EXHIBIT 10.46
SECOND AMENDMENT TO AMENDED
AND RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit Agreement
("Amendment") dated as of June 24, 2002, is made by and among NORTHLAND CABLE
PROPERTIES EIGHT LIMITED PARTNERSHIP, a Washington limited partnership ("NCP
Eight"), solely for purposes of Section 3.5 hereof, NORTHLAND COMMUNICATIONS
CORPORATION, a Washington corporation ("NCC"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as successor, by merger, to U.S.
Bank of Washington, National Association ("U.S. Bank"), as agent for Lenders (in
such capacity, "Agent"). Words and phrases with initial capital letters shall
have the meanings given to them in Article 1 of this Amendment.
RECITALS
A. NCP Eight and U.S. Bank entered into that certain Amended and
Restated Credit Agreement dated January 4, 1996, as amended by that certain
First Amendment to Amended and Restated Credit Agreement dated March 30, 1998
(the "Credit Agreement").
B. NCP Eight, NCC, and U.S. Bank have entered into that certain
Subordination Agreement dated January 4, 1996 (the "Subordination Agreement").
C. NCP Eight, NCC, and U.S. Bank have agreed to amend the terms and
conditions of the Credit Agreement so as to (1) extend the maturity date of the
Loan to December 31, 2003, and (2) modify certain other covenants and provisions
of the Credit Agreement and the Subordination Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
Section 1.1 Defined Terms. As used herein, capitalized terms shall
have the meanings given to them in the Credit Agreement, except as otherwise
defined herein or as the context requires.
Section 1.2 Modified Defined Terms. Section 1.1 of the Credit
Agreement is hereby amended by deleting the definitions of "LIBOR Rate" and
"LIBOR Rate Loan" and replacing them with the following:
"LIBOR Rate" means, with respect to each Interest Period
applicable to a LIBOR Rate Loan, the average offered rate for deposits
in United States dollars (rounded upward, if necessary, to the nearest
1/16 of 1%) for delivery of such deposits on the first day of such
Interest Period, for the number of days in such Interest Period, which
appears on Telerate page 3750 as of 11:00 A.M., London time (or such
other time as of which such rate appears) two LIBOR Business Days
prior to the first day of such Interest Period, or the rate for such
deposits determined by the Agent at such time based on such other
published service of
general application as shall be selected by the Agent for such
purpose; provided, that in lieu of determining the rate in the
foregoing manner, the Agent may determine the rate based on rates at
which United States dollar deposits are offered to the Agent in the
interbank Eurodollar market at such time for delivery in Immediately
Available Funds on the first day of such Interest Period in an amount
approximately equal to the Advance by the Agent to which such Interest
Period is to apply (rounded upward, if necessary, to the nearest 1/16
of 1%).
"LIBOR Rate Loan" means any borrowing for which NCP Eight has
selected the Adjusted LIBOR Rate to apply.
Section 1.3 Additional Defined Terms. Section 1.1 of the Credit
Agreement is hereby amended to add the following defined terms:
"Adjusted LIBOR Rate" means, With respect to each Interest
Period applicable to a LIBOR Rate Loan, the rate (rounded upward, if
necessary, to the next 1/16th of 1%) determined by dividing the LIBOR
Rate for such Interest Period by 1.00 minus the LIBOR Reserve
Percentage.
"LIBOR Business Day" means, any Business Day which is also a
day for trading by and between banks in United States dollar deposits
in the interbank Eurodollar market and a day on which banks are open
for business in New York City.
"LIBOR Reserve Percentage" means, as of any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board for determining the maximum reserve
requirement (including any basic, supplemental or emergency reserves)
for a member bank of the Federal Reserve System, with deposits
comparable in amount to those held by the Agent, in respect of
"Eurocurrency Liabilities" as such term is defined in Regulation D of
the Board. The rate of interest applicable to any outstanding LIBOR
Rate Loans shall be adjusted automatically on and as of the effective
date of any change in the LIBOR Reserve Percentage.
"Immediately Available Funds" means funds with good value on
the day and in the city in which payment is received.
"Telerate page 3750" means the display designated as such on
the Telerate reporting system operated by Telerate System Incorporated
(or such other page as may replace page 3750 for the purpose of
displaying London interbank offered rates of major banks for United
States dollar deposits).
ARTICLE II- MODIFICATION OF LOAN TERMS
Section 2.1 Interest Rate Modifications.
(a) Section 3.4.2 of the Credit Agreement is hereby amended by
deleting all references to "Business Day" and replacing them with "LIBOR
Business Day". Section 3.4.2 of the Credit Agreement is further amended by
deleting all references to "LIBOR Rate" and replacing them with "Adjusted LIBOR
Rate".
(b) Section 3.4.3 of the Credit Agreement is hereby amended by
deleting the table set forth therein and replacing it with the following:
Ratio of Funded Debt to Annualized Prime LIBOR
Cash Flow Incremental Incremental
(rounded to the nearest hundredth) Rate Rate
---------------------------------- ----------- -----------
More than 4.0:1 1.00% 3.00%
3.5:1 to 4.0:1 0.50% 2.50%
Less than 3.5:1 0.25% 2.00%
Section 2.2 Repayment. Section 3.5 of the Credit Agreement is hereby
amended in its entirety to read as follows:
3.5 Repayment. Interest on the Second Replacement Note shall
be paid Quarterly, commencing June 30, 2002, except with respect to
LIBOR Rate Loans for which interest shall be paid either on the 90th
day after the borrowing, renewal, or conversion date with respect to
such LIBOR Rate Loan, or at the end of each Interest Period, whichever
is sooner. For example, if an Interest Period expires more than 90
days after the borrowing, renewal, or conversion date with respect to
such LIBOR Rate Loan, interest shall be paid on the 90th day and at
the expiration of the Interest Period. Lender acknowledges receipt of
Borrower s payment in the amount of $230,000 to be applied towards the
principal balance of the Loan. The principal balance of the Loan
outstanding as of the date of this Amendment shall be paid in
Quarterly installments of $200,000, with the entire balance due and
payable on December 31, 2003, notwithstanding anything to the contrary
in Section 3.1 hereof. Accordingly, no principal payment shall be due
for June 30, 2002, and the September 30, 2002, installment of
principal shall be in the amount of $170,000.
Section 2.3 Replacement Note. The Loan shall be evidenced by a Second
Replacement Note in the form attached to this Amendment as Exhibit A ("Second
Replacement Note"). The Second Replacement Note shall be a "Note" for all
purposes of the Credit Agreement and the other Loan Documents and shall be in
substitution for, but not in payment of: (a) that certain Replacement Note dated
March 30, 1998, in the principal amount of $10,925,000, which shall be marked
"replaced" by the Agent, (b) and the certain Renewal Revolving Note dated
January 4, 1996, in the principal amount of $11,925,000 which has been marked
"replaced". Both such replaced notes shall be retained by Agent until the Loan
shall have been paid in full.
ARTICLE III - MODIFICATION OF COVENANTS
Section 3.1 Cash Flow to Debt Service. Section 7.11.1 of the Credit
Agreement is hereby amended in its entirety to read as follows:
7.11.1 Cash Flow to Debt Service. As of the end of any Quarter
during the term of the Loan, commencing March 31, 2002, permit the
ratio of (a) such Quarter's Cash Flow to (b) such Quarter's Debt
Service to be less than 1.10:1.
Section 3.2 Funded Debt to Cash Flow. Section 7.11.3 of the Credit
Agreement is hereby amended in its entirety to read as follows:
7.11.3 Funded Debt to Cash Flow. As of the end of any Quarter
during the term of the Loan, permit the ratio of Funded Debt to
Annualized Cash Flow to exceed the following ratios:
For Any Quarter Ending Funded Debt to Annualized
During or On: Cash Flow Ratio
------------- ------------------------
March 31, 2002, through December 31, 2002 4.75:1.0
January 1,2003, through March 31, 2003 4.50:1.0
April 1,2003, through June 30, 2003 4.25:1.0
July 1, 2003, through September 30, 2003 4.00:1.0
October 1, 2003, through December 31, 2003 3.75:1.0
Section 3.3 Sale of Assets. Section 7.5 of the Credit Agreement is
hereby amended by adding the following:
Notwithstanding the foregoing, NCP Eight may sell either all or a
portion of its operating assets subject to the prior written approval
of Agent; provided, however, that the first $1,200,000 in net proceeds
received by NCP Eight in connection with any such sale shall be
applied to the principal balance of the Loan. NCP Eight shall use any
proceeds in excess of $1,200,000 for either (a) capital expenditures
(subject to the limitations set forth in Section 7.12 below), or (b)
to further reduce the principal balance of the Loan. Any proceeds used
to reduce the principal balance of the Loan shall not be subject to
the prepayment penalty provisions set forth in Section 3.4.7.
Section 3.4 Capital Expenditure. Section 7.12 of the Credit Agreement
is hereby amended in its entirety to read as follows:
7.12 Capital Expenditures. Permit the total amount of capital
expenditures to exceed $1,200,000 in the calendar year 2002, or in any
one of the calendar years thereafter. Unused capital expenditures
under this Section 7.12 in any one year may be carried over to the
next consecutive year, but not thereafter. Nothing herein shall be
construed to extend the maturity date of the Loan beyond December 31,
2003.
Section 3.5 Blockage of Payment. Section 7 of the Subordination
Agreement is amended by deleting all references to "5.0:1.0" and replacing them
with the applicable Funded Debt to Annualized Cash Flow ratio (as set forth in
Section 7.11.3 hereof) for the applicable period.
ARTICLE IV - CONDITIONS PRECEDENT
The modifications to the Credit Agreement and the other Loan Documents
set forth in this Amendment shall not be effective unless and until the
following conditions have been fulfilled to Agent's satisfaction:
(a) Agent shall have received this Amendment, the Second Replacement
Note, and any other documents required by Agent to perfect or continue
perfection of the liens and/or security interests granted by NCP Eight under the
Security Agreement duly executed and delivered by the parties thereto.
(b) Agent shall have received, duly executed and delivered by NCP
Eight, a certificate in form and substance satisfactory to Agent, confirming
that NCP Eight's authorizing resolutions delivered to Agent have not been
revoked and that NCP Eight's limited partnership agreement has not been amended
or altered since NCP Eight delivered a copy of the agreement to Agent.
(c) Agent shall have received, duly executed and delivered by NCC, a
certificate in form and substance satisfactory to Agent, confirming that NCC' s
authorizing resolutions delivered to Agent have not been revoked and that NCC's
articles of incorporation and bylaws have not been amended or altered since NCC
Eight delivered a copy of its articles and bylaws to Agent.
(d) NCP Eight shall have paid to Agent all fees and expenses (including
attorneys' fees) incurred in connection with this Amendment.
ARTICLE V - MISCELLANEOUS
Section 5.1 Notice to U.S. Bank. The designation of the Person to be
notified at Agent and Agent's and Lenders' address for the purpose of any notice
are hereby changed to:
U.S. Bank National Association
PD-WA-T7MT
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx Xxxxxx, Vice President
Facsimile Number: (000) 000-0000
Section 5.2 Representations and Warranties. NCP Eight hereby
represents and warrants to Agent that as of the date of this Amendment, there
exists no Default or Event of Default. All representations and warranties of NCP
Eight contained in the Credit Agreement or any other Loan Document, or otherwise
made in connection therewith or herewith are true and correct as of the date of
this Amendment.
Section 5.3 Security. The parties hereto agree that all Loan
Documents, whether creating, evidencing, or perfecting Lenders' security
interests and liens against the collateral, including without limitation the
Amendment to Security Agreement, the Security Agreement, the Franchise
Assignment, the NCC Subordination Agreement, and all financing statements (a)
shall remain in full force and effect, (b) shall secure the Loan, as amended,
and all other Obligations of NCP Eight under the Credit Agreement and the other
Loan Documents, and (c) are enforceable without defense, offset, or
counterclaim.
Section 5.4 Payment of Expenses. NCP Eight shall pay on demand all
costs and expenses of Agent and Lenders incurred in connection with the
preparation, negotiation, execution, and delivery of this Amendment, including
without limitation reasonable attorneys' fees.
Section 5.5 Counterparts. This Amendment may be executed in one or
more counterparts, each of which shall constitute an original agreement, but all
of which together shall constitute one and the same agreement.
Section 5.6 Statutory Notice. ORAL AGREEMENTS OR ORAL COMMITMENTS TO
LOAN MONEY, TO EXTEND CREDIT, OR TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT
ARE NOT ENFORCEABLE UNDER WASHINGTON LAW. IN WITNESS WHEREOF, the parties hereto
have executed this Second Amendment to Credit Agreement as of the date first
above written.
NCP EIGHT: AGENT:
NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP, a U.S. BANK NATIONAL ASSOCIATION
Washington limited partnership
By: Northland Communications Corporation, a Washington /s/ Xxxxxxx Xxxxxx
corporation, its Managing General Partner ------------------------------
Xxxxxxx Xxxxxx, Vice President
By: /s/ Xxxx X. Xxxxx LENDER:
-----------------------------
Name: Xxxx X. Xxxxx
-------------------------------
Title: President U.S. BANK NATIONAL ASSOCIATION
------------------------------
/s/ Xxxxxxx Xxxxxx
------------------------------
Xxxxxxx Xxxxxx, Vice President
SOLELY FOR PURPOSES OF SECTION 3.5 HEREOF:
NCC:
NORTHLAND COMMUNICATIONS CORPORATION, a Washington
corporation
By: /s/ Xxxx X. Xxxxx
----------------------------
Name: Xxxx X. Xxxxx
--------------------------
Title: President
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