1
EXHIBIT 10.2
AMENDMENT AND WAIVER NO. 3
TO THE AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 29, 2000
AMENDMENT AND WAIVER NO. 3 TO THE AMENDED AND RESTATED CREDIT AGREEMENT
(this "Amendment") among Classic Cable, Inc., a Delaware corporation (the
"Borrower"), the banks, financial institutions and other institutional lenders
parties to the Credit Agreement referred to below (collectively, the "Lenders")
and Union Bank of California, N.A., as agent (the "Agent") for the Lenders.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders, the Agent, Xxxxxxx Xxxxx Credit Partners
L.P., as Lead Arranger and Syndication Agent, and The Chase Manhattan Bank, as
Documentation Agent, have entered into an Amended and Restated Credit Agreement
dated as of July 28, 1999, as amended by Amendment and Waiver No. 1 dated as of
November 15, 1999 and by Amendment and Waiver No. 2 dated as of January 31, 2000
(as so amended, the "Credit Agreement"). Capitalized terms not otherwise defined
in this Amendment have the same meanings as specified in the Credit Agreement.
(2) The Borrower has requested that Majority Lenders agree to amend
certain of the financial covenants and to further amend the Credit Agreement as
hereinafter set forth.
(3) The Majority Lenders are, on the terms and conditions stated below,
willing to grant the requests of the Borrower and to amend the Loan Documents as
hereinafter set forth.
SECTION 1. Amendments to the Credit Agreement. Effective as of the date
hereof and subject to the satisfaction of the conditions precedent set forth in
Section 3, the Majority Lenders hereby agree to amend the Credit Agreement as
follows:
(a) The definition of "Applicable Margin" in Section 1.1 is amended in
full to read as follows:
"Applicable Margin": (a) with respect to Revolving Loans and Term A
Loans, for each LIBOR Loan and for each Base Rate Loan as set forth below:
Maximum
Total Debt Ratio LIBOR Base Rate
---------------- ----- ---------
1 (>=7.00:1) +3.000% +2.000%
2 (<7.00:1->=6.50:1) +2.750% +1.750%
3 (<6.50:1->=6.00:1) +2.500% +1.500%
4 (<6.00:1->=5.50:1) +2.250% +1.250%
5 (<5.50:1->=5.00:1) +2.000% +1.000%
6 (<5.00:1) +1.750% +0.750%
2
and (b) with respect to Term B Loans and Term C Loans, +3.250%
for each LIBOR Loan and +2.250% for each Base Rate Loan.
(b) The definition of "Operating Cash Flow" in Section 1.1 is amended
by adding to the end thereof the following:
plus (e) extraordinary, non-recurring or unusual losses or
expenses deducted in computing Operating Cash Flow for the period
ending on December 31, 2000 and resulting from business
rationalizations and rescaling of overhead as provided in Schedule 1.1A
and in an amount not to exceed $3,000,000, provided that (x) the
Borrower's independent public accountants shall have audited the
amounts described in this clause (e) and (y) the Borrower shall have
provided to the Agent and the Lenders on or prior to December 31, 2000
a detailed pro forma account of such extraordinary, non-recurring or
unusual losses or expenses.
(c) The reference to Section 2.06(f) appearing in the last line of
Section 2.7(b)(ii) is hereby replaced with a reference to Section 2.7(f).
(d) Subsection (v) of Section 5.9 is amended by deleting such
subsection in its entirety and substituting therefor the following:
(v) the Term A Loans made after the Term A Reset Date shall be
used to fund Permitted Acquisitions.
(e) Section 6.1(a) is amended by deleting the table contained therein
and substituting therefor the following table:
Period Ratio
------ -----
Closing Date to and including June 30, 2000 7.00:1
July 1, 2000 to and including December 31, 2000 7.50:1
January 1, 2001 to and including December 31, 2001 6.90:1
January 1, 2002 to and including December 31, 2002 6.75:1
January 1, 2003 to and including December 31, 2003 6.50:1
January 1, 2004 to and including December 31, 2004 6.00:1
January 1, 2005 and thereafter 5.50:1
(f) Section 6.1(b) is amended by deleting the table contained therein
and substituting therefor the following table:
Period Ratio
------ -----
Closing Date to and including June 30, 2000 4.50:1
July 1, 2000 and thereafter 3.00:1
(g) Section 6.1(c) is amended by deleting the table contained therein
and substituting therefor the following table:
2
3
Period Ratio
------ -----
Closing Date to and including June 30, 2000 1.35:1
July 1, 2000 to and including March 31, 2001 1.25:1
April 1, 2001 to and including June 30, 2001 1.30:1
July 1, 2001 to and including December 31, 2001 1.45:1
January 1, 2002 to and including December 31, 2002 1.55:1
January 1, 2003 and thereafter 1.65:1
(h) Section 6.1(f) is amended by deleting the figure
"$65,000,000" set opposite the period "Fiscal Year Ending December 31, 2000" and
substituting therefor the figure "$75,000,000".
(i) A new Schedule 1.1A is added in the form of Schedule 1.1A
to this Amendment.
SECTION 2. Waiver of the Credit Agreement. Effective as of the
date hereof and subject to the satisfaction of the conditions precedent set
forth in Section 3, the Majority Lenders hereby (a) agree to waive the
restrictions of Section 6.5 of the Credit Agreement solely to permit the
Borrower to enter into Sale-Leaseback of Tower Assets transactions provided that
(i) the Borrower is in compliance with the proviso set forth in Section 6.5 of
the Credit Agreement, (ii) the Borrower has entered into a binding contract with
a single buyer no later than March 31, 2001 for the Sale-Leaseback of Tower
Assets permitted hereby, (iii) the consummation of the Sale-Leaseback of Tower
Assets with respect to not less than 50% of the aggregate purchase price of the
Sale-Leaseback of Tower Assets permitted hereby shall have occurred not later
than March 31, 2001, the proceeds of which shall be applied in accordance with
subsection (b) below and (iv) the consummation of the Sale-Leaseback of Tower
Assets with respect to the remainder of the aggregate purchase price of the
Sale-Leaseback of Tower Assets as determined by the Borrower to be consummated
(which may exclude a de minimis number of towers under the contract referred to
in clause (ii) above) permitted hereby shall have occurred not later than April
30, 2001 and (b) agree that, for purposes of compliance with Sections 2.7(b)(ii)
and (iii) of the Credit Agreement, until the earlier of April 30, 2001 and the
date on which the Borrower determines the Sale-Leaseback of Tower Assets
described in clause (a) (iv) above (which the Borrower has determined to
consummate) is completed (such earlier date being the "Application Date"), 50%
of the Net Proceeds of the Sale-Leaseback of Tower Assets that are described in
clause (a) (iii) above or that are received by the Borrower prior to the
Application Date shall be applied to prepay the Loans and 50% of such Net
Proceeds shall be deposited into the Cash Collateral Account and, on the
Application Date, such Net Proceeds as have been deposited in the Cash
Collateral Account, together with any Net Proceeds of the Sale-Leaseback of
Tower Assets described in clause (a) (iv) above that have not yet been applied
to prepay the Loans shall be applied to prepay the Loans in accordance with the
applicable provisions of Section 2.7(b)(ii) and Section 2.7(b)(iii) of the
Credit Agreement; provided that the Maximum Total Debt Ratio in such sections
shall be calculated after giving effect to the application of the Net Proceeds
of the Sale-Leaseback of Tower Assets previously applied to prepay the Loans.
Any Net Proceeds of the Sale-Leaseback of Tower Assets remaining in the
3
4
Cash Collateral Account after all prepayments of the Loans required pursuant to
this Section 2, shall be returned to the Borrower.
If the Application Date falls after March 31, 2001, all calculations of
the Maximum Total Debt Ratio, the Maximum Senior Debt Ratio, the Total Interest
Coverage Ratio, the Fixed Charge Coverage Ratio and the Pro Forma Debt Service
Coverage Ratio shall be made on a pro forma basis as if any amounts that were
applied to prepay Loans on or prior to the Application Date in accordance with
clause (b) above have been so applied on March 31, 2001.
SECTION 3. Conditions of Effectiveness. This Amendment shall become
effective as of the date first above written when, and only when (a) the Agent
shall have received counterparts of this Amendment executed by the Borrower and
the Majority Lenders or, as to any of the Lenders, advice satisfactory to the
Agent that such Lender has executed this Amendment and the consent attached
hereto executed by each Guarantor and (b) an amendment fee equal to 0.25% of (i)
the aggregate Revolving Loan Commitments, (ii) the aggregate Term A Commitments,
(iii) the aggregate principal amount of the Term B Loans and (iv) the aggregate
principal amount of the Term C Loans , in each case, of the Lenders that consent
to the effectiveness of this Amendment shall have been paid to the Agent for the
account of such Lenders.
This Amendment is subject to the provisions of Section 9.1 of the Credit
Agreement.
SECTION 4. Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
4.1 Organization and Good Standing.
The Borrower and each Subsidiary (a) is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization, (b) has all requisite power and authority (corporate, partnership,
limited liability company and otherwise) to own its properties and to conduct
its business as now conducted and as currently proposed to be conducted and (c)
is duly qualified to conduct business as a foreign organization and is currently
in good standing in each state and jurisdiction in which it conducts business.
4.2 Power and Authority.
The Borrower and each Subsidiary has all requisite power and authority
under applicable law and under its Organic Documents to execute, deliver and
perform its respective obligations under the Loan Documents to which it is a
party. All actions, waivers and consents (corporate, regulatory and otherwise)
necessary or appropriate for the Borrower and each Subsidiary to execute,
deliver and perform this Amendment, the Consent and the Loan Documents to which
it is a party have been taken and/or received.
4.3 Validity and Legal Effect.
This Amendment and the Credit Agreement, as modified hereby,
constitutes, and the other Loan Documents to which the Borrower or any
Subsidiary is a party constitute (or will constitute when executed and
delivered), the legal, valid and binding obligations of the Borrower
4
5
or such Subsidiary, as applicable, enforceable against it in accordance with the
terms thereof, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
4.4 No Violation of Laws or Agreements.
The execution, delivery and performance of this Amendment and the Loan
Documents by the Borrower and its Subsidiaries (a) will not violate or
contravene any Requirement of Law, (b) will not result in any material breach or
violation of, or constitute a material default under, any agreement or
instrument by which the Borrower or any Subsidiary, or any of its property, may
be bound, and (c) will not result in or require the creation of any Lien (other
than those permitted by Section 6.3 of the Credit Agreement) upon or with
respect to any property of the Borrower or any Subsidiary, whether such property
is now owned or hereafter acquired.
4.5 Litigation and Legal Proceedings.
Except as disclosed on Schedule 3.10 to the Credit Agreement, there is
no litigation, claim, investigation, administrative proceeding, labor
controversy or similar action that is pending or, to the knowledge of the
Borrower, threatened (i) with respect to this Amendment or any Loan Document or
the transactions contemplated thereby or (ii) against the Borrower, any
Subsidiary or any Property that (in the case of this clause (ii)), if adversely
resolved, could (either individually or in the aggregate) have a Material
Adverse Effect.
SECTION 5. Reference to and Effect on the Loan 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 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 modified by this Amendment.
(b) The Credit Agreement, as specifically amended by this Amendment,
and each of the other Loan Documents 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 Loan 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 Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.
SECTION 6. Costs and Expenses. The Borrower agrees to pay on demand all
reasonable costs and out-of-pocket expenses of the Agent in connection with the
preparation, execution, delivery and administration, modification and amendment
of this Amendment and the
5
6
other instruments and documents to be delivered hereunder (including, without
limitation, the reasonable fees and expenses of counsel for the Agent) in
accordance with the terms of Section 9.5 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.
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.
CLASSIC CABLE, INC.
By /s/ XXXXXX X. SEACH
-----------------------------------------
Xxxxxx X. Seach
Title: President and Chief Financial Officer
AGREED:
UNION BANK OF CALIFORNIA, N.A.,
as Agent and as Lender
By /s/ XXXX XXXXXXX
-------------------------------
Xxxx Xxxxxxx
Title: Assistant Vice President
XXXXXXX XXXXX CREDIT PARTNERS L.P.
By /s/
-------------------------------
Title:
THE CHASE MANHATTAN BANK
By /s/
-------------------------------
Title:
AGREED:
----------------------------------
(Type or Print Name of Institution)
By
-------------------------------
Title:
6
7
CONSENT
Dated as of September 29, 2000
The undersigned, each a Guarantor under the Amended and Restated
Guarantee dated as of July 29, 1999 (the "Guarantee") in favor of the Agent, for
its benefit and the benefit of the Lenders parties to the Credit Agreement
referred to in the foregoing Amendment and the Hedge Banks (as defined in the
Guarantee), hereby consent to such Amendment and hereby confirm and agree that
(a) notwithstanding the effectiveness of such Amendment, the Guarantee 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
Amendment, each reference in the Guarantee to the "Credit Agreement",
"thereunder", "thereof" or words of like import shall mean and be a reference to
the Credit Agreement, as modified by such Amendment, and (b) the Collateral
Documents to which each such Guarantor 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).
CLASSIC CABLE HOLDING, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CLASSIC TELEPHONE, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
UNIVERSAL CABLE HOLDINGS, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
UNIVERSAL CABLE COMMUNICATIONS INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
7
8
UNIVERSAL CABLE OF BEAVER, OKLAHOMA, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
UNIVERSAL CABLE MIDWEST, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
WT ACQUISITION CORPORATION
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
W.K. COMMUNICATIONS, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
TELEVISION ENTERPRISES, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
8
9
BLACK CREEK MANAGEMENT, L.L.C.
By: Classic Cable, Inc.,
its sole member
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
BLACK CREEK COMMUNICATIONS, L.P.
By: Black Creek Management, L.L.C.,
its General Partner
By: Classic Cable, Inc.,
its sole member
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CLASSIC CABLE OF OKLAHOMA, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
FRIENDSHIP CABLE OF ARKANSAS, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
9
10
FRIENDSHIP CABLE OF TEXAS, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CORRECTIONAL CABLE TV, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
CALLCOM 24, INC.
By /s/ XXXXXX X. SEACH
------------------------------------------
Name: Xxxxxx X. Seach
Title: President and Chief Financial Officer
10
