1
EXHIBIT 10.37
TICKETMASTER GROUP, INC.
SEVENTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
AND RELEASE OF THIRD PARTY PLEDGE AGREEMENT
This SEVENTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
(this "AMENDMENT") is dated as of October 24, 1996 and entered into by and among
Ticketmaster Group, Inc., an Illinois corporation ("BORROWER"), the financial
institutions listed on the signature pages hereof ("LENDERS"), Xxxxx Fargo Bank,
National Association, as agent for Lenders ("AGENT"), and the undersigned
Guarantors (for purposes of Section 6 hereof only), and is made with reference
to that certain Credit Agreement, dated as of November 18, 1994, as amended by
the First Amendment to Credit Agreement, dated as of January 6, 1995, the Second
Amendment to Credit Agreement, dated as of January 30, 1995, the Third Amendment
and Limited Waiver to Credit Agreement and Amendment to Guarantor Pledge
Agreement, dated as of April 7, 1995, the Fourth Amendment and Limited Waiver to
Credit Agreement, Amendment to Guarantor Pledge Agreement and Amendment to Third
Party Pledge Agreement, dated as of August 28, 1995, the Waiver Dated as of
April 30, 1996 to Credit Agreement, the Fifth Amendment to Credit Agreement,
dated as of June 6, 1996 and the Sixth Amendment and Limited Waiver to Credit
Agreement dated as of September 27, 1996 (as so amended, the "CREDIT
AGREEMENT"), by and among Borrower, the Lenders and Agent. Capitalized terms
used herein without definition shall have the same meanings herein as set forth
in the Credit Agreement.
RECITALS
A. Borrower intends to sell shares of its common stock in an
initial public offering of not less than $100 million and receive not less than
$90 million of cash proceeds in connection therewith (the "Borrower IPO"). Upon
receipt of proceeds from the Borrower IPO, Borrower has agreed to repay not less
than $69 million in principal amount of Term Loans (including all of the Term
Bridge Loans) and, to the extent that the net cash proceeds of the Borrower IPO
are in excess of $90 million, Borrower shall use such excess to repay additional
Term Loans.
B. In connection with the Borrower IPO, Borrower has requested
that Lenders convert all outstanding Term Loans (after giving affect to the
repayments described above) into Revolving Loans and make available $175,000,000
in principal amount of Revolving Loan Commitments under the Credit Agreement.
C. In connection with the Borrower IPO and subject to the
satisfaction of the conditions set forth in Section 3 hereof, Borrower has also
requested that Agent on behalf of Lenders release its interest in all of the
Collateral pledged under (and as defined in) the Third Party Pledge Agreement,
it being understood that, upon such release, the Third Party Pledge Agreement
shall terminate and be of no further force or effect.
1
2
D. Borrower has requested that Lenders amend or waive certain
other provisions of the Credit Agreement as provided herein. Borrower, Agent,
and each Lender desire to amend the Credit Agreement as set forth herein;
provided that all conditions precedent to the Seventh Amendment Effective Date
occur as provided herein.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO ARTICLE I.
A. Section 1.2 of the Credit Agreement is amended and restated
as follows:
"Section 1.2. `ADJUSTED LEVERAGE RATIO' means, as of
the end of each fiscal quarter of each Fiscal Year, the ratio
of (a) all Debt for borrowed money and reimbursement
obligations for letters of credit of Borrower and its
Restricted Entities to (b)(i) EBITDA of Borrower and
Restricted Entities, plus (ii) cash dividends received by
Borrower and any Restricted Entity and cash dividends declared
for the benefit of, and at that time payable to, but not yet
received by, Borrower or any Restricted Entity provided that
the payment of such dividend is not restricted in any way by
law, contract or otherwise, any such declared dividends are
received prior to the date upon which Borrower delivers
financial statements pursuant to Section 5.3(b) for such
fiscal quarter, minus (iii) distributions made by Borrower or
any Restricted Entity to minority shareholders minus (iv)
EBITDA generated by any assets or operations sold by Borrower
or any Restricted Entity during such period ("CASH FLOW") up
to and including the date of sale.
B. Section 1.4 of the Credit Agreement is amended and restated
as follows:
"Section 1.4 `APPLICABLE MARGIN' means, except as set
forth below, during each fiscal quarter of each Fiscal Year, a
percentage per annum as shown below determined by reference to
the Adjusted Leverage Ratio:
2
3
(i) with respect to the Base Rate:
Applicable
Adjusted Leverage Ratio Base Margin
less than 2.75 0.00%
2.75 or more but less than 3.25 0.125%
3.25 or more but less than 3.75 0.375%
3.75 or more but less than 4.0 0.750%
4.0 and above 1.000%
(ii) with respect to LIBOR:
Applicable
Adjusted Leverage Ratio LIBOR Margin
less than 2.75 1.00%
2.75 or more but less than 3.25 1.375%
3.25 or more but less than 3.75 1.625%
3.75 or more but less than 4.0 2.000%
4.0 and above 2.250%
The Applicable Margin for any fiscal quarter shall be determined with reference
to the Adjusted Leverage Ratio calculation based on the quarterly financial
statements of Borrower and Restricted Entities most recently delivered to Agent
pursuant to Section 5.3(b) or, if Borrower, has failed to provide such
certificate within the period set forth therein, the Applicable Margin shall be
1.00% with respect to the Base Rate and 2.25% with respect to LIBOR until such
time as such financial statements are so delivered; provided that the Applicable
Margin in effect on the first day of the Interest Period (or, in the case of any
Interest Period commencing after such financial statements are due but not
delivered, on such date as such delayed financial statements are finally
delivered) shall remain in effect throughout such Interest Period
notwithstanding any change in the Adjusted Leverage Ratio that occurs prior to
the end of such Interest Period; provided further that for any period prior to
the Seventh Amendment Effective Date, the Applicable Margin shall be calculated
in accordance with the Credit Agreement before giving effect to the Seventh
Amendment. Notwithstanding the foregoing, in connection with the calculation of
the Adjusted Leverage Ratio for the fiscal quarter ending on October 31, 1996,
Borrower shall calculate its Debt for borrowed money and reimbursement
obligations for letters of credit as of the date of the Borrower IPO after
giving effect to the repayment of all Debt in connection therewith even though
the Borrower IPO may occur after October 31, 1996."
C. Section 1.10 of the Credit Agreement is amended to delete
the phrase "or 2.2" in the definition of "Borrowing."
3
4
D. Section 1.16 of the Credit Agreement is amended and
restated as follows:
"`CHANGE OF CONTROL' means the occurrence of any of
the following events, whether or not approved by the Board of
Directors of Borrower, as the case may be, by which: (i)(a)
any Person (other than the Specified Investor) shall at any
time beneficially own, directly or indirectly, a greater
percentage of the voting stock of Borrower than that
beneficially owned by the Specified Investor; or (b) the
Specified Investor shall at any time beneficially own less
than thirty percent (30%) of the voting stock of Borrower; or
(ii) Borrower is materially or completely liquidated or is the
subject of any voluntary dissolution or winding-up or the
sale, lease, transfer or other disposition of all or
substantially all of the consolidated assets of Borrower and
its Subsidiaries in a single transaction or a series of
related transactions; or (iii) during any period of
twenty-four consecutive months, individuals who at the
beginning of such period constituted the Board of Directors of
Borrower (together with any new directors whose election by
such Board of Directors or whose nomination for election by
the shareholders of Borrower was approved by a vote of a
majority of the directors of Borrower then still in office who
were either directors at the beginning of such period or whose
election or nomination for election was previously so
approved), cease for any reason to constitute a majority of
the Board of Directors of Borrower then in office. For
purposes of this definition, "Person" includes any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act and whether or not Borrower has any capital
stock subject to such Sections and "beneficial ownership"
shall have the meaning provided in Rules 13d-3 and 13d-5 under
the Exchange Act (whether or not Borrower has any capital
stock subject to such rule). For purposes of this definition,
'Specified Investor' means Xxxx Xxxxx or any affiliate of Xxxx
Xxxxx that is controlled by Xxxx Xxxxx."
E. Section 1.21 of the Credit Agreement is amended and
restated as follows:
"SECTION 1.21. `COMMITMENTS' means the Revolving Loan
Commitments in the aggregate principal amount of ONE HUNDRED
SEVENTY FIVE MILLION DOLLARS ($175,000,000)."
F. Section 1.57 of the Credit Agreement is amended and
restated as follows:
"Section 1.57. `LOANS' means, without duplication,
the aggregate amount of Borrowings outstanding at any time
under the Revolving Loan Commitments and the Swing Line Loan
Commitment, it being understood that
4
5
as of the Seventh Amendment Effective Date, all Term Loans
shall convert to and thereafter remain outstanding as
Revolving Loans."
G. Section 1.65 of the Credit Agreement is amended and
restated as follows:
"Section 1.65. `NOTES' means, collectively, the
Revolving Loan Notes in the form of Exhibit 1.65A and any
promissory notes that may be issued in substitution, renewal,
extension, replacement or exchange therefore."
H. Section 1.72 of the Credit Agreement is amended and
restated as follows:
"Section 1.72. `PLEDGE AGREEMENTS' means,
collectively, the Borrower Pledge Agreement, the Guarantor
Pledge Agreements and the Security Agreements."
I. Sections 1.93, 1.94 and 1.95 of the Credit Agreement are
amended and restated as follows:
"Section 1.93. `TERM LOANS' means the Term Loans
outstanding under the Credit Agreement that, as of the Seventh
Amendment Effective Date, will be converted into and deemed
outstanding as Revolving Loans, it being understood that all
references to Term Loans under the Loan Documents shall be
deemed to refer to Revolving Loans on and after the Seventh
Amendment Effective Date.
Section 1.94. Intentionally Omitted.
Section 1.95. Intentionally Omitted."
J. Article I of the Credit Agreement is amended by adding the
following definitions as clauses (n), (o) and (p) in Section 2.06:
"(n) `BORROWER IPO' has the meaning set forth in the
Recitals to the Seventh Amendment.
(o) `SEVENTH AMENDMENT' means the Seventh Amendment
and Limited Waiver to Credit Agreement and Release of Third
Party Pledge Agreement dated as of October 24, 1996 among
Borrower, Agent, Lenders and Guarantors.
(p) `SEVENTH AMENDMENT EFFECTIVE DATE' means the date
on which the Seventh Amendment becomes effective in accordance
with Section 3 of the Seventh Amendment."
5
6
1.2 AMENDMENTS TO ARTICLE II.
A. Section 2.1(a) of the Credit Agreement is amended and
restated as follows:
"(a) Revolving Loans. Subject to the terms and
conditions of this Agreement, each Lender severally (but not
jointly and not jointly and severally) agrees to make loans to
Borrower on the Closing Date and from time to time thereafter
up to the Maturity Date, not to exceed at any time the
aggregate principal amount of such Lender's Pro Rata Share of
the Revolving Loan Commitments, the proceeds of which shall be
used by Borrower solely for working capital and other general
corporate purposes (including, without limitation,
Acquisitions permitted hereunder). Each Lender's commitment to
maintain and make Revolving Loans to Borrower pursuant to this
Section 2.1(a) is hereby called its `REVOLVING LOAN
COMMITMENT' and such commitments of all the Lenders in the
aggregate are herein called the `REVOLVING LOAN COMMITMENTS'.
The initial amount of each Lender's Revolving Loan Commitment
is set forth in Schedule A and the aggregate amount of all
Revolving Loan Commitments is ONE HUNDRED SEVENTY FIVE MILLION
DOLLARS ($175,000,000). The amount of the Revolving Loan
Commitments shall be reduced by the amount of all reductions
thereof made pursuant to Section 2.7 or Section 7.2 through
the date of determination. In no event shall the aggregate
principal amount of the Revolving Loans from any Lender
outstanding at any time exceed the amount of its Revolving
Loan Commitment then in effect.
Borrower may from time to time during the term of the
Revolving Loan Commitments borrow, partially or wholly repay
its outstanding Borrowings thereunder, and reborrow, subject
to all the limitations, terms and conditions contained herein.
As of the Seventh Amendment Effective Date after giving effect
to the prepayment of all Term Loans in connection with the
Borrower IPO, all remaining Term Loans then outstanding shall
be converted into Revolving Loans, and Borrower, Lenders and
Agent shall make such notations in their respective records
(including, without limitation, their Loan Accounts and the
Register) as are appropriate to reflect the increase in the
principal amount of the outstanding Revolving Loans and the
elimination of any outstanding principal amount of the Term
Loans. Such conversion shall be automatic and shall occur
without any action by, or notice to or from, Borrower, Agent,
any Lender or any other Person. Notwithstanding anything to
the contrary contained herein, all outstanding principal of
and accrued but unpaid interest on the Revolving Loans shall
be due and payable in full not later than the Maturity Date.
6
7
Notwithstanding the foregoing provisions of this
Section 2.1(a), the extensions of credit under the Revolving
Loan Commitments shall be subject to the following
limitations:
(i) The amount otherwise available for
borrowing under the Revolving Loan Commitments as of
any time of determination shall be reduced by the
Letter of Credit Usage and the aggregate principal
amount of the Swing Line Loans then outstanding as of
such time of determination, provided that
notwithstanding the foregoing, Revolving Loans may be
borrowed to reimburse Issuing Lender for the amount
of any drawings under any Letter of Credit honored by
Issuing Lender and not theretofore reimbursed by
Borrower or to reimburse the Swing Line Lender for
the amount of any Swing Line Loans outstanding;
(ii) In no event shall the Total Utilization
of Revolving Loan Commitments at any time exceed the
Revolving Loan Commitments then in effect; and
(iii) In no event shall any Lender's Pro
Rata Share of the Total Utilization of Revolving Loan
Commitments as of any date of determination exceed
its Revolving Loan Commitment then in effect;
provided that the Pro Rata Share of Issuing Lender
and Swing Line Lender shall, for purposes of this
Section 2.1(a)(iii) be determined after giving effect
to the participations described in Sections
2.1(b)(iii) and 2.1(c)(iii).
Subject to Section 2.4(g), all Revolving Loans under
this Agreement shall be made by the Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any default
by any other Lender with respect to that other Lender's
obligation to make Revolving Loans hereunder nor shall the
Revolving Loan Commitment of any Lender be increased or
decreased as a result of the default by any other Lender with
respect to that other Lender's obligation to make Revolving
Loans hereunder."
B. Section 2.2 of the Credit Agreement is amended and restated
in its entirety as follows:
"SECTION 2.2. INTENTIONALLY OMITTED."
C. Section 2.5(a) is amended and restated following the phrase
"a percentage determined by reference to the Adjusted Leverage Ratio as
set forth below:" in Section 2.5(a) as follows:
7
8
Adjusted Commitment Fee
Leverage Ratio Percentage
-------------- --------------
less than 2.75x 0.25%
2.75x or more but less than [less than symbol]3.75x 0.375%
3.75x and above 0.50%
Notwithstanding the foregoing, for any period prior to the
Seventh Amendment Effective Date, the Commitment Fee shall be calculated in
accordance with the Credit Agreement before giving effect to the Seventh
Amendment."
D. Section 2.7(b) of the Credit Agreement is amended and
restated as follows:
"(b) Mandatory Reductions. As of the close of
business on December 31, 1997, the Revolving Loan Commitments
shall be permanently reduced by an amount equal to any excess
of the Revolving Loan Commitments as then in effect over
$165,000,000; and as of the close of business on December 31,
1998, the Revolving Loan Commitments shall be permanently
reduced by an amount equal to any excess of the Revolving Loan
Commitments as then in effect over $150,000,000. In addition,
as of the date on which any mandatory prepayment of Revolving
Loans is made pursuant to Section 2.8(c)(iii) or would have
been made if Revolving Loans were outstanding, the Revolving
Loan Commitments shall be permanently reduced by the principal
amount of Revolving Loans that are prepaid in connection
therewith or would have been prepaid if Revolving Loans were
outstanding. Each such reduction shall be automatic and shall
occur without any action by, or notice to or from, Borrower,
Agent, any Lender or any other Person."
E. Section 2.8(b) of the Credit Agreement is amended and
restated as follows:
"(b) Intentionally Omitted."
F. Section 2.8(c) of the Credit Agreement is amended and
restated as follows:
"(c) Mandatory Prepayments. No later than two (2)
Business Days after receipt thereof, Borrower shall make a
prepayment of the Revolving Loans, to the extent any are
outstanding, in an amount equal to (i) 100% of the net
proceeds as and when received from each Asset Sale by Borrower
or any of its Restricted Entity, which together with all other
Asset Sales in such Fiscal Year, generated aggregate net
proceeds in excess of $500,000, (ii) 100% of the net cash
proceeds received by Borrower or any of its
8
9
Restricted Subsidiaries of any offering or sale of equity
securities of Borrower or any of its Subsidiaries, (iii) 100%
of the net cash proceeds of the issuance of any Permitted
Bonds, (iv) 100% of the amount received by Borrower or any
Restricted Entity from any Unrestricted Entity, whether
received by way of dividend, investment or otherwise, and (v)
100% of the excess of the Total Utilization of the Revolving
Loan Commitments over the Revolving Loan Commitments then in
effect. No prepayment of Revolving Loans pursuant to this
Section 2.8(c) shall result in a mandatory reduction of the
Revolving Loan Commitments other than a prepayment pursuant to
Section 2.8(c)(iii)."
G. The first sentence of Section 2.8(d) of the Credit
Agreement is amended and restated as follows:
"All prepayments made pursuant to Section 2.8(c)
shall be applied first to Base Rate Revolving Loans before
application to LIBOR Revolving Loans."
H. The first sentence of Section 2.12(a) of the Credit
Agreement is amended to delete the phrase "and Term Loan" set forth
therein. The second sentence of Section 2.12(a) of the Credit Agreement
is amended to delete the phrase "and/or Term Loan" set forth therein.
I. Section 2.12(d) of the Credit Agreement is amended to add
"and" immediately before the phrase "(iii) each" and to delete all of
clause (iv) of Section 2.12(d).
J. Section 2.15(b) of the Credit Agreement is amended and
restated as follows:
"(b) Intentionally Omitted."
1.3 ACTIONS AND AMENDMENTS UNDER ARTICLE V.
A. Section 5.3 of the Credit Agreement is amended to delete
"and" after "audit;" in Section 5.3(e), substitute "; and" for "." at
the end of Section 5.3(f) and add the following as Section 5.3(g):
"(g) as soon as practicable but in no event less than
ten days prior to the date on which any Acquisition or
acquisition of an Unrestricted Entity is consummated,
financial statements of the Acquisition Candidate or
Unrestricted Entity, as the case may be, and its subsidiaries,
if any, on a consolidated basis, for the two most recently
completed fiscal years of such person, and projected pro-forma
EBITDA for such Acquisition Candidate or Unrestricted Entity,
as the case may be, and its subsidiaries, on a consolidated
basis for a period not less than one year from the projected
date of consummation of such acquisition."
9
10
B. Section 5.9 of the Credit Agreement is amended and restated
as follows:
"SECTION 5.9. FINANCIAL CONDITION. Borrower shall maintain its
financial condition on a consolidated basis in accordance with GAAP as
demonstrated by the financial information shown on the financial statements
delivered to Lenders pursuant to Section 5.3 hereof adjusted in accordance with
Section 1.36 hereof as follows:
(a) Liquidity Ratio. At all times cause the sum of Cash plus
Cash Equivalents plus clients' accounts receivable to be at least $1.00 more
than clients' accounts payable.
(b) Maximum Leverage Ratio. As of the end of each fiscal
quarter of each Fiscal Year, a ratio of (i) Debt of Borrower and its Restricted
Entities with respect to borrowed money plus Proximate Contingent Obligations of
Borrower and its Restricted Entities, in each case on such fiscal quarter end,
to (ii) Cash Flow for the twelve month period then ended of not more than the
amount set forth below for the correlative period indicated (the "Maximum
Leverage Ratio"):
Period Maximum Leverage Ratio
------ ----------------------
November 1, 1996
through January 31, 1997 4.50 to 1
February 1, 1997
through April 30, 1997 4.15 to 1
May 1, 1997
through July 31, 1997 3.95 to 1
August 1, 1997
through October 31, 1997 3.85 to 1
November 1, 1997
through October 31, 1998 3.75 to 1
November 1, 1998 and thereafter 3.35 to 1
(c) Free Cash Flow Coverage Ratio. As of the end of each
fiscal quarter of each Fiscal Year maintain a ratio of (i) Cash Flow for the
twelve month period then ended minus the sum of (a) Capital Expenditures made by
Borrower and its Restricted Entities during such period plus (b) dividends paid
in cash on any equity securities issued by Borrower during such period plus (c)
redemptions of any such securities or other withdrawals of equity for cash
during such period to (ii) the sum of all payments made by Borrower and
Restricted Entities on account of interest on or scheduled payments of principal
of Debt
10
11
(including, without limitation, scheduled payments on capital leases but
excluding principal payments of Debt under the Credit Agreement in connection
with the Borrower IPO) of not less than the amount set forth below for the
correlative period indicated:
Period Free Cash Flow Coverage Ratio
------ -----------------------------
January 31, 1997 through April 30, 1997 1.75 to 1
May 1, 1997 through July 31, 1997 2.00 to 1
August 1, 1997 through October 31, 1997 2.25 to 1
November 1, 1997 through the Maturity Date 2.50 to 1
(d) Minimum EBITDA. The EBITDA of Borrower and its Restricted
Entities before minority distributions shall not be less than (i) $42,000,000
for the Borrower's Fiscal Year ending on January 31, 1997, (ii) $46,000,000 for
the Borrower's Fiscal Year ending on January 31, 1998 and (iii) $50,000,000 for
any Fiscal Year of the Borrower ending thereafter.
1.4 AMENDMENTS TO ARTICLE VI.
A. Section 6.2 of the Credit Agreement is amended to
substitute "$12,000,000" for "$10,000,000" set forth therein.
B. Section 6.4 of the Credit Agreement is amended to amend and
restate clause (i)(A) of Section 6.4(i) as follows: "(A) [Intentionally
Omitted]"
C. Section 6.8 of the Credit Agreement is amended to amend and
restate clauses (l) and (m) of Section 6.8 as follows:
"(l) [Intentionally Omitted], (m) [Intentionally
Omitted],"
D. The first sentence of Section 6.9 of the Credit Agreement
is amended by deleting the following words after the words "on Schedule
6.9" and before the proviso in such sentence:
"and except that Borrower may pay accrued dividends on the
preferred stock issued in connection with the Indiana
Acquisition"
1.5 WAIVER OF ARTICLES IV, V AND VI. Required Lenders hereby
waive the provisions of Articles IV, V and VI of the Credit Agreement to the
extent necessary (without regard to any exception or basket which may be
provided for therein) to permit Borrower and its Subsidiaries to enter into and
consummate the Borrower IPO; provided that nothing in
11
12
this Section 1.5 shall be deemed to amend or waive Sections 6.2, 6.4, 6.8 or
6.9, or to amend or waive the application of Articles IV, V and VI of the Credit
Agreement to the Borrower and its Subsidiaries, after giving effect to the
Borrower IPO or relating to any transaction, event or condition other than to
permit the entry into and consummation of the Borrower IPO.
1.6 AMENDMENT OF SCHEDULE A. Schedule A annexed to the Credit
Agreement is amended and restated by Schedule A annexed to this Amendment.
SECTION 2. REPLACEMENT REVOLVING LOAN NOTES AND CANCELLATION
OF PRIOR REVOLVING LOAN AND TERM LOAN NOTES
Company agrees to execute and deliver to Agent for each Lender
a Revolving Loan Note in the amount of each such Lender's Revolving Loan
Commitment (each a "REVOLVING LOAN NOTE"), in the form of Exhibit 1.65A to the
Credit Agreement. Each of the parties hereto hereby acknowledges and agrees that
each Revolving Loan Note is a Note for all purposes under the Credit Agreement
and the other Loan Documents and that the loans evidenced by the Revolving Loan
Notes shall constitute Revolving Loans for all purposes under the Credit
Agreement and the other Loan Documents. As soon as practicable following the
Seventh Amendment Effective Date, each Lender agrees to deliver any Term Notes
or other Revolving Loan notes in its possession that were issued to such Lender
prior to the date hereof to the Borrower for cancellation.
SECTION 3. CONDITIONS TO EFFECTIVENESS AND RELEASE OF THIRD
PARTY PLEDGE COLLATERAL
This Amendment shall become effective only upon the
satisfaction of all of the following conditions precedent on or prior to
December 15, 1996 (the date of satisfaction of such conditions being referred to
herein as the "SEVENTH AMENDMENT EFFECTIVE DATE"):
A. On or before the Seventh Amendment Effective Date, Borrower shall
deliver to Lenders (or to Agent for Lenders with sufficient originally executed
copies, where appropriate, for each Lender and its counsel) the following, each,
unless otherwise noted, dated the Seventh Amendment Effective Date:
1. Resolutions of its Board of Directors and the Board of
Directors of each Guarantor approving and authorizing the execution,
delivery and performance of this Amendment and approving and
authorizing the issuance, delivery and payment of the Revolving Loan
Notes (as defined herein), certified as of the Seventh Amendment
Effective Date by the applicable corporate secretary or an assistant
secretary of Borrower or such Guarantor as being in full force and
effect without modification or amendment;
12
13
2. Signature and incumbency certificates of its officers and
the officers of each Guarantor executing this Amendment and, in the
case of Borrower, the Revolving Loan Notes;
3. Executed copies of this Amendment;
4. Executed Revolving Loan Notes; and
5. An officer's certificate of Borrower certifying that each
of the requirements set forth in this Section 3, including but not
limited to Sections 3D, 3E, 3F, 3G, 3H, 3I, 3J and 3K have been fully
satisfied as of the date designated in such certificate, it being
understood and agreed that Agent and Lenders may rely on such
certificate.
B. On or before the Seventh Amendment Effective Date, Agent shall have
received from all of the Lenders by telecopy or other delivery an executed copy
of this Amendment.
C. On or before the Seventh Amendment Effective Date, Agent shall have
received originally executed copies of one or more favorable opinions from Xxxx,
Xxxxxx and Xxxxxxxxx, counsel to Borrower, in form and substance reasonably
satisfactory to Agent and its counsel, dated as of the Seventh Amendment
Effective Date with respect to the enforceability of the Amended Agreement, the
Revolving Loan Notes and as to such other matters as Agent acting on behalf of
Lenders may reasonably request.
D. On or before the Seventh Amendment Effective Date, Borrower shall
pay to Agent, for distribution to each Lender on a pro rata basis, an amendment
fee equal to .50% of the sum of Lenders' aggregate Revolving Loan Commitments,
after giving effect to this Amendment.
E. On or prior to the Seventh Amendment Effective Date, Borrower shall
have received not less than $90 million in cash in connection with the Borrower
IPO. Upon consummation of the Borrower IPO, Xxxx Xxxxx shall own more common
stock of Borrower than any other person or controlled group and in any event
shall own not less than 30% of the common stock of the Borrower.
F. Borrower or a Restricted Entity shall have consummated each of the
Acquisition Transactions (as defined in the Sixth Amendment to the Credit
Agreement) for an aggregate purchase price not to exceed $65 million and all
documentation and other terms of such Acquisition Transactions that differ from
or are in addition to the terms set forth in the letters of intent previously
delivered to Lenders shall be reasonably satisfactory to Agent and Requisite
Lenders, it being understood that the conditions set forth in this Section 3F
shall be deemed to be satisfied unless Borrower has received written notice from
Xxxxx Fargo or Requisite Lenders, as the case may be, objecting to any such
documentation or other terms prior to the date on which the other conditions to
the Seventh Amendment Effective Date have been satisfied; provided that if
Borrower has not consummated the Indiana Acquisition,
13
14
the number referenced above shall be reduced from $65 million to $38 million and
Borrower shall nevertheless be deemed to have satisfied this Section 3F even
though the Indiana Acquisition has not been consummated. If the Indiana
Acquisition is consummated prior to or concurrently with the consummation of the
Borrower IPO, all of Borrower's preferred stock issued in connection with the
Indiana Acquisition (if any) shall have been converted into Borrower's common
stock upon consummation of the IPO. The Exchangeable Promissory Note permitted
under Section 6.4(i) of the Credit Agreement before giving effect to the Seventh
Amendment issued by TM Overseas, Inc. shall have been converted either into
Borrower's common stock or paid in cash upon consummation of the Borrower IPO.
G. Borrower shall have used the net proceeds of the Borrower IPO to
repay not less than $69 million in principal amount of Term Loans (including all
of the Term Bridge Loans) under the Credit Agreement and to repay any of the
indebtedness incurred to finance the Texas Acquisition. In addition, to the
extent that the net cash proceeds of the Borrower IPO are in excess of $90
million, such excess shall have been applied to repay Term Loans, it being
understood that none of the payments under this Section 3G shall reduce the $175
million of Revolving Loan Commitments available as of the Seventh Amendment
Effective Date.
H. All governmental and third party approvals necessary in connection
with the Borrower IPO, the Acquisition Transactions, the Loan Documents, the
financings contemplated thereby and the continuing operations of the Borrower
and its Subsidiaries shall have been obtained and be in full force and effect,
and all applicable waiting periods shall have expired without any action being
taken or threatened by any competent authority which would restrain, prevent or
otherwise impose material adverse conditions on such transactions.
I. No litigation or investigation shall have been instituted or, to the
knowledge of Borrower, threatened by or against Borrower or any of its
Subsidiaries that, individually or in the aggregate, if adversely determined,
could have a material adverse effect on the business, operations, properties,
liabilities (contingent or matured), condition (financial or otherwise) or
prospects of Borrower and its subsidiaries, taken as a whole, except for matters
set forth on Schedule 4.15 to the Credit Agreement or in the Registration
Statement for the Borrower IPO delivered to the Lenders prior to the date
hereof. No developments shall have occurred in any such litigation or
investigation that are not disclosed on such Schedule or Registration Statement
referred to in the preceding sentence that, individually or in the aggregate,
could have a reasonable likelihood that such litigation or investigation will be
adversely determined if such adverse determination could have a material adverse
effect on the business, operations, properties, liabilities (contingent or
matured), condition (financial or otherwise) or prospects of Borrower and its
subsidiaries, taken as a whole, or (ii) materially increasing the likelihood
that, if adversely determined, such litigation or investigation could,
individually or in the aggregate, have a material adverse effect on the
business, operations, properties, liabilities (contingent or matured), condition
(financial or otherwise) or prospects of Borrower and its subsidiaries, taken as
a whole.
14
15
J. On or before the Seventh Amendment Effective Date, Borrower shall
deliver to Agent a list of Restricted Subsidiaries, Unrestricted Subsidiaries
and other entities in which the Borrower directly or indirectly owns an interest
as of the Seventh Amendment Effective Date that is updated and contains the
information set forth on the list delivered pursuant to Section 2K of the Fifth
Amendment to the Credit Agreement (the "Ownership List") and on or before such
date, Borrower shall cause any security interests to be granted or guaranties to
be entered into that are required under Sections 2.15 or 2.16 of the Credit
Agreement, including with respect to any Persons or equity interests listed on
the Ownership List that were not listed on the lists delivered pursuant to the
Fifth Amendment to the extent required under said Sections 2.15 and 2.16.
K. On or before the Seventh Amendment Effective Date, all corporate and
other proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Agent, acting on behalf of Lenders, and its counsel shall be
satisfactory in form and substance to Agent and such counsel, and Agent and such
counsel shall have received all such counterpart originals or certified copies
of such documents as Agent may reasonably request.
Upon receiving confirmation that the Seventh Amendment
Effective Date has occurred, Agent shall release all stock certificates pledged
by Xxxx Xxxxx under the Third Party Pledge Agreement to Xxxx Xxxxx or his
representative and, upon the delivery by Agent to such Person of such stock
certificates and the occurrence of the Seventh Amendment Effective Date, the
Third Party Pledge Agreement shall terminate and be of no further force or
effect.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment,
Borrower represents and warrants to each Lender that the following statements
are true, correct and complete:
A. CORPORATE POWER AND AUTHORITY. Borrower has all requisite
corporate power and authority to enter into this Amendment and the Revolving
Loan Notes, and to carry out the transactions contemplated by, and perform its
obligations under, the Credit Agreement as amended by this Amendment (the
"AMENDED AGREEMENT") and the other Loan Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the issuance, delivery and payment of the Revolving Loan
Notes have been duly authorized by all necessary corporate action on the part of
Borrower and each Guarantor.
C. NO CONFLICT. The execution, delivery and performance by
Borrower and each Guarantor of this Amendment and the Revolving Loan Notes, do
not violate any provision of any law or regulation applicable to Borrower or any
Guarantor, the violation of
15
16
which could reasonably be expected to have a Material Adverse Effect, or
contravene any provision of Borrower's or any Guarantor's articles of
incorporation or by-laws, or result in or constitute a Defined Default under any
contract, obligation, indenture or other instrument to which Borrower or any
Guarantor is a party or by which Borrower or any Guarantor may be bound which
default could reasonably be expected to have a Material Adverse Effect.
D. GOVERNMENTAL CONSENTS. No Governmental Approval is required
in connection with the execution, delivery and performance by Borrower or any
Guarantor of this Amendment and the Revolving Loan Notes or the performance by
Borrower or any Guarantor of the Amended Agreement or to ensure the legality,
validity or enforceability hereof or thereof.
E. BINDING OBLIGATION. This Amendment and the Revolving Loan
Notes have been duly executed and delivered by Borrower and each Guarantor (as
applicable), and this Amendment, the Revolving Loan Notes and the Amended
Agreement are the legally valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 4 of the
Credit Agreement and in the other Loan Documents are and will be true, correct
and complete in all material respects on and as of the Seventh Amendment
Effective Date to the same extent as though made on and as of that date, except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. Upon giving effect to this Amendment,
no event has occurred and is continuing or will result from the consummation of
the transactions contemplated by this Amendment that would constitute an Event
of Default or a Potential Event of Default.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Guarantors are parties to the Guaranty, the Guarantor Pledge
Agreement (in the case of certain Guarantors), the Security Agreement dated as
of March 31, 1995 and as the same has been and may be amended from time to time
(the "SECURITY AGREEMENT") by the Guarantors named therein (in the case of
certain Guarantors) and the Second Amended and Restated Trademark Mortgage
Agreement dated as of March 31, 1995 (as amended, the "TRADEMARK AGREEMENT")
between Ticketmaster Corporation and Agent (in the case of Ticketmaster
Corporation) pursuant to which each Guarantor has guarantied the Obligations on
the terms (and to the extent) set forth in the Guaranty and certain Guarantors
have created Liens in favor of Agent on certain Collateral to secure the
Obligations on the terms (and to
16
17
the extent) set forth in the Guarantor Pledge Agreement, the Security
Agreement and the Trademark Agreement. The Guaranty, the Guarantor Pledge
Agreement, the Security Agreement and the Pledge Agreement are collectively
referred to herein as the "GUARANTOR DOCUMENTS."
Each Guarantor hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Guarantor hereby confirms that each Guarantor Document to which it is a party or
otherwise bound and all Collateral encumbered thereby will continue to guaranty
or secure, as the case may be, to the fullest extent possible in accordance with
the applicable provisions of the Guarantor Documents the payment and performance
of all guarantied or secured obligations.
Without limiting the generality of the foregoing each
Guarantor hereby expressly acknowledges and consents to the conversion of all
outstanding Term Loans into Revolving Loans, the increase in the Revolving Loan
Commitments, the release of all Collateral under and as defined in the Third
Party Pledge Agreement and the termination of the Third Party Pledge Agreement
to be effected by this Amendment and hereby agrees that, for the purposes of
each Guarantor Document, the "Revolving Loans" shall mean the Revolving Loans as
so increased. Each Guarantor hereby agrees that this Amendment shall evidence
its consent to such increase in the Revolving Loans pursuant to the Revolving
Loan Commitments.
Each Guarantor acknowledges and agrees that any of the
Guarantor Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder shall be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Amendment. Each Guarantor represents and warrants that all
representations and warranties contained in the Guarantor Documents to which it
is a party or otherwise bound are true, correct and complete in all material
respects on and as of the Seventh Amendment Effective Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Guarantor acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Guarantor is not required by the terms of the Credit Agreement or any other
Loan Document to consent to the amendments to the Credit Agreement effected
pursuant to this Amendment and (ii) nothing in the Credit Agreement, this
Amendment or any other Loan Document shall be deemed to require the consent of
such Guarantor to any future amendments to the Credit Agreement.
17
18
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER LOAN DOCUMENTS. On and after the Seventh Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in 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 Amended Agreement. Except as specifically amended by
this Amendment, the Credit Agreement and the other Loan Documents shall remain
in full force and effect and are hereby ratified and confirmed. The execution,
delivery and performance of this Amendment shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of Agent or any Lender under, the Credit Agreement
or any of the other Loan Documents.
B. FEES AND EXPENSES. Borrower acknowledges that all
reasonable cost, fees and expenses as described in subsection 9.3 of the Credit
Agreement incurred by Agent and its counsel with respect to this Amendment and
the documents and transactions contemplated hereby shall be for the account of
the Borrower.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. 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 and delivered shall be deemed an original, but all
such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
18
19
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
BORROWER:
TICKETMASTER GROUP, INC.,
an Illinois corporation
By:___________________________
Title:________________________
GUARANTORS (FOR THE PURPOSES OF
SECTION 5 ONLY):
TICKETMASTER CORPORATION,
AN ILLINOIS CORPORATION
TICKETMASTER-SOUTHERN
CALIFORNIA, INC., A CALIFORNIA
CORPORATION
TICKETMASTER-ARIZONA, INC., AN
ARIZONA CORPORATION
TICKETMASTER CORPORATION OF
WASHINGTON, A WASHINGTON
CORPORATION
TICKETMASTER-COLORADO, INC., A
COLORADO CORPORATION
TICKETMASTER-INDIANA, INC., AN
INDIANA CORPORATION
TICKETMASTER-GEORGIA, INC., A
GEORGIA CORPORATION
TICKETMASTER-CHICAGO, INC., AN
ILLINOIS CORPORATION
TICKETMASTER-MIDWEST, INC., A
MINNESOTA CORPORATION
By:_____________________________
Xxxxx X. Xxxxxxx
Its: Senior Vice President and
Chief Financial Officer
S-1
20
TICKETMASTER ADVERTISING
COMPANY, AN ILLINOIS CORPORATION
TMC CONSULTANTS, INC., AN
ILLINOIS CORPORATION
TICKETMASTER-TENNESSEE, INC., A
TENNESSEE CORPORATION
TICKETMASTER-LAS VEGAS, INC., A
NEVADA CORPORATION
TMNY HOLDINGS, INC., A NEW YORK
CORPORATION
TICKETMASTER-NEW YORK, INC., A
DELAWARE CORPORATION
TICKETMASTER-MICHIGAN, INC., A
MICHIGAN CORPORATION
TICKETMASTER FLORIDA
MANAGEMENT CORPORATION, A
FLORIDA CORPORATION
TICKETMASTER EUROPE, INC.,
A DELAWARE CORPORATION
TICKETMASTER-TEXAS MANAGEMENT
CORPORATION, A DELAWARE
CORPORATION
ENTERTAINMENT STRATEGIES, LTD.,
A CALIFORNIA CORPORATION
TICKETMASTER-NEW ORLEANS, INC.,
A LOUISIANA CORPORATION
TICKETMASTER CORPORATION,
A DELAWARE CORPORATION
TICKETMASTER TICKETING CO., INC., A
DELAWARE CORPORATION
TM OVERSEAS, INC., A
DELAWARE CORPORATION
TICKETMASTER EUROPE GROUP, A
DELAWARE JOINT VENTURE
TICKETMASTER D.V., INC.,
A DELAWARE CORPORATION
By:_____________________________
Xxxxx X. Xxxxxxx
Authorized Officer
S-2
21
LENDERS:
XXXXX FARGO BANK, NATIONAL
ASSOCIATION, individually as a Lender and
as Agent
By:__________________________________
Title:_______________________________
U.S. BANK OF WASHINGTON, N.A.,
as a Lender
By:__________________________________
Title:_______________________________
BANQUE NATIONALE DE PARIS,
as a Lender
By:__________________________________
Title:_______________________________
FIRST BANK NATIONAL ASSOCIATION,
as a Lender
By:__________________________________
Title:_______________________________
CITY NATIONAL BANK,
as a Lender
By:__________________________________
Title:_______________________________
S-3
22
THE NIPPON CREDIT BANK, LTD., LOS
ANGELES AGENCY, as a Lender
By:___________________________________
Title:________________________________
SEATTLE FIRST NATIONAL BANK,
as a Lender
By:___________________________________
Title:________________________________
KREDIETBANK N.V.,
as a Lender
By:___________________________________
Title:________________________________
SUMITOMO BANK OF CALIFORNIA,
as a Lender
By:___________________________________
Title:________________________________
S-4
23
ANNEX A
SCHEDULE A
SCHEDULE A
LENDERS, PRO RATA SHARES AND REVOLVING LOAN COMMITMENTS
Revolving Loan
Lender Pro Rate Share Commitments
------ -------------- ---------------
Xxxxx Fargo Bank, N.A. 34.857142851% $ 61,000,000
First Bank National Association 14.28571429% $ 25,000,000
Seattle First National Bank 11.428571428% $ 20,000,000
U.S. Bank of Washington, N.A. 8.57142857% $ 15,000,000
The Nippon Credit Bank, Ltd.,
Los Angeles Agency 8.57142857% $ 15,000,000
Banque Nationale de Paris 5.14285714% $ 9,000,000
City National Bank 2.85714286% $ 5,000,000
Kredietbank N.V. 8.571428571% $ 15,000,000
Sumitomo Bank of California 5.714285714% $ 10,000,000
------------ ----------
Total: 100% $ 175,000,000.00
A-1
