 6, 2001, among USOL HOLDINGS, INC., a corporation organized and existing
under the laws of the State of Oregon ("Holdings"), USOL, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Borrower"),
the financial institutions from time to time party to the Credit Agreement
referred to below (each, a "Bank" and collectively, the "Banks"), BNP PARIBAS
(f/k/a PARIBAS), as Administrative Agent (in such capacity, the "Administrative
Agent"), BNP PARIBAS (f/k/a PARIBAS), as Syndication Agent (in such capacity,
the "Syndication Agent") and DEUTSCHE BANK AG, NEW YORK BRANCH, as Documentation
Agent (in such capacity, the "Documentation Agent"). All capitalized terms used
herein and not otherwise defined herein shall have the respective meanings
provided such terms in the Credit Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower, Holdings, the Banks, the Administrative Agent,
the Syndication Agent and the Documentation Agent are parties to a Credit
Agreement, dated as of December 30, 1999 (as amended, modified and/or
supplemented to, but not including, the date hereof, the "Credit Agreement");
and
WHEREAS, subject to the terms and conditions of this Amendment, the
parties hereto wish to amend the Credit Agreement as herein provided;
NOW, THEREFORE, it is agreed:
I. Amendments to Credit Agreement.
1. Section 3.02(A)(c) of the Credit Agreement is hereby amended by deleting the
table appearing in said Section and inserting the following new table in lieu
thereof:
"Scheduled Repayment Dates Percentage
The Quarterly Payment Date ended March 31, 2003 1.00%
Each Quarterly Payment Date occurring during the 2.00%
9 month period commencing on April 1, 2003
Each Quarterly Payment Date occurring 3.25%
during the 12 month period commencing
on January 1, 2004
Each Quarterly Payment Date occurring 5.50%
during the 12 month period commencing
on January 1, 2005
Each Quarterly Payment Date occurring 6.75%
during the 12 month period commencing
on January 1, 2006
Each Quarterly Payment Date occurring 7.75%"
during the 12 month period commencing
on January 1, 2007
2. Section 8.08 of the Credit Agreement is hereby amended by (i) inserting the
text "(a)" immediately prior to the text "Holdings will not" appearing at the
beginning of said Section, (ii) deleting the text "$450" appearing in said
Section and inserting the text "$550" in lieu thereof, (iii) deleting the text
"8.08(I)" appearing in said Section and inserting the text "8.08(a)(I)" in lieu
thereof, (iv) deleting each reference to the text "8.08(II)" appearing in said
Section and inserting the text "8.08(a)(II)" in lieu thereof and (v) inserting
the following new clause (b) at the end of said Section:
"(b) Notwithstanding anything to the contrary set forth in
clause (a) above, the aggregate amount of Capital Expenditures
related to Telephony Passings shall not exceed, during any
period or fiscal year set forth below, the amount set forth
below opposite such date:
Fiscal Year Ended Amount
----------------- ------
January 1, 2000 -
December 31, 2001 $ 4,000,000
December 31, 2002 $ 1,750,000
January 1, 2003 and thereafter $ 500,000"
3. Section 8.10 of the Credit Agreement is hereby amended by deleting said
Section in its entirety and inserting the following new Section 8.10 in lieu
thereof:
"8.10 Interest Coverage. Holdings will not permit the ratio of
its Consolidated EBITDA to its Net Consolidated Interest
Expense for any period of four consecutive fiscal quarters
ending on the last day of a fiscal quarter of Holdings, in
each case taken as one accounting period, to be less than the
ratio set forth opposite such date below:
Fiscal Quarter Ended Ratio
-------------------- -----
December 31, 2002 0.90:1.00
March 31, 2003 1.75:1.00
June 30, 2003 2.00:1.00
September 30, 2003 2.25:1.00
December 31, 2003 2.25:1.00
March 31, 2004 2.75.1.00
June 30, 2004 2.75:1.00
September 30, 2004 3.00:1.00
December 31, 2004 3.00:1.00
March 31, 2005 and thereafter 3.50:1.00"
4. Section 8.11 of the Credit Agreement is hereby amended by deleting said
Section in its entirety and inserting the following new Section 8.11 in lieu
thereof:
"8.11 Leverage Ratios. Holdings will not permit the ratio of
Consolidated Indebtedness as at the end of any fiscal quarter
ended on the date set forth below to Annualized Consolidated
EBITDA for such fiscal quarter, in each case taken as one
accounting period, ending on the date set forth below to be
greater than the ratio set forth opposite such date below:
Fiscal Quarter Ended Ratio
-------------------- -----
December 31, 2002 12.00:1.00
March 31, 2003 6.00:1.00
June 30, 2003 5.50:1.00
September 30, 2003 5.50:1.00
December 31, 2003 5.00:1.00
March 31, 2004 4.00:1.00
June 30, 2004 4.00:1.00
September 30, 2004 4.00:1.00
December 31, 2004 4.00:1.00
March 31, 2005 and thereafter 3.00:1.00"
5. Section 8 of the Credit Agreement is hereby amended by inserting the
following new Sections 8.20, 8.21 and 8.22 at the end of said Section:
"8.20 Minimum Cable Passings. Holdings will not permit, and
will cause each of its Subsidiaries (other than Residentclub)
not to permit, the number of Cable Passings at the end of any
period ended on or after a date set forth below to be less
than the number of Cable Passings set forth opposite such date
set forth below:
Fiscal Quarter Ended Amount
-------------------- ------
March 31, 2001 27,500
June 30, 2001 31,500
September 30, 2001 36,500
December 31, 2001 41,000
March 31, 2002 46,000
June 30, 2002 50,000
September 30, 2002 54,000
December 31, 2002 55,000
8.21 Minimum Revenues. Holdings will not permit, and will
cause each of its Subsidiaries (other than Residentclub) not
to permit, its Consolidated Revenues for any fiscal quarter
ended on a date set forth below to be less than the number set
forth below opposite such date set forth below:
Fiscal Quarter Ended Amount
-------------------- ------
March 31, 2001 $2,800,000
June 30, 2001 $3,100,000
September 30, 2001 $3,600,000
December 31, 2001 $4,100,000
March 31, 2002 $4,800,000
June 30, 2002 $5,300,000
September 30, 2002 $5,900,000
December 31, 2002 $6,400,000
March 31, 2003 $7,000,000
June 30, 2003 $7,100,000
September 30, 2003 $7,200,000
December 31, 2003 $7,400,000
8.22 Minimum Consolidated EBITDA. Holdings will not permit,
and will cause each of its Subsidiaries (other than
Residentclub) not to permit, its Consolidated EBITDA for any
fiscal quarter ended on a date set forth below to be less than
the number set forth below opposite such date set forth below:
Fiscal Quarter Ended Amount
-------------------- ------
March 31, 2001 $(1,300,000)
June 30, 2001 $(1,200,000)
September 30, 2001 $(900,000)
December 31, 2001 $(600,000)
March 31, 2002 $(300,000)
June 30, 2002 $0
September 30, 2002 $200,000
December 31, 2002 $400,000"
6. The definition of Applicable Commitment Commission Percentage appearing in
Section 10 of the Credit Agreement is hereby amended by deleting said definition
in its entirety and inserting the following new definition in lieu thereof:
"Applicable Commitment Commission Percentage" shall mean, for
any day, a percentage per annum equal to (i) if the Unutilized
Commitment on such day is greater than or equal to 66-2/3% of
the Total Commitment (as of the Effective Date), 1.375%, (ii)
if the Unutilized Commitment on such day is less than 66-2/3%
of the Total Commitment (as of the Effective Date) and greater
than or equal to 33-1/3% of the Total Commitment (as of the
Effective Date), 1.125%, and (iii) if the Unutilized
Commitment on such day is less than 33-1/3% of the Total
Commitment (as of the Effective Date), 0.625% of the
Unutilized Commitment."
7. The definition of Applicable Margin appearing in Section 10 of the Credit
Agreement is hereby amended by (i) deleting the text "2.75%" appearing in clause
(i) of said definition and inserting the text "3.00%" in lieu thereof and (ii)
deleting the text "3.75%" appearing in clause (ii) of said definition and
inserting the text "4.00%" in lieu thereof.
8. The definition of Borrowing Base appearing in Section 10 of the Credit
Agreement is hereby amended by deleting the text "$675" appearing in clause (x)
of said definition and inserting the text "$750" in lieu thereof.
9. The definition of Cable Television Debt appearing in Section 10 of the Credit
Agreement is hereby amended by deleting said definition in its entirety and
inserting the following new definition in lieu thereof:
"Cable Television Debt" shall mean the following:
Period Amount
Third Amendment Effective Date -
December 31, 2002 $750
January 1, 2003 - December 31, 2003 $675
January 1, 2004 - December 31, 2004 $600
January 1, 2005 - December 31, 2005 $500
January 1, 2006 and thereafter $400
10. The definition of Debt Base appearing in Section 10 of the Credit Agreement
is hereby amended by deleting the text ", less (z) any Indebtedness outstanding"
appearing immediately prior to the period in said definition.
11. The definition of Telephone Debt appearing in Section 10 of the Credit
Agreement is hereby amended by deleting said definition in its entirety and
inserting the following new definition in lieu thereof:
"Telephone Debt" shall mean the following:
Period Amount
Third Amendment Effective Date -
December 31, 2002 $450
January 1, 2003 - December 31, 2003 $400
January 1, 2004 - December 31, 2004 $300
January 1, 2005 and thereafter $200
12. Section 10 of the Credit Agreement is hereby amended by the deleting the
definitions of "Adjusted Consolidated EBITDA" and "Annualized Adjusted
Consolidated EBITDA" appearing in said Section and inserting the following new
definitions in alphabetical order:
"Consolidated Revenues" shall mean, for any period, the total
consolidated gross revenues of Holdings and its Subsidiaries
for such period determined on a consolidated basis, including,
without limitation, revenues related to the provision of cable
television services, telephony services and all other related
services, in any event calculated in accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, consistently applied during a
relevant period.
"Third Amendment" shall mean that certain Third Amendment to
Credit Agreement, dated as of February __, 2001, among the
Borrower, Holdings, the Administrative Agent, the Syndication
Agent, the Documentation Agent and the Banks party thereto.
"Third Amendment Effective Date" shall have the meaning
provided in the Third Amendment.
II. Miscellaneous Provisions.
1. In order to induce the Banks to enter into this Amendment, the
Borrower hereby represents and warrants that:
(a) no Default or Event of Default exists as of the Third Amendment
Effective Date, both immediately before and immediately after giving effect to
this Amendment; and
(b) all of the representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct in all material
respects on the Third Amendment Effective Date both immediately before and
immediately after giving effect to this Amendment, with the same effect as
though such representations and warranties had been made on and as of the Third
Amendment Effective Date (it being understood that any representation or
warranty made as of a specific date shall be true and correct in all material
respects as of such specific date).
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of, or consent to, any other provision of the
Credit Agreement or any other Credit Document.
3. This Amendment may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "Third
Amendment Effective Date") when each of the following conditions shall have been
satisfied:
(i) the Administrative Agent shall have received from Jenkens
& ▇▇▇▇▇▇▇▇▇ P.C., special New York counsel to the Credit Parties, an
opinion addressed to the Administrative Agent, the Collateral Agent and
each of the Banks and dated the Third Amendment Effective Date in form
and substance satisfactory to the Administrative Agent, and covering
such matters incident to this Amendment as the Administrative Agent may
reasonably request;
(ii) the Borrower shall have paid to the Administrative Agent
the Amendment Fee and such other fees as may have been otherwise agreed
to in writing among such parties; and
(iii) the Borrower, Holdings, each Guarantor and the Required
Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of
facsimile transmission) the same to the Administrative Agent as its
Notice Office.
6. By executing and delivering a copy hereof, each Credit Party hereby
agrees that all Loans shall be fully guaranteed pursuant to the Guaranties in
accordance with the terms and provisions thereof and shall be fully secured
pursuant to the Pledge Agreement and the Security Agreement.
7. From and after the Third Amendment Effective Date, all references in
the Credit Agreement and each of the other Credit Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement as modified
hereby.
8. The Borrower hereby covenants and agrees that, so long as the Third
Amendment Effective Date occurs, it shall pay to each Bank which executes and
delivers to the Administrative Agent (or its designee) a counterpart hereof by
the later to occur of (x) the close of business on the Third Amendment Effective
Date or (y) 5:00 p.m. (New York City time) on February __, 2001 (such later
date, the "Outside Date"), or which is an immediate or successive assignee of
any Bank described above (with respect to amounts obtained, directly or
indirectly, by assignment of such Bank), a non-refundable cash fee (the
"Amendment Fee") in an amount (in U.S. dollars) equal to 50 basis points (0.50%)
of the Total Commitment (as of the Effective Date), which Amendment Fee shall
not be subject to counterclaim or set-off for, or be otherwise affected by, any
claim or dispute relating to any other matters and shall be paid by the Borrower
to the Administrative Agent for distribution to the Banks no later than the
[second] Business Day following the Outside Date.
9. In addition to the representations and warranties made pursuant to
preceding Section 1, and in order to induce the Banks to enter into this
Amendment, the Borrower hereby represents and warrants that (i) attached hereto
are updated Schedules to the Credit Agreement, which Schedules attached hereto
are in each case true and correct (based upon the representations and warranties
made in the Credit Agreement) as if such Schedules were prepared, and
representation and warranty were made, as of the Third Amendment Effective Date
and (ii) attached hereto are revised Annexes to the Security Agreement and
Pledge Agreement which correspond to the Annexes attached to the Security
Agreement and Pledge Agreement, which Annexes attached hereto are in each case
true and correct (based upon the representations and warranties contained in the
Security Agreement or Pledge Agreement, as the case may be) as if the respective
Annexes were prepared, and representation and warranty were made, as of the
Third Amendment Effective Date.
* * *
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Amendment as of the date first
above written.
USOL, INC.,
as Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CEO
BNP PARIBAS,
as Administrative Agent,
Syndication Agent and
individually, as Bank
By: /s/ Soloe Aizenberg
-----------------------------------
Name: Soloe Aizenberg
Title: Director
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Documentation Agent and
individually, as Bank
By: /s/
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Director
By: /s/
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Associate
COAST BUSINESS CREDIT, as Bank
By: /s/
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Each of the undersigned, each being a Guarantor under, and as defined
in, the Credit Agreement referenced in the foregoing Amendment, hereby consents
to the entering into of the Amendment and agrees to the provisions thereof
(including, without limitation, Section 6 and 7 of Part II thereof).
USOL HOLDINGS, INC.,
as Guarantor
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: CEO
[NAME OF SUBSIDIARY GUARANTOR],
as Guarantor
By:
-----------------------------------
Name:
Title:
