FIRST AMENDMENT TO CREDIT AGREEMENT
CONFORMED COPY
Exhibit 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made and entered into as of March 5, 2015, by and among (i) FRONTIER COMMUNICATIONS CORPORATION (the “Borrower”), (ii) CoBank, ACB (the “Administrative Agent”), as Administrative Agent (the “Administrative Agent”), and (iii) the Lenders and Voting Participants under the Credit Agreement defined below. Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Credit Agreement defined below.
RECITALS
WHEREAS, the Borrower, the Administrative Agent and the Lenders have entered into that certain Credit Agreement, dated as of October 14, 2011 (as may be amended, modified, supplemented, extended or restated from time to time, the “Credit Agreement”); and
WHEREAS, the Lenders and the Voting Participants party to this Amendment, being all of the Lenders and Voting Participants constituting Requisite Lenders, have agreed to amend the Credit Agreement in the manner set forth below in Section 1.
NOW, THEREFORE, in consideration of the foregoing and the agreements set forth in this Amendment, each of the Borrower, the Administrative Agent, the Lenders and Voting Participants party hereto, being all of the Lenders and Voting Participants constituting Requisite Lenders, hereby agree as follows:
| SECTION 1. Amendment. Upon the effectiveness of the Amendment as provided below, the Credit Agreement is hereby amended as follows: |
| (A) Subsection 10.1 of the Credit Agreement is hereby amended by adding the following definitions in the proper alphabetical order: |
“Acquisition” means the acquisition by the Borrower of the wireline business of AT&T Inc. in the State of Connecticut.
“Fee Letter” means that certain fee letter dated as of March 5, 2015, between the Borrower and the Administrative Agent.
“Pro Forma Basis” means, as of any date, that such calculation shall give pro forma effect to all Material Transactions (and the application of the proceeds from such asset sales or related debt incurrences or repayments) that have occurred during the relevant calculation period and during the period immediately following the applicable date of determination therefor and prior to or simultaneously with the event for which the calculation is made, including pro forma adjustments arising out of events which are
attributable to each such Material Transaction, including giving effect to those specified in accordance with the definition of “EBITDA,” in each case as in good faith determined by a Financial Officer of the Borrower, using historical financial statements of all entities, divisions or lines or assets so acquired or sold and the consolidated financial statements of the Borrower and/or any of its Subsidiaries, calculated as if each such Material Transaction, and any Indebtedness incurred or repaid in connection therewith, had been consummated (and the change in EBITDA resulting therefrom realized) and incurred or repaid at the beginning of such period.
Whenever pro forma effect is to be given to a Material Transaction, the pro forma calculations shall be made in good faith by a Financial Officer of the Borrower (including adjustments for costs and charges arising out of or related to the Material Transaction and projected cost savings, operating expense reductions, other operating improvements and initiatives and synergies resulting from such Material Transaction that have been or are reasonably anticipated to be realizable, net of the amount of actual benefits realized during such test period from such actions), and any such adjustments included in the initial pro forma calculations shall continue to apply to subsequent calculations, including during any subsequent periods in which the effects thereof are reasonably expected to be realizable); provided that (i) no amounts shall be added pursuant to this paragraph to the extent duplicative of any amounts that are otherwise added back in computing EBITDA for such period and (ii) the amount of cost savings, operating expense reductions, other operating improvements and initiatives and synergies that are not in accordance with Regulation S-X of the Securities and Exchange Commission shall be subject to the last proviso in clause (A)(7)(b)of the definition of EBITDA.
“Verizon Acquisition” means the acquisition contemplated by that certain Securities Purchase Agreement, dated as of February 5, 2015, by and between the Borrower, as Buyer and Verizon Communications Inc., as Seller.
| (B) The definition of “EBITDA” in Subsection 10.1 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
“EBITDA” means, with respect to the Borrower and its Subsidiaries, on a consolidated basis, for the period of calculation, the sum of (A) (1) net income or deficit, as the case may be (excluding extraordinary gains, extraordinary non-cash losses, the write up of any assets, and any gain or loss on the sale of assets), (2) total interest expense, (3) depreciation and amortization expense, (4) dividends on preferred stock, (5) accrued income or franchise taxes, federal, state or local (whether paid or accrued as a liability), (6) losses attributable to minority interests, investment losses and non-recurring charges for severance, restructuring and acquisition (including acquisition integration) costs, and (7) cost savings, operating expense reductions, other operating improvements and initiatives and synergies related to any Material Transaction (other than the Acquisition) that are (a) permitted under Regulation S-X of the Securities and Exchange Commission or (b) projected by a Financial Officer in good faith to be reasonably anticipated to be realizable within eighteen (18) months of the date of such Material Transaction (which will be added to EBITDA as so projected until fully realized, and calculated on a pro forma basis, as though such cost savings, operating expense
reductions, other operating improvements and initiatives and synergies had been realized on the first day of such period), net of the amount of actual benefits realized during such period from such actions; provided that with respect to this clause (A)(7)(b) such cost savings, operating expense reductions, other operating improvements and initiatives or synergies are reasonably identifiable and factually supportable (in the good faith determination of a Financial Officer of the Borrower); provided further that, the aggregate amount of cost savings, operating expense reductions, other operating improvements and initiatives and synergies related to any Material Transaction added back pursuant to this clause (A)(7)(b) or the definition of Pro Forma Basis (that are not permitted under Regulation S-X of the Securities and Exchange Commission) in any period of four consecutive fiscal quarters shall not exceed 15% of EBITDA with respect to add-backs in connection with Material Transactions other than the Verizon Acquisition and shall not exceed 20% of EBITDA with respect to add-backs in connection with the Verizon Acquisition provided, for the avoidance of doubt, the aggregate amount of all such add-backs for such Material Transactions and the Verizon Acquisition in any period of four consecutive fiscal quarters shall not exceed 20% of EBITDA, in each case for this clause (A)(7)(b) calculated prior to giving effect to such add-backs added back pursuant to this clause (A)(7)(b) for such period, minus (B) the sum of (i) investment income, (ii) interest income, (iii) dividend and patronage income, (iv) income from unconsolidated subsidiaries, partnerships and joint ventures, and (v) other non-operating income (not otherwise included in clauses (i), (ii), (iii) and (iv)); in all cases in clauses (A) and (B) only to the extent otherwise included in calculating net income or deficit. For any period of calculation, EBITDA shall be calculated on a Pro Forma Basis to give effect to any applicable Material Transaction.
| (C) The definition of “Loan Documents” in Subsection 10.1 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
“Loan Documents” means this Agreement, the Notes, any Security Documents, the Fee Letter and any Guaranty Agreement, all as amended, modified, supplemented, extended or restated from time to time.
| (D) Clause (D) of Subsection 3.1 of the Credit Agreement is hereby amended and restated in its entirety as follows: |
(D)Liens on the assets of any Person merged or consolidated with or into (in accordance with Subsection 3.4) or acquired by the Borrower or any Subsidiary that were in effect at the time of such merger, consolidation or acquisition.
| SECTION 2. Conditions to Effectiveness. This Amendment shall be effective upon (a) receipt by the Administrative Agent of an execution counterpart hereto signed by the Borrower, the Administrative Agent and the Requisite Lenders, and (b) receipt by the Administrative Agent on behalf of the Lenders of all accrued fees of the Lenders pursuant to that certain Fee Letter, of even date herewith. |
| SECTION 3. No Novation. This Amendment shall not constitute a novation of the Obligations, the Credit Agreement or any other Loan Document. |
| SECTION 4. Effect of Amendment. All references to the Credit Agreement in the Credit Agreement or in any other Loan Document shall be deemed a reference to the Credit Agreement as amended by this Amendment. Except as expressly provided in this Amendment, the execution and delivery of this Amendment does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with the provisions of, the Credit Agreement or the other Loan Documents, and the Credit Agreement and the other Loan Documents shall remain in full force and effect. Except as expressly provided in this Amendment, this Amendment shall be governed by the terms and provisions of the Credit Agreement. This Amendment shall be considered a “Loan Document” under the Credit Agreement. |
| SECTION 5. Representations and Warranties. The Borrower hereby represents and warrants to the Lenders as follows: |
| (A) The Borrower’s execution, delivery and performance of this Amendment are within its corporate powers, have been duly authorized by all necessary action and do not violate or create a default under (i) law, (ii) its constituent documents, or (iii) any contractual provision binding upon it, except to the extent (in the case of violations or defaults described under clauses (i) or (iii)) such violation or default would not reasonably be expected to result in a Material Adverse Effect and would not have an adverse effect on the validity, binding effect or enforceability of this Amendment or any other Loan Documents and would not materially adversely affect any of the rights of the Administrative Agent or any Lender under or in connection with this Amendment or any other Loan Documents. This Amendment constitutes the legal, valid and binding obligation of the Borrower enforceable against it in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium and other laws affecting the rights of creditors generally and general principles of equity, including an implied covenant of good faith and fair dealing). |
| (B) No Governmental Approvals are required in connection with the execution and delivery by the Borrower of this Amendment and the performance by the Borrower of its obligations hereunder. |
(C)At the time of and immediately after giving effect to this Amendment: (i) the representations and warranties of the Borrower set forth in Section 5 of the Credit Agreement shall then be true and correct in all material respects, except that such representations and warranties that are qualified in the Credit Agreement by reference to materiality or a Material Adverse Effect shall be true and correct in all respects, as of such date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date) and (ii) no Event of Default or Default shall have occurred and be continuing or would result from the execution and delivery of this Amendment.
| SECTION 6. Expenses. The Borrower hereby agrees to pay the Administrative Agent on demand, all reasonable and documented out-of-pocket costs and expenses incurred by the Administrative Agent, including, without limitation, the reasonable and documented fees and expenses of counsel retained by the Administrative Agent, in connection with the negotiation, preparation, execution and delivery of this Amendment. |
| SECTION 7. Counterparts. This Amendment may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and shall be binding upon all parties and their respective permitted successors and assigns, and all of which taken together shall constitute one and the same agreement. |
| SECTION 8. Governing Law. This Amendment and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Amendment and the transactions contemplated hereby shall be governed by, and construed in accordance with, the law of the State of New York without regard to conflicts of law principles that require or permit application of the laws of any other state or jurisdiction. |
[Signatures commence on the following page.]
Witness the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.
FRONTIER COMMUNICATIONS CORPORATION,
as Borrower
By: /s/ John M. Jureller
John M. Jureller
Executive Vice President and Chief Financial Officer
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COBANK, ACB, as the Administrative Agent, the Lead Arranger and a Lender
By: /s/ Gary Franke Gary Franke Vice President
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RAYMOND JAMES BANK, N.A., as a Joint Lead Arranger, a Co-Documentation Agent, and a Lender
By: /s/ Michael Pelletier Name: Michael Pelletier Title: Senior Vice President
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THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., as a Joint Lead Arranger and a Lender
By: /s/ Matthew Antioco Name: Matthew Antioco Title: Vice President
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MUFG UNION BANK, N.A., as a Lender
By: /s/ Matthew Antioco Name: Matthew Antioco Title: Vice President
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TD BANK, N.A., as a Lender
By: /s/ Shivani Agarwal Name: Shivani Agarwal Title: Senior Vice President
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GOLDMAN SACHS BANK USA, as a Lender
By: /s/ Michelle Latzoni Name: Michelle Latzoni Title: Authorized Signatory
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WEBSTER BANK, N.A., as a Lender
By: /s/ Robert A. Schaefer Name: Robert A. Schaefer Title: Vice President
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MOUNTAIN VIEW CLO III LTD, as a Lender
By: Seix Investment Advisors LLC, as Collateral Manager
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| By: /s/ George Goudelias Name: George Goudelias Title: Managing Director |
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FLAGSHIP CLO V, as a Lender
By: _______________________ Name: Title:
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FLAGSHIP CLO VI, as a Lender
By: ________________ Name: Title:
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WESTBROOK CLO LTD, as a Lender
By: SHENKMAN CAPITAL MANAGEMENT, INC., as Investment Manager
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| By: /s/ Justin Slatky Name: Justin Slatky Title: Senior Vice President |
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RIDGEWORTH FUNDS – SEIX FLOATING RATE HIGH INCOME FUND, as a Lender
By: Seix Investment Advisors LLC, as Subadviser
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| By: /s/ George Goudelias Name: George Goudelias Title: Managing Director |
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CITY NATIONAL ROCHDALE, as a Lender
By: Seix Investment Advisors LLC, as Subadviser
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| By: /s/ George Goudelias Name: George Goudelias Title: Managing Director |
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| ALLSTATE INSURANCE COMPANY, as a Lender By: /s/ Mark D. Pittman Name: Mark D. Pittman Title: Senior Managing Director Authorized Signatory | ||
| By: /s/ Chris Goergen Name: Chris Goergen Title: Senior Portfolio Manager Authorized Signatory |
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AIMCO CLO, SERIES 2006-A, as a Lender
By: /s/ Mark D. Pittman Name: Mark D. Pittman Title: Senior Managing Director Authorized Signatory
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| By: /s/ Chris Goergen Name: Chris Goergen Title: Senior Portfolio Manager Authorized Signatory |
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BAKER STREET CLO II LTD, as a Lender
By: Seix Investment Advisors LLC, as Collateral Manager
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| By: /s/ George Goudelias Name: George Goudelias Title: Managing Director |
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BAKER STREET FUNDING CLO 2005-1 LTD, as a Lender
By: Seix Investment Advisors LLC, as Collateral Manager
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| By: /s/ George Goudelias Name: George Goudelias Title: Managing Director |
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BABSON CLO LTD, 2007-I, as a Lender
By: _______________ Name: Title:
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CLEAR LAKE CLO LTD, as a Lender
By: ____________________ Name: Title:
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APOLLO/PALMENTO SHORT-MATURITY LOAN, as a Lender
By: __________________ Name: Title:
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BABSON CLO LTD. 2006-II as a Lender
By: _____________________ Name: Title:
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BABSON MID-MARKET CLO LTD. 2007-II, as a Lender
By: _______________________ Name: Title:
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SAPPHIRE VALLEY CDO I, LTD, as a Lender
By: _______________________ Name: Title:
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GULF STREAM – RASHINBAN CLO 2006-I, as a Lender
By: ________________________ Name: Title:
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RAMPART CLO 2006-I LTD., as a Lender
By: ______________________ Name: Title:
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STONE TOWER CLO V LTD., as a Lender
By: _____________________ Name: Title:
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GULF STREAM – COMPASS CLO 2007, LTD, as a Lender
By: ______________________ Name: Title:
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CORNERSTONE CLO LTD., as a Lender
By: _______________________ Name: Title:
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RAMPART CLO 2007 LTD, as a Lender
By: ______________________ Name: Title:
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GULF STREAM – SEXTANT CLO 2007-I LT, as a Lender
By: ____________________ Name: Title:
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MOUNTAIN VIEW FUNDING CLO 2006-I, as a Lender
By: Seix Investment Advisors LLC, as Collateral Manager
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| By: /s/ George Goudelias Name: George Goudelias Title: Managing Director |
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| AGFIRST FARM CREDIT BANK, as a Voting Participant
By: /s/ Bruce B. Fortner Name: Bruce B. Fortner Title: Vice President
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| 1st FARM CREDIT SERVICES, FLCA, as a Voting Participant
By: /s/ Dale A. Richardson Name: Dale A. Richardson Title: Vice President, Capital Markets Group
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| AGSTAR FINANCIAL SERVICES, FLCA, as a Voting Participant
By: /s/ Bob Atwood Name: Bob Atwood Title: Manager Agency Desk and Team Leader
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| BADGERLAND FINANCIAL, FLCA, as a Voting Participant
By: /s/ Terry A. McMahon Name: Terry A. McMahon Title: CCO
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| FARM CREDIT BANK OF TEXAS, as a Voting Participant
By: /s/ Nicholas King Name: Nicholas King Title: Vice President
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| FARM CREDIT SERVICES OF AMERICA, FLCA, as a Voting Participant
By: /s/ Bruce Dean Name: Bruce Dean Title: Vice President
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| FARM CREDIT MID-AMERICA, FLCA, f/k/a Farm Credit Services of Mid-America, FLCA, as a Voting Participant
By: /s/ Tim J. Fraley Name: Tim J. Fraley Title: Senior Credit Officer
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| UNITED FCS, FLCA d/b/a FCS COMMERCIAL FINANCE GROUP, as a Voting Participant
By: /s/ Lisa Caswell Name: Lisa Caswell Title: Vice President
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| NORTHWEST FARM CREDIT SERVICES, FLCA, as a Voting Participant
By: /s/ Mark Westfall Name: Mark Westfall Title: Vice President
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| FARM CREDIT WEST, FLCA, as a Voting Participant
By: /s/ Timothy R. Kensinger Name: Timothy R. Kensinger Title: Vice President
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| FRONTIER FARM CREDIT, ACA, as a Voting Participant
By: /s/ Ben Fogle Name: Ben Fogle Title: Vice President
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| GREENSTONE FARM CREDIT SERVICES, ACA and GREENSTONE FARM CREDIT SERVICES, FLCA, as a Voting Participant
/s/ Jeff Pavlik Name: Jeff Pavlik Title: Vice President
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| AGCHOICE FARM CREDIT, FLCA, as a Voting Participant
/s/ Mark F. Kerstetter Name: Mark F. Kerstetter Title: Senior Vice President
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| AMERICAN AGCREDIT, FLCA, as a Voting Participant
By: /s/ Bradley K. Leafgren Name: Bradley K. Leafgren Title: Vice President
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