1
EXHIBIT 10.2
NINTH AMENDMENT TO CREDIT AGREEMENT
THIS NINTH AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as of
June 29, 2001 by and among ACME TELEVISION, LLC, a Delaware limited liability
company (the "Borrower"); the financial institutions which are now, or in
accordance with ARTICLE XIII of the Credit Agreement (hereinafter described) are
hereafter, parties to the Credit Agreement by execution of the signature pages
thereto or otherwise (collectively, the "Lenders" and each individually, a
"Lender"); CANADIAN IMPERIAL BANK OF COMMERCE ("CIBC"), as administrative agent
for the Lenders (in such capacity as Agent, together with its successors and
assigns in such capacity, the "Agent"); and BANKERS TRUST COMPANY, as
syndication agent for the Lenders (together with its successors and assigns in
such capacity, the "Syndication Agent").
RECITALS
A. The Borrower, certain "Lenders" named therein, the Agent and the
Syndication Agent are parties to a First Amended and Restated Credit Agreement
dated as of December 2, 1997, as previously amended by Amendment No. 1 and
Amendment No. 2, each dated as of June 30, 1998, the Third Amendment to Credit
Agreement dated as of March 31, 1999, the Fourth Amendment to Credit Agreement
dated as of April 23, 1999, the Fifth Amendment to Credit Agreement dated as of
September 2, 1999, the Sixth Amendment to Credit Agreement dated as of December
31, 1999, the Seventh Amendment to Credit Agreement dated as of December 29,
2000 and the Eighth Amendment to Credit Agreement dated as of March 31, 2001 (as
so amended, the "Credit Agreement"). Capitalized terms used herein without
definition have the meanings assigned to them in the Credit Agreement, unless
otherwise provided.
B. The Borrower has requested certain amendments to the financial
covenants set forth in the Credit Agreement.
C. The Lenders are willing to agree to such amendment subject to the
conditions set forth herein.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
I. AMENDMENT TO CREDIT AGREEMENT. Subject to the satisfaction of each of the
conditions set forth in SECTION IV, the Lenders hereby agree with the Borrower
that the Credit Agreement shall be amended as follows:
A. CONDITIONS TO LOANS. SECTION 3.03 of the Credit Agreement is hereby
amended by adding at the end thereof new paragraphs (f), (g) and (h) reading as
follows:
(f) Without limiting the generality of SECTION 3.03(b), as of the date of
the proposed Loans, and immediately after giving effect thereto, the Borrower
shall be in compliance with the requirements of SECTION 5.08, as certified in
detail by the Borrower's chief financial officer in the Request for Advances.
2
(g) The Parent shall have invested all of the Parent Reserve under the
Contribution Agreement as of the Borrowing Date for such proposed Loans.
(h) Liquid Assets of the Borrower shall not exceed $2,000,000 as of the
Borrowing Date for such proposed Loans.
B. FINANCIAL COVENANTS. ARTICLE V of the Credit Agreement is hereby
amended as follows:
1. MINIMUM EBITDA. SECTION 5.01 of the Credit Agreement is hereby amended
for all periods after the date hereof by deleting the Table set forth therein
and substituting therefor the following:
FOUR FISCAL
QUARTERS ENDING MINIMUM EBITDA
--------------- --------------
June 30, 2001 $14,500,000
September 30, 2001 $12,000,000
December 31, 2001 $24,000,000
March 31, 2002 $26,000,000
June 30, 2002 $28,000,000
September 30, 2002 $31,000,000
2. CASH INTEREST COVERAGE. SECTION 5.04 of the Credit Agreement is hereby
amended for all periods after the date hereof by deleting the Table set forth
therein and substituting therefor the following:
MINIMUM RATIO OF EBITDA TO
QUARTERLY DATE(s) CASH INTEREST EXPENSE
----------------- ---------------------
June 30, 2001 No Required Minimum
September 30, 2001 No Required Minimum
December 31, 2001 1.10:1.00
March 31, 2002 1.15:1.00
June 30, 2002 1.20:1.00
September 30, 2002 1.25:1.00
3. PRO FORMA DEBT SERVICE COVERAGE. A new SECTION 5.08 is hereby added to
the Credit Agreement, reading in its entirety as follows:
SECTION 5.08. PRO FORMA DEBT SERVICE COVERAGE. At all times from the date
hereof through and including the date as of which the Lenders shall have
received the financial
- 2 -
3
statements for the fiscal quarter ended December 31, 2001, with respect to the
applicable Test Period indicated below, maintain a ratio of (a) EBITDA plus
Liquid Assets as of the date of determination plus the Parent Reserve as of the
date of determination to (b) Pro Forma Debt Service for the period of four (4)
fiscal quarters commencing one day after the last day of the Test Period of at
least the following.
TEST PERIOD MINIMUM RATIO
----------- -------------
Four fiscal quarters ending June 30, 2001 1.15:1.00
Four fiscal quarters ending September 30, 2001 1.00:1.00
C. ADDITIONAL EQUITY CONTRIBUTIONS; PARENT RESERVE. ARTICLE VI of the
Credit Agreement is hereby amended to read in its entirety as follows:
SECTION 6.12. EQUITY CONTRIBUTIONS.
(a) For the purposes set forth below, maintain available cash equity
contributions, as provided under the Contribution Agreement, in an aggregate
amount equal to the greater of (a) $13,000,000 or (b) the aggregate amount of
cash on hand and cash equivalents of the Parent as of June 29, 2001, to the
extent the same exceeds $7,500,000, which amount shall be permanently reduced by
(i) any voluntary cash equity contributions made by the Parent to the Borrower
after June 29, 2001 and (ii) up to $2,500,000 in the aggregate, but only (dollar
for dollar) to the extent that the Borrower obtains commitments for New Lease
Financing, provided that such financing is funded before January 1, 2002. As
used herein, the term "New Lease Financing" means additional lease or vendor
financing commitments to finance Adjusted Capital Expenditures (as permitted
under SECTIONS 7.01(g) and 7.02(g) and excluding the Borrower's existing lease
facility provided by Union Bank of California). The cash and cash equivalents
required to be maintained by the Parent for the benefit of the Borrower as
provided herein, after giving effect to the reductions made as described in this
SECTION, shall be referred to as the "Parent Reserve".
(b) To the extent that the Borrower fails to obtain New Lease Financing as
scheduled in the Table below for any fiscal period, call against the Parent
Reserve, within ten (10) days after the end of such fiscal period, to finance
the shortfall, with payments to be made under the Contribution Agreement within
thirty (30) days after the end of such fiscal period.
- 3 -
4
FISCAL PERIOD PROJECTED NEW LEASE FINANCING
------------- -----------------------------
July 1 through $2,400,000
December 2001
January 1 through None projected
March 31, 2002
April 1 through June 30, 2002 $6,000,000
July 1 through $2,500,000
September 30, 2002
(c) Upon the occurrence and during the existence of any Event of Default,
upon written notice from the Agent, on behalf of the Required Lenders, call
against the Parent Reserve, on the same Business Day that such notice is
received, for immediate investment of the full amount thereof.
D. DEFINITIONS. ARTICLE IX of the Credit Agreement is hereby amended as
follows:
1. By deleting, for all fiscal periods ending on and after June 30, 2001,
the last sentence of the definition of "EBITDA".
2. By replacing the definition of "CONTRIBUTION AGREEMENT" with the
following:
CONTRIBUTION AGREEMENT. The Restated and Amended Contribution Agreement
dated as of June 29, 2001 between the Parent and the Borrower, as
originally executed and delivered.
3. By adding the following new definitions:
NEW LEASE FINANCING. See SECTION 6.12.
PARENT RESERVE. See SECTION 6.12.
PRO FORMA DEBT SERVICE. For any period of four (4) fiscal quarters, (a)
Cash Interest Expense for such period, provided that the interest rate or
rates applicable to any Indebtedness (i) shall be determined based upon the
rate or rates in effect on the date of such computation and (ii) shall,
with respect to the Loans, be based on Loans outstanding as of the date of
determination; and (b) principal payable under Capital Leases during such
period, based on Capital Leases outstanding as of the date of
determination, as certified by the Borrower in the applicable compliance
certificate or Loan Request.
TEST PERIOD. As of any date, the period of four (4) fiscal quarters most
recently ended for which financial statements and compliance certificates
have been provided as required under SECTION 6.05(a), (b) and (c), as
applicable.
E. EVENTS OF DEFAULT. ARTICLE VIII of the Credit Agreement is hereby
amended by adding the word "or" at the end of paragraph (p) thereof and by
adding the following paragraph (q):
(q) for any reason, the Parent shall fail to invest all or any portion of
the Parent Reserve required to be invested under the Contribution Agreement or
SECTION 6.12 of this Agreement, the
- 4 -
5
Contribution Agreement shall not be in full force and effect in all material
respects or shall not be enforceable in all material respects in accordance with
its terms or the Parent shall disavow or disaffirm its obligations thereunder;
II. REFERENCES IN SECURITY DOCUMENTS; CONFIRMATION OF SECURITY. All references
to the "Credit Agreement" in all Security Documents, and in any other Loan
Documents shall, from and after the date hereof, refer to the Credit Agreement,
as amended by this Amendment, and all obligations of the Borrower under the
Credit Agreement, as amended, shall be secured by and be entitled to the
benefits of said Security Documents and such other Loan Documents. All Security
Documents heretofore executed by the Borrower and its Subsidiaries shall remain
in full force and effect and such Security Documents, as amended hereby, are
hereby ratified and affirmed.
III. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER. The Borrower
hereby represents and warrants to, and covenants and agrees with, the Agent and
the Lenders that:
A. The execution and delivery of this Amendment, the Joinder hereto and
the Contribution Agreement have been duly authorized by all requisite corporate
action on the part of the Borrower, the Subsidiaries and the Parent.
B. The representations and warranties contained in the Credit Agreement
and the other Loan Documents are true and correct in all material respects on
and as of the date of this Amendment as though made at and as of such date.
Since the Closing Date (and, without limitation thereof, since December 31,
2001), no event or circumstance has occurred or existed which could reasonably
be expected to have a Material Adverse Effect. As of the date hereof and after
giving effect to this Amendment, no Default has occurred and is continuing.
C. Neither the Borrower nor any Affiliate of the Borrower (including
without limitation the Subsidiaries and the Parent) is required to obtain any
consent, approval or authorization from, or to file any declaration or statement
with, any Governmental Authority (including any Specified Authority), or any
other Person in connection with or as a condition to the execution, delivery or
performance of this Amendment, the Joinder hereto or the Contribution Agreement.
D. This Amendment, the Joinder hereto and the Contribution Agreement
constitute the legal, valid and binding obligations of the Borrower, its
Subsidiaries and the Parent enforceable against them, jointly and severally, in
accordance with their respective terms, subject to bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the rights and remedies of
creditors generally or the application of principles of equity, whether in any
action at law or proceeding in equity, and subject to the availability of the
remedy of specific performance or of any other equitable remedy or relief to
enforce any right thereunder.
IV. CONDITIONS. The willingness of the Agent and the Lenders to amend the
Credit Agreement, is subject to the following conditions:
- 5 -
6
A. The Borrower shall have executed and delivered to the Agent (or shall
have caused to be executed and delivered to the Agent by the appropriate
persons) the following:
1. On or before the date hereof:
(a) This Amendment.
(b) The Restated and Amended Contribution Agreement between the
Borrower and the Parent, substantially in the form attached as EXHIBIT A
hereto.
(c) The attached Joinder, duly authorized, executed and delivered by
the Borrower's Subsidiaries.
(d) True and complete copies of any stockholders' consents and/or
resolutions of the board of directors or other governing body of each of
the Borrower, the Subsidiaries and the Parent, authorizing the execution
and delivery of this Amendment, the Joinder hereto and the Contribution
Agreement, respectively, certified by the appropriate officer(s).
B. The sum of the Parent Reserve and Liquid Assets of the Borrower shall
equal or exceed $17,500,000.
V. MISCELLANEOUS.
A. As provided in the Credit Agreement, the Borrower agrees to reimburse
the Agent upon demand for all reasonable fees and disbursements of counsel to
the Agent incurred in connection with the preparation of this Amendment and the
Joinder hereto.
B. This Amendment and the Joinder hereto shall be governed by and
construed in accordance with the internal laws of the State of New York
(excluding the laws applicable to conflicts or choice of laws).
C. This Amendment and the Joinder hereto may be executed by the parties
hereto in several counterparts hereof and by the different parties hereto on
separate counterparts hereof, all of which counterparts shall together
constitute one and the same agreement. Delivery of an executed signature page of
this Amendment and of the attached Joinder by facsimile transmission shall be
effective as an in-hand delivery of an original executed counterpart hereof.
- 6 -
7
IN WITNESS WHEREOF, the Agent, the Borrower and the Lenders have caused
this Amendment to be duly executed as a sealed instrument by their duly
authorized representatives, all as of the day and year first above written.
BORROWER:
ACME TELEVISION, LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Xxxxxx X. Xxxxx, Executive Vice
President
AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE,
AS AGENT
By: /s/ Xxxxxx Xxxx
---------------------------------------
Xxxxxx Xxxx, Executive Director
CIBC World Markets Corp., as Agent
SYNDICATION AGENT:
BANKERS TRUST COMPANY,
AS SYNDICATION AGENT
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxx, Director
LENDER:
CIBC INC.
By: /s/ Xxxxxx Xxxx
---------------------------------------
Xxxxxx Xxxx, Executive Director
CIBC World Markets Corp., as Agent
8
LENDER:
BANKERS TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxx, Director
9
JOINDER BY GUARANTORS
The undersigned hereby jointly and severally join in the execution of the
foregoing Ninth Amendment to Credit Agreement dated as of June 29, 2001 (the
"Amendment") to which this Joinder is attached to confirm their respective
consents to all of the transactions contemplated by the Amendment and all
agreements and instruments executed and delivered in connection therewith and
hereby jointly and severally reaffirm and ratify (a) the respective Guarantees
of the undersigned and (b) all agreements securing such Guarantees, all of which
shall in all respects remain in full force and effect and shall continue to
guarantee any and all indebtedness, obligations and liabilities of the Borrower
to the Agent and the Lenders, whether now existing or hereafter arising, on the
same terms and conditions as are set forth in their respective Guarantees.
ACME Television of Oregon, LLC
ACME Television Licenses of Oregon, LLC
ACME Television of Tennessee, LLC
ACME Television Licenses of Tennessee, LLC
ACME Television of Utah, LLC
ACME Television Licenses of Utah, LLC
ACME Television of New Mexico, LLC
ACME Television Licenses of New Mexico, LLC
ACME Subsidiary Holdings III, LLC
ACME Television of Missouri, Inc.
ACME Television Licenses of Missouri, LLC
ACME Television of Florida, LLC
ACME Television Licenses of Florida, LLC
ACME Television Licenses of Illinois, LLC
ACME Television of Illinois, LLC
ACME Television Licenses of Ohio, LLC
ACME Television of Ohio, LLC
ACME Television Licenses of Wisconsin, LLC
ACME Television of Wisconsin, LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------------------
Duly authorized signatory as to all
