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EXHIBIT 10.45
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This first amendment to amended and restated credit agreement
("Amendment"), dated as of March 30, 1998, is made and entered into between
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"), and NORTHLAND CABLE PROPERTIES
EIGHT PARTNERSHIP, a Washington limited partnership ("NCP Eight"). Words and
phrases with initial capital letters shall have the meanings given to them in
Article I of this Amendment.
RECITALS:
A. On or about January 4, 1996, NCP Eight and U.S. Bank, as
Lender and Agent, entered into that certain amended and restated credit
agreement (together with all supplements, exhibits, modifications and
amendments thereto, the "Credit Agreement"), whereby Lenders extended to NCP
Eight additional credit on the terms and conditions set forth in the Credit
Agreement.
B. NCP Eight and Lenders have agreed to modify the Incremental
Rate, the repayment terms and maturity date of the Note, the definition of
"Cash Flow," and certain other provisions of the Credit Agreement. The purpose
of this Amendment is to set forth the terms and conditions of Lenders' and NCP
Eight's agreement.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions set forth herein, the parties agree as follows:
ARTICLE I. DEFINITIONS, ETC.
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 otherwise requires.
1.2 Modified or Additional Defined Terms. Section 1.1 of the
Credit Agreement is hereby amended to modify (if presently defined in Section
1.1 of the Credit Agreement) or add (if not presently defined in Section 1.1
of the Credit Agreement) the following defined terms:
"Cash Flow" means, for the relevant period, NCP Eight's earnings
before charges against income consisting of (a) depreciation of real and
personal property; (b) amortization or write-off of goodwill and other
intangibles; (c) payment of Partner Distributions and of interest on
Indebtedness; and (d) any deferred Management Fee and Deferred Operating
Expenses (net of payments made during the relevant period with respect to any
prior period's deferred Management Fee or Deferred Operating Expenses). Cash
Flow will be computed using generally accepted accounting principles,
consistently applied, and will exclude any gain or loss on the sale of assets.
"Deferred Operating Expense" means any deferred operating expense
of NCP Eight that is payable to an Affiliate.
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"Excess Cash Flow" means, for the relevant period, the amount by
which Cash Flow exceeds the sum of, without duplication, (a) Debt Service, (b)
capital expenditures not funded with additional contributions of equity,
Subordinated Debt, or Funded Debt, (c) any deferred Management Fee, (d) Partner
Distributions, and (e) Deferred Operating ]Expenses.
"LIBOR Rate" means, for any Interest Period, the rate per annum
(computed on the basis of a 360-day year and the actual number of days elapsed)
established by Agent as its LIBOR Rate based on Agent's determination,
considering such factors as Agent deems relevant, of the rate of interest at
which U.S. dollar deposits would be offered to U.S. Bank National Association in
the London interbank market at approximately 11:00 a.m. London time on the date
which is two Business Days prior to the first day of the applicable Interest
Period for delivery on the first day of such Interest Period for the number of
months therein; provided, however, that the LIBOR Rate shall be adjusted to take
into account the maximum reserves required to be maintained for Eurocurrency
liabilities by banks during each such Interest Period as specified in Regulation
D of the Board of Governors of the Federal Reserve System, as in effect from
time to time, or any successor regulation.
"Partner Distributions" means NCP Eight's distributions to its
partners in an amount necessary to cover the incremental increase in taxes of
each of the partners due to the pass through of NCP Eight's net income under
Subchapter K of the Internal Revenue Code of 1986, assuming that such partners
are taxed at the highest marginal tax rate for federal income taxes.
"U.S. Bank" means U.S. Bank National Association, a national
banking association, as successor in interest to U. S. Bank of Washington,
National Association, and its successors and assigns.
1.3 Collateral. The definition of "Collateral" in Section 1.1 of
the Credit Agreement is hereby amended to correctly refer to the defined terms
of the documents evidencing NCP Eight's grant of security interests to Lenders
as the "Security Agreement" and the "Amendment to Security Agreement."
1.4 LIBOR Rate-Based Interest Rate. The Credit Agreement is
hereby amended by deleting the definition of "IBOR Rate" in its entirety and by
modifying each of the other defined terms that include the abbreviation "IBOR,"
such that any reference to "IBOR Rate Loan" means "LIBOR Rate Loan."
1.5 Incorporation of Recitals and Exhibits. The foregoing
recitals are incorporated in this Amendment by reference. All references to
"Exhibits" contained herein are references to exhibits attached hereto, the
terms and conditions of which are made a part hereof for all purposes.
1.6 Amendment. The Credit Agreement and the other Loan Documents
are hereby amended as set forth herein. Except as specifically provided herein,
all the terms and conditions of the Credit Agreement and each of the other Loan
Documents shall remain in full force and effect throughout the term of the Loan,
and any extensions or renewals thereof.
ARTICLE II. MODIFICATION OF LOAN
2.1 Interest Rate Modifications. Sections 3.4.1, 3.4.2, and 3.4.3
of the Credit Agreement are hereby amended in their entirety to read as follows:
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3.4.1 Prime Rate. Upon giving notice not later than 10 a.m.,
local time, of the date of borrowing, conversion, or renewal, NCP Eight shall
receive a Prime Rate Loan bearing interest on the outstanding principal amount
thereof at a rate equal to the Prime Rate plus 1.00 percent per annum or such
Incremental Rate as authorized by Section 3.4.3 below.
3.4.2 LIBOR Rate. Upon two Business Days' notice NCP Eight shall
have the right to select LIBOR Rate Loans in amounts not less than $500,000
initially, and in multiples of $100,000 thereafter, for an Interest Period.
LIBOR Rate Loans shall bear interest at the LIBOR Rate, plus 3.00 percent per
annum, or such Incremental Rate as authorized by Section 3.4.3 below. Agent's
LIBOR Rate is established as of approximately 8 a.m. and 10 a.m. each Business
Day, and LIBOR Rate quotes may be obtained from the Agent between 8 a.m. and
noon. Quotes based on rates set at 8 a.m. must be accepted by 10 a.m.
Quotes set at 10 a.m. must be accepted by 12:00 noon.
3.4.3 Changes in Incremental Rates. The Incremental Rates shall
be changed with certain reductions or increases in the ratio of Funded Debt to
Annualized Cash Flow for any Quarter; provided that there is then no Default or
Event of Default. Changes shall be effective on the first day of the Quarter
following the Quarter in which the requisite ratio was achieved and shall remain
in effect so long as the required ratio is maintained.
Ratio of Funded Debt to Prime LIBOR
Annualized Cash Flow Incremental Incremental
(rounded to nearest hundredth) Rate Rate
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More than 5.5:1 1.00% 3.00%
5.0:l to 5.5:1 0.50% 2.50%
less than 5.0:1 0.25% 2.00%
If NCP Eight fails to comply with the required Funded Debt to
Annualized Cash Flow ratio set forth in this Section 3.4.3, the
Incremental Rate shall increase to the percentage rate applicable
to the Corresponding ratio, effective as of the first day of each
Quarter in which such ratio increases.
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 Note shall be paid Quarterly,
commencing March 31, 1996, 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. The principal balance of the Loan outstanding
at the expiration of the Commitment Period shall be paid Quarterly, with the
first payment due on June 30, 1998, and the entire balance due and payable on
December 31, 2002, notwithstanding anything to the contrary in Section 3.1
hereof. The Quarterly payments shall be in the amounts set forth below:
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For Any Quarter Amount of
Ending during or On: Payment
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June 30, 1998 through Dec. 31, 1998 $100,000
March 31, 1999 $100,000
June 30, 1999 through Sept. 30, 1999 $125,000
December 31, 1999 $125,000
March 31, 2000 through Dec. 31, 2000 $162,500
March 31, 2001 through Dec. 31, 2001 $212,500
March 31, 2002 through Sept. 30, 2002 $230,000
December 31, 2002 Balance
2.3 Replacement Note. The Loan shall be evidenced by a promissory
note in the form attached to this Amendment as Exhibit A ("Replacement Note').
The 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, that certain revolving note dated January 4, 1996, in the principal
amount of $11,925,000. The revolving note shall be marked "replaced" and
retained by Agent until the loan shall have been paid in full.
2.4 Loan Extension Fee. Concurrently with the execution of this
Amendment, NCP Eight shall pay Agent a nonrefundable loan fee in the amount of
$54,625.
ARTICLE III. MODIFICATION OF COVENANTS
3.1 Interest Rate Protection. Section 6.16 of the Credit
Agreement is hereby amended to provide that NCP Eight shall maintain interest
rate protection arrangements on terms required under Section 6.16 of the Credit
Agreement for a period of not less than two years from the date of this
Amendment.
3.2 Distributions. Section 7.1 of the Credit Agreement is hereby
amended in its entirety to read as follows:
7.1 Distributions. Declare or pay any cash distributions or
return any capital to any partner of NCP Eight or authorize or make any
distribution, payment, or delivery of property or cash to any partner, or
redeem, retire, purchase, or otherwise acquire, directly or indirectly, for
consideration, any interest now or hereafter outstanding or set aside any funds
for any of the foregoing purposes, except so long as there exists no Default or
Event of Default, and no such payment or distributions shall create or be likely
to create a Default or Event of Default, NCP Eight may make the following
distributions- (a) a management fee to its General Partner not to exceed 5
percent of NCP Eight's annual gross revenue (the "Management Fee"), (b) Partner
Distributions, and (c) distributions to partners not to exceed, during any
fiscal year, the amount of Excess Cash Flow payments made to Lenders during such
fiscal year.
3.3 Cash Flow Maintenance. Section 7. 11 of the Credit Agreement
is hereby amended in its entirety to read as follows:
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7.11 Cash Flow Maintenance.
7.11.1 Cash Flow to Debt Service. As of the end of any Quarter
during the term of the loan commencing March 31, 1998, permit the ratio of (a)
the sum of (i) such Quarter's Cash Flow plus (ii) NCP Eight's cash on hand (up
to a maximum of $250,000) on the last day of the immediately preceding Quarter
to (b) such Quarter's Debt Service to be less than 1.25: 1.
7.11.2 Cash Flow Coverage. As of the end of any fiscal year of
NCP Eight during the term of the Loan, commencing December 31, 1998, permit the
ratio of (a) the sum of (i) such fiscal year's Cash Flow plus (ii) NCP Eight's
cash on hand (up to a maximum of $250,000) on the last day of the immediately
preceding fiscal year end to (b) the sum of (i) Debt Service, (ii) capital
expenditures not funded by additional contributions of equity, Subordinated
Debt, or Funded Debt, (iii) Partner Distributions paid in cash, and (iv) other
distributions to partners paid in cash during such fiscal year to be less than
1.0:1.
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, 1998, through December 31, 1998 6.00:1.0
March 31, 1999, through December 3 1, 1999 5.50:1.0
March 31, 2000, through December 31, 2000 5.00:1.0
March 31, 2001, through December 31, 2001 4.50:1.0
March 31, 2001, and thereafter 4.00:1.0
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 $700,000 in the calendar year 1998, or in any 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.
3.5 Funded Debt to Equivalent Subscriber Ratio. Section 7.13.2 of
the Credit Agreement is hereby amended in its entirety to read as follows:
7.13.2 Funded Debt to Equivalent Subscriber Ratio. On any of the
dates set forth below, permit Funded Debt, per Equivalent Subscriber, to exceed
the following amounts:
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As of: Funded Debt Per
------ Equivalent Subscriber
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December 31, 1998 $900
December 31, 1999 $850
December 31, 2000 $800
December 31, 2001, and thereafter $700
3.6 Deferral of Payments. Section 7.16 of the Credit Agreement is
hereby amended in its entirety to read as follows:
7.16 Deferred Operating Expense. Pay any Deferred Operating
Expense (a) when a Default or Event of Default has occurred or when payment of
the Deferred Operating Expense will create or is likely to create a Default or
Event of Default, or (b) on any day that is later than 12 months after the
operating expense was deferred.
ARTICLE IV. WAIVER OF DEFAULTS
4.1 Waiver. NCP Eight acknowledges that it failed to comply with
the financial covenants set forth in Sections 7.11.3 and 7.12 of the Credit
Agreement as of December 31, 1997. U.S. Bank waives its rights and remedies
related to NCP Eight's violations of Sections 7.11.3 and 7.12 of the Credit
Agreement as of December 31, 1997. U.S. Bank's waiver of NCP Eight's Default is
expressly limited to those Defaults as of December 31, 1997, and is not
applicable to any other covenant, financial or otherwise, contained in the
Credit Agreement or in any other Loan Document.
4.2 Release. As a condition of Lenders' waiver set forth in
Section 4.1 of this Amendment, NCP Eight hereby expressly covenants, promises,
and agrees that it shall not now or hereafter institute, maintain, or assert,
either directly or indirectly, any claim or demand, or right or cause of action,
known or unknown, that has accrued or that could have been made or brought at
any time up to and including the date of this Amendment against Agent or Lenders
or any of their respective successors, affiliates, officers, directors,
employees, or agents, past or present, arising out of or claiming to arise out
of any past or present relationship, whether contractual or otherwise, between
Agent and/or Lenders and NCP Eight. This release may be treated as a full and
complete defense to, and may be used for the basis for an injunction against,
any action, suit, arbitration, or other procedure or testimony that may be
instituted by NCP Eight.
ARTICLE V. 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 and the Replacement
Note, duly executed and delivered by the parties thereto.
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(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) On or before May 29, 1998, Agent shall have received, with
respect to the newly constructed headend facility along Highway 17 near Reform,
Xxxxxxx County, Alabama (the "New Headend Site") ' an executed fixture filing
perfecting Lenders' security interest in Collateral at the New Headend Site and
a form UCC-3 change statement covering personal property Collateral at the New
Headend Site.
(d) NCP Eight shall have paid to lender all fees and expenses
required to be paid by NCP Eight, including without limitation the nonrefundable
loan fee of $54,625.
ARTICLE VI. GENERAL PROVISIONS
6.1 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
0000 Xxxxx Xxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Vice President
Facsimile Number: (000) 000-0000
6.2 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.
6.3 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.
Without limiting the scope of the foregoing agreement, NCP Eight hereby
acknowledges and agrees that its lease with respect to the New Headend Site is a
Material Agreement and that it is among the "Rights" assigned to Lenders under
the Franchise Assignment.
6.4 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 attorney fees.
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6.5 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.
6.6 Statutorv 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 WASHNGTON LAW.
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IN WITNESS OF, Agent and Lenders and NCP Eight have caused this Amendment to be
duly executed to be effective as of March 30, 1998, although signed after that
date.
NCP EIGHT:
NORTHLAND CABLE PROPERTIES EIGHT
LIMITED PARTNERSHIP
By: Northland Communications
Corporation, its
Managing General Partner
BY
Title
AGENT:
U.S. BANK NATIONAL ASSOCIATION
BY
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Xxxxxxx X. Xxxxxxxx, Vice President
LENDER:
U.S. BANK NATIONAL ASSOCIATION
By
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Xxxxxxx X. Xxxxxxxx, Vice President
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