Execution Copy
EXHIBIT 10.1
SECOND STANDSTILL AGREEMENT AND CONDITIONAL AMENDMENT
TO THE CREDIT AGREEMENT
SECOND STANDSTILL AGREEMENT and Conditional Amendment TO THE CREDIT
AGREEMENT, dated as of July 30, 2004 (this "AGREEMENT"), to the Third Amended
and Restated Credit Agreement, dated as of September 13, 2002, as amended by a
Letter Amendment and Waiver dated as of November 12, 2002, a Second Amendment
dated as of May 5, 2004, a Third Amendment dated as of May 12, 2004, a Fourth
Amendment dated as of May 25, 2004 and a Standstill Agreement and Conditional
Amendment to the Credit Agreement (the "FIRST STANDSTILL AMENDMENT") dated as of
June 30, 2004 (as so amended, the "CREDIT AGREEMENT"), among CHOICE ONE
COMMUNICATIONS INC., a Delaware corporation (the "GUARANTOR"), the subsidiaries
of the Guarantor listed on the signature pages hereto (each a "BORROWER" and
collectively the "BORROWERS"), the banks, financial institutions and other
institutional lenders parties to the Credit Agreement defined above
(collectively, the "LENDERS"), General Electric Capital Corporation, as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT"), collateral
agent and syndication agent for the Lenders, and the other agents signatories
hereto.
PRELIMINARY STATEMENTS
1. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement, as amended by this Agreement.
2. Pursuant to the Credit Agreement, the Lenders have agreed to make,
and have made, certain Loans and other extensions of credit to the Borrowers.
3. Pursuant to Section 2.6 of the Credit Agreement (including after
giving effect to the First Standstill Amendment), on July 30, 2004, the
Borrowers are obligated to pay to the Revolving Credit Lenders outstanding
Revolving Credit Loans in the principal amount listed on Schedule I hereto (the
"REQUIRED REVOLVING LOAN PAYMENT").
4. Pursuant to Section 4.3 of the Credit Agreement (including after
giving effect to the First Standstill Amendment), on July 30, 2004, the
Borrowers are obligated to pay to the Term A Lenders, the Term B Lenders, and
the Term D Lenders outstanding Term A Loans, Term B Loans and Term D Loans
respectively, in the principal amounts listed on Schedule I hereto
(collectively, the "REQUIRED TERM LOAN PAYMENTS", and together with the Required
Revolving Loan Payments, the "REQUIRED PRINCIPAL PAYMENTS").
5. Pursuant to Section 5.1(e) of the Credit Agreement (including after
giving effect to the First Standstill Amendment), on July 30, 2004, the
Borrowers are obligated to pay to the Lenders interest on the outstanding LIBOR
Rate Loans in such amounts listed on Schedule II
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hereto (collectively, the "REQUIRED INTEREST PAYMENTS", and together with the
Required Principal Payments, the "REQUIRED PAYMENTS").
6. In order to permit the Borrowers, the Guarantor and the Lenders time
to implement a possible restructuring of the indebtedness of the Borrowers and
the Guarantor, the Borrowers and the Guarantor have requested that either (a)
all Lenders consent to an amendment to the Credit Agreement that would postpone
the date on which the Required Payments are required to be made from July 30,
2004 (the "REQUIRED PAYMENT DATE") to August 30, 2004 or (b) the Required
Lenders agree to forebear from exercising any rights or remedies that they may
have under the Credit Agreement and the Loan Documents as a result of the
Borrowers not making the Required Payments on the Required Payment Date until
August 30, 2004, in each case, on and subject to the terms and conditions set
forth below.
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendment to Credit Agreement. Upon and subject to the
occurrence (and only the occurrence) of the Amendment Effective Date (as defined
in Section 4 below), the Credit Agreement (including after giving effect to the
First Standstill Amendment) is hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is amended as set forth in
Section 2(d)(i) below.
(b) Section 2.6(a) of the Credit Agreement is amended by amending and
restating in its entirety the last sentence of such Section to read as follows:
"Notwithstanding the foregoing, the permanent reduction of the Revolving Credit
Commitment that, but for the terms of this sentence, would otherwise be required
to occur on July 30, 2004, shall be required to occur instead on August 30,
2004.".
(c) Section 4.3(a) of the Credit Agreement is amended by amending and
restating in its entirety the last sentence of such Section to read as follows:
"Notwithstanding the foregoing, the repayment of outstanding Term A Loans that,
but for the terms of this sentence, would otherwise be required to be made on
July 30, 2004, shall be required to be made instead on August 30, 2004.".
(d) Section 4.3(b) of the Credit Agreement is amended by amending and
restating in its entirety the last sentence of such Section to read as follows:
"Notwithstanding the foregoing, the repayment of outstanding Term B Loans that,
but for the terms of this sentence, would otherwise be required to be made on
July 30, 2004, shall be required to be made instead on August 30, 2004.".
(e) Section 4.3(d) of the Credit Agreement is amended by amending and
restating in its entirety the last sentence of such Section to read as follows:
"Notwithstanding the foregoing, the repayment of outstanding Term D Loans that,
but for the terms of this sentence, would otherwise be required to be made on
July 30, 2004, shall be required to be made instead on August 30, 2004.".
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(f) Section 5.1(b) of the Credit Agreement is amended as set forth in
Section 2(d)(ii) below.
(g) Section 5.1(e) of the Credit Agreement is amended (i) as set forth
in Section 2(d)(iii) below and (ii) by adding a new sentence to the end of such
Section to read as follows: "Notwithstanding the foregoing, the payment of
interest that, but for the terms of this sentence, would otherwise be required
to be made on July 30, 2004, shall be required to be made instead on August 30,
2004."
(h) Section 13.7 of the Credit Agreement is amended as set forth in
Section 2(d)(iv) below.
(i) Section 15.2(a)(ii) of the Credit Agreement is amended as set forth
in Section 2(d)(v) below.
SECTION 2. Agreement to Standstill and Amendment.
(a) Upon and subject to the occurrence of the Standstill Effective Date
(as defined in Section 5 below) and subject to the other terms and conditions
set forth below, each of the undersigned Lenders (each a "STANDSTILL LENDER" and
collectively, the "STANDSTILL LENDERS") and the Administrative Agent agree that,
notwithstanding a failure by the Borrowers to make the Required Payments on the
Required Payment Date, from and after July 30, 2004 until the first to occur of
(i) August 30, 2004 (the "STANDSTILL PERIOD") or (ii) the date on which a
Standstill Termination Event (as defined below) shall have occurred (the first
such date to occur, the "STANDSTILL TERMINATION DATE"), such Standstill Lender
and the Administrative Agent shall forbear from suing, asking for, demanding,
setting off or taking any action to recover from the Guarantor or the Borrowers
any of the Required Payments and from otherwise enforcing any of its individual
or their collective rights and remedies (including rights of acceleration and
foreclosure) against the Guarantor or the Borrowers under the Loan Documents
that arise as a result of (and only as a result of) the Required Payments not
being made on or before the Required Payment Date (it being acknowledged and
agreed by the Borrowers and the Guarantor that the failure to make the Required
Payments by the Required Payment Date constitutes an Event of Default
notwithstanding such agreement by the Standstill Lenders to forebear), except
for any action to perfect, maintain, or defend any liens granted pursuant to the
Loan Documents against claims of third parties, the Borrowers or the Guarantor
or any action with respect to enforcement of this Agreement.
(b) Notwithstanding anything to the contrary contained in Section 2(a)
hereof, on the Standstill Termination Date (i) the forbearance and all
agreements set forth in Section 2(a) hereof shall automatically terminate and be
of no further force or effect, (ii) any breach, Default or Event of Default that
was the subject of or was affected by the forbearance under Section 2(a) hereof
(including the failure of the Borrowers to make any of the Required Payments)
is, without further action, reinstated and shall have the same force and effect
as if the forbearance had not been agreed to by the parties hereto and (iii)
subject to the terms of the Loan Documents and applicable law, any Lender may
thereafter, without limitation, ▇▇▇, ask for or demand from any Borrower or the
Guarantor, payment of the Obligations due and payable to such Lender, in whole
or in part, and otherwise enforce any of its rights and remedies (including
rights of
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acceleration and foreclosure) provided for under the Loan Documents against any
party. In furtherance of the foregoing and notwithstanding the occurrence of the
Standstill Effective Date, each of the Guarantor and the Borrowers agree that,
subject to the agreement of the Standstill Lenders to forbear from exercising
certain of their rights and remedies as and to the extent expressly set forth in
this Agreement, all rights and remedies of the Lenders under the Loan Documents
with respect to the Guarantor and the Borrowers shall continue to be available
to the Lenders from and after the Standstill Effective Date.
(c) It is understood and agreed that interest shall continue to accrue
on and after the Standstill Effective Date on the outstanding Obligations
(including the Obligations represented by the Required Principal Payments) at
the applicable non-default rates provided for pursuant to the Credit Agreement
including those based on the LIBOR Rate; provided that it is also understood and
agreed that from and after the date hereof all subsequent Interest Periods will
not exceed one month in duration.
(d) Upon and subject to the occurrence of the Standstill Effective
Date, the Credit Agreement is hereby amended as follows:
(i) Section 1.1 is amended to add the following new definition
in the appropriate alphabetical order:
"Senior Lender Steering Committee" means the unofficial committee of
senior secured creditors, consisting of GECC, Strategic Value Partners,
LLC and Varde Partners, Inc., and/or such other Lenders that may be
appointed thereto from time to time."
(ii) Section 5.1(b) of the Credit Agreement is amended by
deleting the following language ", two (2) or three (3) months" therein
and substituting therefor the word "month".
(iii) Section 5.1(e) of the Credit Agreement is amended by
amending and restating in its entirety the language in the first
sentence thereof up to the proviso to read as follows: "Interest on
each Base Rate Loan shall be payable in arrears on the last Business
Day of each calendar month; and interest on each LIBOR Rate Loan shall
be payable on the last day of each Interest Period applicable thereto,
which Interest Period shall not exceed one month;".
(iv) Section 13.7 of the Credit Agreement is amended by (A)
inserting the words ", the Senior Lender Steering Committee and Lenders
that are or were member(s) thereof," immediately after the phrase
"indemnify the Administrative Agent and the Collateral Agent" therein,
(B) deleting the word "and" immediately after the phrase "in their
respective capacities as such" therein, (C) inserting the words "or the
Senior Lender Steering Committee or Lenders that are or were member(s)
thereof" (1) immediately after the phrase "incurred by or asserted
against the Administrative Agent or the Collateral Agent" therein and
(2) immediately after the phrase "any action taken or omitted by the
Administrative Agent or the Collateral Agent" therein, (D) adding a new
clause (c) to the end of the proviso to the first sentence therein to
read "or (c) in the case of the Senior Lender Steering Committee or a
Lender that is or was a member thereof, the
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Senior Lender Steering Committee's or such Lender's bad faith, gross
negligence or willful misconduct" and (E) adding the following new
proviso to the end thereof: "; and provided, further, however, that,
notwithstanding the foregoing, no Lender which is or was also a member
of the Senior Lender Steering Committee shall be obligated under this
Section 13.7 or otherwise, in its capacity as a Lender, to indemnify
the Senior Lender Steering Committee or any member thereof acting in
its capacity as such a member.".
(v) Section 15.2(a)(ii) of the Credit Agreement is amended and
restated to read as follows:
"(ii) of the Administrative Agent and the Senior Lender Steering
Committee in connection with the preparation, execution and delivery of
any waiver, amendment or consent by the Administrative Agent or the
Lenders relating to this Agreement or any other Loan Document, as well
as any advice regarding, and any and all drafts and final documentation
in connection with any possible restructuring of indebtedness of any
Borrower and/or the Guarantor, whether or not consummated, including
without limitation reasonable fees and disbursements of counsel for the
Administrative Agent and counsel for the Senior Lender Steering
Committee,"
SECTION 3. Standstill Events. If any of the following events (each a
"STANDSTILL EVENT") shall occur and be continuing:
(a) Any Borrower or the Guarantor shall (i) fail to pay any amount
payable hereunder or under any Loan Document (other than the Required Payments)
when due in accordance with the terms of this Agreement or the Credit Agreement,
as the case may be, or (ii) fail to comply with or breach any provision of this
Agreement or of any Loan Document or the occurrence of any event of default
under any Loan Document or Related Transactions Documents, other than the
failure to make the Required Payments during the Standstill Period, subject in
the case of clause (ii) above only (other than the failure to make the Required
Payments, for which notwithstanding anything to the contrary in Section 12.1 of
the Credit Agreement no grace period or notice requirement shall be applicable)
to applicable notice and grace periods, if any, set forth in Section 12.1 of the
Credit Agreement;
(b) Any representation or warranty made or deemed made by the Borrowers
or the Guarantor herein or any representation or warranty made or deemed made
hereafter by any Borrower or the Guarantor in any Loan Document or which is
contained in any certificate, document or financial or other statement furnished
by it at any time under or in connection with any such Loan Document shall prove
to have been incorrect or misleading in any material respect on or as of the
date made or deemed made;
(c) Any of the Security Documents to which a Borrower or the Guarantor
is a party shall cease, for any reason (other than any termination in accordance
with its terms), to be in full force and effect, or any Borrower or the
Guarantor shall so assert, or any Lien created by any of such Security Documents
shall (except to the extent released in accordance with the terms of such
Security Documents and the Credit Agreement) cease to be enforceable in
accordance with its terms;
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(d) The Guaranty contained in Article XIV of the Credit Agreement shall
cease, for any reason (other than in accordance with the terms of the Credit
Agreement), to be in full force and effect with respect to the Guarantor or any
Borrower;
(e) The commencement by or against any Borrower or the Guarantor of (i)
any foreclosure, bankruptcy or similar proceeding, (ii) any proceeding that
threatens or contests the liens in favor of the Administrative Agent or the
Obligations of the Guarantor under the Guaranty, (iii) any proceeding by any
Bridge Lender seeking to enforce any remedy with respect to any Bridge Loans or
related obligations or (iv) any other proceeding that could have a Material
Adverse Effect, or the commencement of a proceeding by or on behalf of any
Borrower or the Guarantor against any Lender or Agent or the Senior Lender
Steering Committee;
(f) A Waiver Termination Event (as defined in the Bridge Lender Consent
(as defined in Section 5 below)) shall occur under the terms of the Bridge
Lender Consent;
(g) The exercise of any remedies against any Borrower or the Guarantor
pursuant to a Hedging Agreement permitted or required under the Credit
Agreement; or
(h) The failure by the Borrowers and the Guarantor to obtain an
agreement by August 12, 2004, in form and substance satisfactory to the
Administrative Agent, from each Lender party to a Hedging Agreement permitted or
required under the Credit Agreement to (i) defer any payments due under such
Hedging Agreement to September 30, 2004 and (ii) waive or forbear against taking
any remedial action in respect of any default or cross default under such
Hedging Agreement (including, without limitation, a default resulting from a
bankruptcy or similar proceeding of the Borrowers or a cross default by virtue
of a Default or Event of Default under the Credit Agreement resulting from the
failure by the Borrowers to make the Required Payments) on such terms and
conditions satisfactory to the Administrative Agent.
then, upon the affirmative vote of the Required Lenders or, with respect to
clauses (e)(i) and (f) above, automatically upon the occurrence of any such
event described in such clauses without any further action, such Standstill
Event shall constitute a "STANDSTILL TERMINATION EVENT". The occurrence of a
Standstill Termination Event shall cause the forbearance under Section 2(a) of
this Agreement to immediately and automatically terminate and shall constitute
an Event of Default under the Credit Agreement and entitle the Lenders to
exercise all of the rights and remedies exercisable upon an Event of Default
pursuant to the Credit Agreement.
SECTION 4. Conditions to Effectiveness of Amendment. This Agreement
(other than Sections 2, 3 and 10 hereof) shall be effective as of the date first
above written when, and only when, on or before July 30, 2004 all of the
following conditions precedent have been fulfilled in a manner satisfactory to
the Administrative Agent (the "AMENDMENT EFFECTIVE DATE"):
(a) the Administrative Agent shall have signed this Agreement and the
Administrative Agent shall have notified the parties hereto that it has received
counterparts of this Agreement executed by the Guarantor, the Borrowers and all
Lenders (or advice satisfactory to the Administrative Agent shall have been
received by the Administrative Agent that all of the Lenders have executed this
Agreement); and
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(b) the conditions set forth in Sections 5(b), (d) and (e) have been
satisfied.
SECTION 5. Conditions to Effectiveness of Standstill Agreement. This
Agreement (other than Section 1 hereof, which shall only become effective in
accordance with Section 4 above) shall be effective as of the date first above
written when, and only when, on or before July 30, 2004, all of the following
conditions precedent have been fulfilled in a manner satisfactory to the
Administrative Agent (the "STANDSTILL EFFECTIVE DATE"):
(a) the Administrative Agent shall have signed this Agreement and the
Administrative Agent shall have notified the parties hereto that it has received
counterparts of this Agreement executed by the Guarantor, the Borrowers and the
Required Lenders but not all Lenders (or advice satisfactory to the
Administrative Agent shall have been received by the Administrative Agent that
the Required Lenders but not all Lenders have executed this Agreement);
(b) the Administrative Agent shall have received counterparts of the
Consent appended hereto (the "CONSENT") executed by each of the Guarantor and
each of the Grantors and/or Pledgors designated therein;
(c) the Administrative Agent and the Senior Lender Steering Committee
shall have received evidence of agreements, in form and substance satisfactory
to them, that the requisite lenders under the Bridge Loan Agreement have agreed
to waive any and all of their rights to take any action with respect to the
rights and remedies under the Bridge Loan Agreement that may arise as a result
of a cross-default to a Default under the Credit Agreement or otherwise until at
least the earlier of (i) August 30, 2004 and (ii) the occurrence of a Standstill
Termination Event (the "BRIDGE LENDER CONSENT");
(d) the Administrative Agent shall have received duly certified
resolutions or other satisfactory evidence of the authority of the Borrowers and
the Guarantor to enter into and perform this Agreement;
(e) payment by the Borrowers or the Guarantor to the Administrative
Agent of all billed and unpaid fees and expenses of the Administrative Agent and
the Senior Lender Steering Committee in connection with all matters relating to
this Agreement, the Loan Documents and the restructuring of the Borrowers and
the Guarantor, including, without limitation, the reasonable fees and expenses
of the financial advisor to the Administrative Agent, counsel to the
Administrative Agent and counsel to the Senior Lender Steering Committee; and
(f) the Administrative Agent shall have received evidence, in form and
substance satisfactory to it, that the conditions precedent set forth in Section
3 of the Bridge Lender Consent have been satisfied.
SECTION 6. Representations and Warranties. To induce the Lenders to
enter into this Agreement, each of the Borrowers and the Guarantor hereby
represents and warrants to the Administrative Agent and the Lenders party hereto
the following:
(a) The execution, delivery and performance by such Borrower and the
Guarantor of this Agreement and the Loan Documents to which it is a party, as
amended hereby,
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are within such Borrower's and Guarantor's corporate or limited liability
company powers, have been duly authorized by all necessary corporate or limited
liability company action, and do not (i) contravene such Borrower's or
Guarantor's constituent documents, (ii) violate any law (including, without
limitation, the Securities Exchange Act of 1934), 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 applicable to such Borrower and Guarantor, or (iii) subject to the receipt
of the Bridge Lender Consent described in Section 5(c) hereof, conflict with or
result in the breach of, or constitute a default under, any contractual
obligation. As of the Standstill Effective Date or the Amendment Effective Date,
as the case may be, neither the Guarantor nor such Borrower is in violation of
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or, subject to the receipt of the Bridge Lender Consent
described in Section 5(c) hereof, in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which could reasonably be expected to have a Material
Adverse Effect.
(b) No authorization or approval or other action by, and no notice to
or filing with, any governmental authority or regulatory body or, subject to the
receipt of the Bridge Lender Consent described in Section 5(c) hereof, any other
third party is required to be obtained by such Borrower or the Guarantor in
connection with the execution and delivery, or performance by any such Borrower
or the Guarantor of any of its obligations under, this Agreement and the Credit
Agreement, as amended hereby.
(c) This Agreement has been duly executed and delivered by such
Borrower and the Guarantor, and is the legal, valid and binding obligation of
such Borrower and the Guarantor, enforceable against such Borrower and the
Guarantor in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or limiting creditors' rights or by equitable principles generally.
(d) Other than as expressly contemplated herein, (i) the
representations and warranties made by each of the Borrowers and the Guarantor
in the Security Documents and in Sections 7.1(a), (b), (c), (d), (e), (f), (g),
(h), (i), (j), (k), (l), (m), (n), (o), (r), (s), (t), (u), (v), (w), (x), (z),
(aa), (bb) and, except as may have been disclosed in the Guarantor's public
filings to date, (p) of the Credit Agreement are true and correct in all
material respects on and as of the date hereof, after giving effect to the
effectiveness of this Agreement, as if made on and as of the date hereof (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 (ii) no Default or Event of Default has occurred and is continuing,
subject to the receipt of the Bridge Lender Consent described in Section 5(c)
hereof and other than, if the Amendment Effective Date shall not have occurred,
any resulting from the failure to pay the Required Payments.
(e) After giving effect to the amendments set forth in Section 1 hereof
(if this Agreement is executed by all Lenders), or after giving effect to the
Bridge Lender Consent referred to in Section 5(c) above (if this Agreement is
executed by the Required Lenders but not all Lenders), no default has occurred
and is continuing under or in connection with the Bridge Loan Agreement.
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SECTION 7. Reference to and Effect on the Loan Documents.
(a) On and after the Standstill Effective Date or the Amendment
Effective Date, as the case may be, 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 the other Loan 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 or otherwise modified hereby.
(b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended or otherwise modified by this Agreement, are
and shall continue to be in full force and effect and are hereby in all respects
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Agreement shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or any Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.
SECTION 8. Amendments. This Agreement may not be amended, supplemented
or modified except in accordance with the provisions of this Section 8. The
Required Lenders, the Guarantor and each Borrower may, or (with the written
consent of the Required Lenders) the Administrative Agent, the Guarantor and
each Borrower may, subject to the requirements of Section 15.11 of the Credit
Agreement, from time to time, (a) enter into written amendments, supplements or
modifications hereto for the purpose of adding any provisions to this Agreement
or changing in any manner the rights or obligations of the Standstill Lenders or
of the Borrowers and the Guarantor hereunder or (b) waive, on such terms and
conditions as the Required Lenders, or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or
any Standstill Event and its consequences; provided, that, no such waiver and no
such amendment, supplement or modification shall amend, modify or waive any
provision of this Section 8 without the consent of each Lender party hereto; and
provided, further, that, in the event Section 1 hereof becomes effective in
accordance with Section 4 hereof, no such waiver and no such amendment,
supplement or modification shall extend the timeframes specified therein without
the consent of each Lender party hereto. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the relevant
Standstill Lenders and shall be binding upon the Borrowers, the Guarantor, the
Standstill Lenders, the Administrative Agent and all future Standstill Lenders.
SECTION 9. Costs and Expenses. The Borrowers agree to pay, and the
Guarantor guarantees payment of, all reasonable costs and expenses associated
with the preparation, execution, delivery, administration, and enforcement of
this Agreement and all related matters during the Standstill Period including,
without limitation, the reasonable fees and expenses of the financial advisor to
the Administrative Agent, counsel to the Administrative Agent and counsel to the
Senior Lender Steering Committee (in each case, whether incurred prior to or
after the Standstill Effective Date or the Amendment Effective Date, as the case
may be, with respect to this Agreement).
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SECTION 10. Tolling of Statute of Limitations. Each and every statute
of limitations or other applicable law, rule or regulation governing the time by
which any Standstill Lender must commence legal proceedings or otherwise take
any action with respect to exercising any of its respective rights, powers or
remedies directly or indirectly against any of the Borrowers and the Guarantor
with respect to any breach or default existing on or prior to the Standstill
Termination Date, including, without limitation, actions under or in respect of
any of the Credit Agreement or any Loan Document, shall be tolled during the
Standstill Period. Each of the Borrowers and the Guarantor agree, to the fullest
extent permitted by law, not to include such period of time in any assertion by
it at any time that a statute of limitations or other applicable law, rule or
regulation bars or otherwise acts as a defense (whether equitable or legal) to
any legal proceeding or other action by any Lender in exercise of its respective
rights, powers or remedies, directly or indirectly, with respect to any or all
of the breaches or defaults referred to in the immediately preceding sentence.
SECTION 11. Agreement Not a Defense. Each of the Borrowers and the
Guarantor agree that, subject to the agreement of the Standstill Lenders to
forbear as and to the extent expressly set forth herein, the agreements of the
Standstill Lenders under this Agreement shall not constitute a waiver by any of
the Standstill Lenders of, or a defense by any of the Borrowers and the
Guarantor to, the exercise by any of the Standstill Lenders of any right, power
or remedy which any of the Standstill Lenders may have under or in respect of
the Credit Agreement or any Loan Document or any other agreement or document
relating thereto (and including rights, powers and remedies at law, in equity or
by statute).
SECTION 12. GOVERNING LAW. THIS AGREEMENT 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.
SECTION 13. Acknowledgments and Agreements.
(a) The Collateral. Each of the Borrowers and the Guarantor ratifies
and reaffirms the validity and enforceability (without defense, counterclaim or
offset of any kind) of the liens and security interests granted to secure any of
the Obligations to and for the benefit of the Lenders, pursuant to the Security
Documents. Each of the Borrowers and the Guarantor acknowledges and agrees that
all such liens and security interests granted by it shall continue to secure the
Obligations and the Guaranty from and after the effective date hereof. Each of
the Borrowers and the Guarantor further agrees to take promptly any and all
actions reasonably requested by the Administrative Agent with respect to the
granting, perfection and priority of the liens purported to be granted by the
Security Documents.
(b) Validity of Obligations. Each of the Borrower and the Guarantor
acknowledges and agrees that such party is truly and justly indebted to the
Lenders for the Obligations, without defense, counterclaim or offset of any
kind, and such party ratifies and reaffirms the validity, enforceability and
binding nature of such Obligations.
SECTION 14. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS, THE GUARANTOR,
THE ADMINISTRATIVE AGENT AND THE LENDERS PARTY
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HERETO IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE ACTIONS OF THE ADMINISTRATIVE AGENT OR ANY
LENDER PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR
ENFORCEMENT THEREOF.
SECTION 15. Execution in Counterparts. This Agreement may be executed
by one or more of the parties to this Agreement on any number of separate
counterparts, and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
CHOICE ONE COMMUNICATIONS OF NEW YORK INC.
CHOICE ONE COMMUNICATIONS OF PENNSYLVANIA INC.
CHOICE ONE COMMUNICATIONS OF MASSACHUSETTS INC.
CHOICE ONE COMMUNICATIONS INTERNATIONAL INC.
CHOICE ONE COMMUNICATIONS OF RHODE ISLAND INC.
CHOICE ONE COMMUNICATIONS OF CONNECTICUT INC.
CHOICE ONE COMMUNICATIONS OF MAINE INC.
CHOICE ONE OF NEW HAMPSHIRE INC.
CHOICE ONE COMMUNICATIONS OF OHIO INC.
CHOICE ONE COMMUNICATIONS OF VERMONT INC.
CHOICE ONE ONLINE INC.
CHOICE ONE COMMUNICATIONS OF VIRGINIA INC.
CHOICE ONE COMMUNICATIONS SERVICES INC.
US XCHANGE INC.
US XCHANGE OF INDIANA, LLC.
US XCHANGE OF ILLINOIS, LLC.
US XCHANGE OF WISCONSIN, LLC.
US XCHANGE OF MICHIGAN, LLC.
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO
for each of the entities set forth above
GUARANTOR:
CHOICE ONE COMMUNICATIONS INC.
By: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: CFO
GENERAL ELECTRIC CAPITAL CORPORATION,
as Administrative Agent, Collateral
Agent, Syndication Agent and Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Duely Authorized Signator
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ SENIOR FUNDING, INC.,
as Documentation Agent and Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A., as Lender
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
Title: AVP
DEUTSCHE BANK AND TRUST COMPANY
AMERICAS, as Lender
By: DB Services New Jersey
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
CARGILL FINANCIAL SERVICES
INTERNATIONAL, Inc., as Lender
By: /s/ ▇▇▇▇ ▇. ▇'▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇'▇▇▇▇▇
Title: Executive Vice President
By:
----------------------------------
Name:
Title:
FERNWOOD ASSOCIATES, L.P., as Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title:
Wayland Distressed Opportunities Fund I-B, LLC, as
Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
VARDE PARTNERS, INC., as Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title:
STRATEGIC VALUE MASTER FUND, LTD, as
Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Gold
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Gold
Title: Managing Director
▇▇▇▇▇▇▇ CAPITAL MANAGEMENT, ▇▇ ▇▇, as
Lender
By: S&E Partners, LP; its general partner
By: ▇▇▇▇▇▇▇, Inc.; its general partner
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: President
QUANTUM PARTNERS LDC, as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney in fact
ORE HILL HUB FUND, LTD, as Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title:
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PRODUCTS, LLC, as
Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇
Title: Vice President
By:
---------------------------------
Name:
Title:
▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS, L.P.,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Authorized Signatory
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS, L.P.,
as Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Authorized Signatory
Wayland Distressed Opportunities Fund I-C, LLC, as
Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Authorized Signatory
12
CONSENT
Dated as of July 30, 2004
Each of the undersigned, as a Grantor and/or Pledgor under the Third
Amended and Restated Security Agreement, dated as of September 13, 2002 (as
amended, supplemented or otherwise modified through the date hereof, the
"SECURITY AGREEMENT") and/or the Third Amended and Restated Pledge Agreement,
dated as of September 13, 2002 (as amended, supplemented or otherwise modified
through the date hereof, the "PLEDGE AGREEMENT"), in each case, in favor of the
Administrative Agent, for its benefit and the benefit of the Lenders parties to
the Credit Agreement referred to in the foregoing Second Standstill Agreement
and Conditional Amendment to the Credit Agreement (the "AGREEMENT"), hereby
consents to such Agreement and hereby confirms and agrees that (a)
notwithstanding the effectiveness of such Agreement, each of the Security
Agreement and the Pledge Agreement 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 such Agreement, each reference in the Security
Agreement and the Pledge Agreement to the "Credit Agreement", "thereunder",
"thereof" or words of like import shall mean and be a reference to the Credit
Agreement, as amended by such Agreement, and (b) the Security Documents to which
such Grantor or such Pledgor, as the case may be, is a party and all of the
Collateral described therein do, and shall continue to, secure the payment of
all of the Secured Obligations (in each case, as defined therein).
CHOICE ONE COMMUNICATIONS INC.
CHOICE ONE COMMUNICATIONS OF NEW YORK INC.
CHOICE ONE COMMUNICATIONS OF PENNSYLVANIA INC.
CHOICE ONE COMMUNICATIONS OF MASSACHUSETTS INC.
CHOICE ONE COMMUNICATIONS INTERNATIONAL INC.
CHOICE ONE COMMUNICATIONS OF RHODE ISLAND INC.
CHOICE ONE COMMUNICATIONS OF CONNECTICUT INC.
CHOICE ONE COMMUNICATIONS OF MAINE INC.
CHOICE ONE OF NEW HAMPSHIRE INC.
CHOICE ONE COMMUNICATIONS OF OHIO INC.
CHOICE ONE COMMUNICATIONS OF VERMONT INC.
CHOICE ONE ONLINE INC.
CHOICE ONE COMMUNICATIONS OF VIRGINIA INC.
CHOICE ONE COMMUNICATIONS SERVICES INC.
US XCHANGE INC.
US XCHANGE OF INDIANA, L.L.C.
US XCHANGE OF ILLINOIS, L.L.C.
US XCHANGE OF WISCONSIN, L.L.C.
US XCHANGE OF MICHIGAN, L.L.C.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: EVP & CFO
13
The Registrant has omitted from this filing the Schedules listed below. The
Registrant will furnish supplementally to the Commission, upon request, a copy
of any omitted Schedule.
Schedule I - Required Principal Payments
Schedule II - Required Interest Payments