EXHIBIT NO. 10.24
AMENDMENT NO. 1
AMENDMENT NO. 1 (this "AMENDMENT"), dated as of January 5, 1999, to (i)
the Credit Agreement, dated as of June 26, 1997, by and among The Helicon Group,
L.P. (the "BORROWER"), the Lenders party thereto and Paribas, as Agent (the
"CREDIT AGREEMENT"), and (ii) the Subsidiary Guaranty and Security Agreement,
dated as of June 26, 1997, by and among the Guarantors party thereto, the
Borrower and Paribas, as Agent (the "SUBSIDIARY GUARANTY AND SECURITY
AGREEMENT").
RECITALS
I. Capitalized terms used herein and not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
II. The Borrower has requested that the Agent agree to amend the Credit
Agreement upon the terms and subject to the conditions contained herein, and the
Agent is willing so to agree.
Accordingly, in consideration of the Recitals and the terms and
conditions hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Section 1.1 of the Credit Agreement is amended by adding the
following definitions in the appropriate alphabetical order:
"FRONTIER ACQUISITION": the acquisition by the
Borrower of the Frontier Business pursuant to and in
accordance with the Frontier Acquisition Documents.
"FRONTIER ACQUISITION DOCUMENTS": collectively, (i)
the Asset Purchase Agreement, dated as of September 10, 1998,
by and between FrontierVision Operating Partners, L.P.
("FRONTIER") and Helicon Partners I, L.P., pursuant to which
the Borrower shall acquire the Frontier Assets and assume
certain liabilities in connection therewith, (ii) the bills of
sale and all other documents executed or delivered in
connection therewith and (iii) the Assignment and Assumption
Agreement, dated as of December 30, 1998, by and between
Helicon Partners I, L.P. and The Helicon Group, L.P., as each
may be amended, supplemented or otherwise modified in
accordance with Section 7.11.
"FRONTIER ASSETS": certain tangible and intangible
assets owned or held by Frontier and used by Frontier in
connection with the conduct of the business or operations of
(i) certain CATV Systems located in the State of North
Carolina known as the Meat Camp, Zionville, Creston and
Roaring Fork systems, respectively, and (ii) certain CATV
Systems located in the State of Tennessee known as the Xxxxxx,
Crackers Neck, Xxxxx, Xxxxxx Bloomery and Xxxxxxx Creek
systems, respectively, being acquired by the Borrower in the
Frontier Acquisition.
"FRONTIER BUSINESS": Frontier's business of operating
the Frontier Assets, which is to be transferred to the
Borrower on the date of the Frontier Acquisition pursuant to
the Frontier Acquisition Documents.
"HELICON NETWORK SOLUTIONS": Helicon Network
Solutions, L.P., a limited partnership organized and existing
under the laws of the State of Delaware.
"ISP ASSETS": the assets of the Borrower's ISP
business, consisting of telephone dial-up internet access and
other related internet services provided by the Borrower to
approximately 17,000 internet access subscribers under the
name "Helicon OnLine".
"PERMITTED 800 SUBSCRIBERS": cable assets of up to
800 cable subscribers of the Borrower and its Subsidiaries.
"PERMITTED 1,000 SUBSCRIBERS": cable assets of up to
1,000 cable subscribers of the Borrower and its Subsidiaries.
"SUBORDINATED INDEBTEDNESS DOCUMENTS": the Senior
Subordinated Loan Agreement, dated as of January 5, 1999,
among the Borrower and the Lenders party thereto and all
agreements and other documents executed or delivered in
connection therewith, as each may be amended, modified or
supplemented in accordance with Section 7.11.
"WHOLLYOWNED SUBSIDIARY": as to any Person, (i) any
corporation 99% of whose Capital Stock is at the time owned by
such Person and/or one or more WhollyOwned Subsidiaries of
such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or
more WhollyOwned Subsidiaries of such Person has a 99% equity
interest at such time.
2. Section 1.1 of the Credit Agreement is further amended by amending
and restating the following definitions as follows:
"MATERIAL AGREEMENTS": collectively, the Management
Agreement, the Booth Acquisition Documents, the Frontier
Acquisition Documents, the Affiliate Note, the Senior
Indenture Documents and the Subordinated Indebtedness
Documents, as each may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.11.
"TRANSACTION DOCUMENTS": collectively, the Loan
Documents, the Booth Acquisition Documents and the Frontier
Acquisition Documents.
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3. Section 2.4 (b) of the Credit Agreement is amended by deleting the
word "and" at the end of clause (i), replacing the period at the end of clause
(ii) with a semicolon and adding new clauses (iii) and (iv) as follows:
(iii) to the extent that the Borrower shall be
required to prepay or redeem the Senior Indenture Notes with
all or any part of the Net Cash Proceeds derived from the
Disposition of any of the Permitted 800 Subscribers, the pro
rata amount (based upon the relative outstanding principal
amounts of the Loans and the Senior Indenture Notes) of such
Net Cash Proceeds; and
(iv) (A) to the extent that the Borrower shall be
required to prepay or redeem the Senior Indenture Notes with
all or any part of the first $7,000,000 of Net Cash Proceeds
derived from the Disposition of the ISP Assets, the pro rata
amount (based upon the relative outstanding principal amounts
of the Loans and the Senior Indenture Notes) of such Net Cash
Proceeds and (B) the pro rata amount (based upon the relative
outstanding principal amounts of the Loans and the Senior
Indenture Notes) of the Net Cash Proceeds in excess of
$7,000,000 derived from the Disposition of the ISP Assets;
provided that to the extent that for any reason the Borrower
shall not be required to prepay or redeem the Senior Indenture
Notes with such excess Net Cash Proceeds, the Borrower shall
also prepay the Loans with such excess Net Cash Proceeds.
4. Section 4.5 of the Credit Agreement is amended by adding the text
"or the Frontier Acquisition" after the term "Booth Acquisition".
5. Section 4.6(b) of the Credit Agreement is amended by adding the text
"or the Frontier Acquisition Documents" after the term "Booth Acquisition
Documents".
6. Section 4.7 of the Credit Agreement is amended by adding the text
"and the Frontier Assets" after the term "Booth Assets".
7. Section 4.17 of the Credit Agreement is amended and restated in its
entirety as follows:
4.17 SOLVENCY
Immediately before and after giving effect to each of
the following: (a) the making of the Loans and the
consummation of the Booth Acquisition and (b) the consummation
of the Frontier Acquisition and the incurrence by the Borrower
of the Indebtedness under the Subordinated Indebtedness
Documents, the Borrower and each of its Subsidiaries is and
will be Solvent.
8. Section 6.1(d) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
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(d) Within 30 days after the end of each fiscal month,
statements of the Consolidated and consolidating monthly cash
flow, the number of homes passed and the number of subscribers
broken down by system for the period from the beginning of the
current fiscal year to the end of such month, all in form and
substance satisfactory to the Agent.
9. Sections 6.11(a) and 6.11(c) of the Credit Agreement are amended and
restated in their entirety as follows:
(a) INTEREST COVERAGE RATIO. Maintain as of the last
day of any fiscal quarter, an Interest Coverage Ratio of not
less than 1.50:1.00.
(b) LEVERAGE RATIO. Maintain at all times during each
period set forth below, a Leverage Ratio of not more than the
applicable ratio set forth below for such period:
Period Ratio
------ -----
Effective Date through 6:30:1.00
December 31, 1999
January 1, 2000 through 6:00:1.00
June 30, 2000
July 1, 2000 and thereafter 5.75:1.00.
10. Section 6.12 of the Credit Agreement is amended by deleting the
words "At any time after the Effective Date upon which a Person shall have
become a Subsidiary of the Borrower" and substituting the following in their
place: "With respect to Helicon Network Solutions, on or before February 5,
1999, and with respect to each other Subsidiary of the Borrower that is not a
party to the Subsidiary Guaranty, promptly upon the request of the Agent".
11. Section 7.1(ii) of the Credit Agreement is amended and restated in
its entirety as follows: "(ii) Indebtedness of the Borrower and Helicon Capital
Corp. under the Senior Indenture Notes and the Subordinated Indebtedness
Documents, provided that, with respect to such Indebtedness under the
Subordinated Indebtedness Documents, (a) such Indebtedness shall be unsecured
and shall be subordinated to the Indebtedness under the Loan Documents in a
manner in all respects satisfactory to the Agent and (b) the Agent shall have
received a certificate of an Authorized Signatory of the Borrower, in all
respects satisfactory to the Agent, attaching a true and complete copy of each
of the fully executed Subordinated Indebtedness Documents".
12. Section 7.3 of the Credit Agreement shall be amended by deleting
the word "and" at the end of subsection (a), replacing the period at the end of
subsection (b) with "; and" and adding a new subsection (c) as follows:
(c) the Frontier Acquisition, provided that:
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(i) the Agent shall have received prior written notice thereof
from the Borrower;
(ii) at the time of the Frontier Acquisition and immediately
after giving effect thereto, (A) there shall exist no Default
or Event of Default, (B) the representations and warranties
contained in the Loan Documents shall be true and correct with
the same effect as though such representations and warranties
had then been made and (C) each Credit Party shall be in
compliance with all of the terms, covenants and conditions of
the Loan Documents to which it is a party;
(iii) the Agent shall have received a certificate of an
Authorized Signatory of the Borrower, in all respects
satisfactory to the Agent, dated the date of the Frontier
Acquisition, attaching a true and complete copy of each of the
fully executed Frontier Acquisition Documents, and certifying
that (A) each thereof is in full force and effect, (B) the
Frontier Acquisition has been consummated in accordance with
the Frontier Acquisition Documents without any waiver or
modification of any of the conditions thereto (except for a
waiver or modification with respect to approvals and consents
which in the aggregate are not material to the consummation of
the Frontier Acquisition and will not adversely affect in any
material respect the Borrower's ability to conduct the
Frontier Business or the Operating Cash Flow derived
therefrom), (C) the total acquisition cost of the Frontier
Acquisition is not greater than $5,500,000, (D) all approvals
and consents of all Persons required to be obtained in
connection with the consummation of the transactions
contemplated by the Frontier Acquisition Documents shall have
been obtained and shall be in full force and effect (except
for those approvals and consents which in the aggregate are
not material to the consummation of the Frontier Acquisition
and will not adversely affect in any material respect the
Borrower's ability to conduct the Frontier Business or the
Operating Cash Flow derived therefrom), and all required
notices have been given and all required waiting periods shall
have expired, including, if applicable, under the HSR Act, (E)
no material adverse change in the business, assets,
liabilities, financial condition or results of operations of
the Frontier Business has occurred and (F) all filings and
registrations with, and all material approvals, orders,
authorizations, franchises, consents, licenses, certificates
and permits (including, without limitation, all CATV
Franchises and FCC Licenses) from, all Governmental
Authorities (including the FCC), and all other Persons which
are or may be required prerequisites to the validity,
enforceability or non-voidability of the Frontier Acquisition
Documents, the consummation of the Frontier Acquisition and
the grant of the security interests pursuant to the Collateral
Documents have been made or obtained;
(iv) the Agent shall have received a certificate of a
Financial Officer of the Borrower, in all respects
satisfactory to the Agent, dated the date of the Frontier
Acquisition, attaching a pro-forma Compliance Certificate
(after
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giving effect to the incurrence of the Indebtedness under the
Subordinated Indebtedness Documents and the consummation of
the Frontier Acquisition, and certifying that after giving
effect to the incurrence by the Borrower and Helicon Capital
Corp. of the Indebtedness under the Subordinated Indebtedness
Documents and the consummation of the Frontier Acquisition,
the Borrower and each of its Subsidiaries is Solvent;
(v) the Agent shall have received such financial information
as it shall have requested with respect to the Frontier
Acquisition; and
(vi) each Credit Party shall have, at its own expense,
promptly executed and delivered all certificates, documents,
instruments, financing and continuation statements and
amendments thereto, notices and other agreements, and shall
have taken all further action, that the Agent shall have
reasonably requested, in order to perfect and protect the
Security Interest (as defined in the applicable Collateral
Documents) granted thereby or to enable the Agent to exercise
and enforce its rights and remedies thereunder with respect to
the Collateral (as defined therein and including, without
limitation, with respect to the Collateral Account).
13. Section 7.4 of the Credit Agreement is amended by deleting the word
"and" at the end of subsection (b), replacing the period at the end of
subsection (c) with a semicolon and adding new subsections (d), (e) and (f) as
follows:
(d) Dispositions of the Permitted 800 Subscribers, through a sale, on
or before December 31, 1999, provided that (i) the Borrower receives fair market
value payable wholly in cash of at least $1,200 per subscriber, (ii) such
Disposition is an armslength transaction with a Person other than an Affiliate,
(iii) immediately before and after giving effect to such Disposition, no Default
or Event of Default shall exist and (iv) the Borrower shall make any prepayment
of the Loans required pursuant to Section 2.4(b);
(e) Disposition of the ISP Assets at any time, provided that (i) the
Borrower receives fair market value payable wholly in cash equal to at least
$1,200,000, (ii) such Disposition is an armslength transaction with a Person
other than an Affiliate, (iii) immediately before and after giving effect to
such Disposition, no Default or Event of Default shall exist and (iv) the
Borrower shall prepay in full any Indebtedness paid as consideration in
connection with the purchase of the ISP Assets and make any prepayment of the
Loans required pursuant to Section 2.4(b); and
(f) Dispositions of the Permitted 1,000 Subscribers, through an asset
swap, provided that (i) the Borrower receives fair market value in comparable
cable subscribers, (ii) such Disposition is an armslength transaction with a
Person other than an Affiliate and (iii) immediately before and after giving
effect to such Disposition, no Default or Event of Default shall exist.
14. Section 7.5 of the Credit Agreement is amended by deleting the word
"and" at the end of subsection (c), replacing the period at the end of
subsection (d) with "; and" and adding a new subsection (e) as follows:
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(e) Investments consisting of capital contributions
in or the purchase of equity of Wholly-Owned Subsidiaries to
the extent the aggregate amount of such capital contributions
in and equity purchases of (without giving effect to any
writedowns or writeoffs with respect thereto) all such
WhollyOwned Subsidiaries does not exceed $100,000, provided,
however, in the case of Helicon Network Solutions the
aggregate amount of such capital contributions and equity
purchases (without giving effect to any writedowns or
writeoffs with respect thereto) shall not exceed $7,000,000.
15. Section 7.7 of the Credit Agreement is amended and restated in its
entirety as follows:
7.7 CAPITAL EXPENDITURES
Make any Capital Expenditures, or incur any obligation to make
Capital Expenditures, or permit any of its Subsidiaries so to
do, except (a) Capital Expenditures consisting of the
reinvestment, by the Borrower and its Subsidiaries, of Net
Cash Proceeds from the Disposition of the ISP Assets and the
Disposition of any of the Permitted 800 Subscribers and (b)
other Capital Expenditures in an aggregate Consolidated
amount, under this clause (b), in excess of: (i) $8,500,000 in
fiscal year 1998, (ii) $11,300,000 in fiscal year 1999 and
(iii) $9,000,000 in fiscal year 2000. Capital Expenditures
shall be calculated on a noncumulative basis so that amounts
not expended in a fiscal year may not be carried over and
expended in any subsequent fiscal year.
16. The parenthetical in Section 7.11 of the Credit Agreement is
amended and restated in its entirety as follows: "(except for modifications and
waivers of the Booth Acquisition Documents to the extent contemplated by Section
5.15(b) and modifications and waivers of the Frontier Acquisition Documents to
the extent contemplated by Section 7.3(c)(iii)".
17. Section 7.15 of the Credit Agreement is amended by deleting the
text "(i) this Agreement and (ii) the Senior Indenture Documents" and inserting
in its place the text "(i) this Agreement, (ii) the Senior Indenture Documents
and (iii) the Subordinated Indebtedness Documents".
18. Section 7.16 of the Credit Agreement is hereby amended by replacing
the words "the Effective Date" with "January 5, 1999".
19. Section 1(b) of the Subsidiary Guaranty and Security Agreement is
amended by deleting the defined terms "Consideration" and "Net Worth".
20. Section 2(b) of the Subsidiary Guaranty and Security Agreement is
hereby amended and restated in its entirety as follows:
(b) It is the desire and intent of each Guarantor and the Agent and the
Lenders that this Guaranty shall be enforced against such Guarantor to the
fullest extent
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permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. If, however, and to the extent, that the
obligations of any Guarantor under this Guaranty shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guarantor Obligations of such Guarantor (but
not the Guarantor Obligations of any other Guarantor unless such other Guarantor
or Guarantors are individually subject to the circumstances covered by this
Section 2(b)) shall be deemed to be reduced ab initio and such Guarantor shall
pay the maximum amount of the Guarantor Obligations of such Guarantor which
would be permissible under applicable law without causing such Guarantor's
obligations hereunder to be so invalidated.
21. Paragraphs 1 through 20 of this Amendment shall not be effective
until such time as (a) the Required Lenders shall have consented hereto in
writing and (b) the Agent shall have received a fee from the Borrower for the
account of each Lender equal to 0.25% of the principal amount of each Lender's
Loan.
22. Each Credit Party hereby (a) reaffirms and admits the validity and
enforceability of each Loan Document to which it is a party and all of its
obligations thereunder, (b) agrees and admits that it has no defense to or
offset against any such obligation and (c) certifies that, both as of the date
hereof and immediately after giving effect to paragraphs 1 through 20 of this
Amendment, (i) there exists and there shall exist no Default or Event of
Default, (ii) its representations and warranties contained in the Loan Documents
are and shall be true and correct with the same effect as though such
representations and warranties had then been made and (iii) it is and shall be
in compliance with all of the terms, covenants and conditions of the Loan
Documents to which it is a party.
23. In all other respects, the Loan Documents shall remain in full
force and effect, and no amendment in respect of any term or condition of any
Loan Document shall be deemed to be an amendment in respect of any other term or
condition contained in any Loan Document.
24. This Amendment may be executed in any number of counterparts all of
which, taken together, shall constitute one agreement. In making proof of this
Amendment, it shall only be necessary to produce the counterpart executed and
delivered by the party to be charged.
25. THIS AMENDMENT IS BEING EXECUTED AND DELIVERED IN, AND IS INTENDED
TO BE PERFORMED IN, THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCEABLE
IN ACCORDANCE WITH, AND BE GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
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AS EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Amendment to be
executed on its behalf.
THE HELICON GROUP, L.P.
By: Xxxx Investments, Inc., its General Partner
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Name: (Xxxxxxx X. Xxxxxxx)
Senior Vice President
(Principal Accounting Officer)
HELICON CAPITAL CORP.
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------
Name: (Xxxxxxx X. Xxxxxxx)
Senior Vice President
(Principal Accounting Officer)
PARIBAS, as Agent (formerly known as Banque
Paribas)
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: Director
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Consented to and agreed:
PARIBAS (formerly known as Banque Paribas)
By: (Signed Original On File)
Name:
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Title:
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CITY NATIONAL BANK
By: (Signed Original On File)
Name:
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Title:
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