CONSENT AND AMENDMENT NO. 2 dated as of September 14, 2006
Exhibit 10.17
CONSENT AND AMENDMENT NO. 2
dated as of September 14, 2006
Reference is made to the Second Lien Senior Secured Credit Agreement dated as of December 30,
2005 (as amended, amended and restated, supplemented or otherwise modified from time to time,
including by Consent and Amendment No. 1 dated May 19,
2006, the “Credit Agreement”; the terms
defined therein, unless otherwise defined herein, being used herein as therein defined) among
TRIPLE CROWN MEDIA, LLC, as borrower (the “Borrower”), TRIPLE CROWN MEDIA, INC., as parent and a
guarantor (the “Parent”), the subsidiary guarantors named therein, the several banks and other
financial institutions or entities from time to time party thereto, as lenders (the “Lenders”),
WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent (in such capacity, the “Administrative
Agent”), WACHOVIA CAPITAL MARKETS, LLC and BANC OF AMERICA SECURITIES LLC, as Joint Bookrunners and
Joint Lead Arrangers, and BANK OF AMERICA, N.A., as Syndication Agent.
PRELIMINARY STATEMENTS:
The Borrower, the Parent and the Required Lenders have agreed to amend and otherwise modify
the Credit Agreement, all on and subject to the terms of this Consent and Amendment No. 2.
NOW, THEREFORE, it is hereby agreed, subject to the terms and conditions stated below,
effective as of the Amendment No. 2 Effective Date (as defined below) as follows:
SECTION 1. Consents. (a) The Lenders hereby agree, and are deemed to consent, to the
amendments to the First Lien Facilities, as set forth on Annex I hereto as set forth therein.
(b) The Lenders hereby consent to the acquisition of the Acquired Business (as defined in
Section 2 below) pursuant to the Acquired Business Purchase Agreement (as defined in Section 2
below) by the Parent, provided that (i) all of the requirements set forth in Section
5.02(f)(vii) applicable to an acquisition by the Borrower shall be complied with by the Parent with
respect to the acquisition of the Acquired Business, except that (A) total cash and noncash
consideration not to exceed $6,500,000 may be paid therefor on the Acquired Business Acquisition
Date (as defined in Section 2 below) (subject to working capital adjustments in accordance with the
Acquired Business Purchase Agreement) and future cash payments not exceeding in the aggregate 10%
of the net operating income of the Acquired Business may be paid as required pursuant to the
Acquired Business Purchase Agreement, (B) the line of business of the Acquired Business may be a
collegiate sports marketing business and (C) the Parent may provide the certificate required
pursuant to Section 5.02(f)(vii)(F) up to three Business Days prior to the Acquired Business
Acquisition Date, (ii) the Parent and the Borrower shall not enter into or permit any amendment
which would increase the consideration payable by the Parent or any other material amendment or
other material modification or supplement to the Acquired Business Acquisition Agreement without
the prior written consent of the Required Lenders, (iii) the acquisition of the Acquired Business
shall have been consummated in accordance with the material terms of the Acquired Business Purchase
Agreement and the Parent shall not have waived or modified any material condition to the closing of
the transactions contemplated by the Acquired Business Purchase Agreement, (iv) upon consummation
of the closing of the transactions contemplated by the Acquired Business Purchase Agreement, (A)
the Acquired Business shall have no Debt and (B) there shall be no Liens on any assets or
properties of the Acquired Business, other than Liens expressly permitted by the Loan Documents but
which are not Liens of the kind described in clause (k) of the definition of Permitted Liens unless
separately expressly permitted by another provision of the Loan Documents, and (v) after the
Acquired
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Business Acquisition Date and upon a request made by the Administrative Agent, the Parent and
the Borrower shall cause all of the Equity Interests of the Acquired Business to be transferred
from the Parent to the Borrower pursuant to documentation reasonably acceptable to the
Administrative Agent provided, that such transfer shall not violate the terms or require any
consent under any material agreement to which the Acquired Business is a party as of the date
hereof.
SECTION 2. Amendments to Credit Agreement. (a) Section 1.01 of the Credit Agreement
is hereby amended, for the period from and after the Amendment No. 2 Effective Date, by deleting
the definition of “Applicable Margin” in its entirety and substituting, in lieu thereof, the
following:
“‘Applicable Margin’ means (a) 8.50% per annum for Base Rate Advances and 9.50% per annum
for Eurodollar Rate Advances at all times when the ratings assigned by S&P and Xxxxx’x to
the obligations of the Borrower under the Loan Documents are at least CCC+ and B3,
respectively, and (b) 9.00% per annum for Base Rate Advances and 10.00% per annum for
Eurodollar Rate Advances at all times when the ratings assigned by S&P or Xxxxx’x to the
obligations of the Borrower under the Loan Documents are less than or equal to CCC or Caa,
respectively or if such obligations are unrated by either S&P or Xxxxx’x.”
(b) Section 1.01 of the Credit Agreement is hereby further amended by adding in alphabetical
order the following defined terms and the corresponding definitions thereof:
“‘Acquired
Business’ means Pinnacle Sports Productions, LLC, a limited liability
company organized under the laws of the State of Nebraska.”
“‘Acquired
Business Acquisition Date’ means the “Closing Date” as defined in the
Acquired Business Purchase Agreement.”
“‘Acquired
Business Purchase Agreement’ means, collectively, (a) that certain Purchase
Agreement dated August 29, 2006, between Parent and Xxxx X. Xxxxx and (b) that certain
Purchase Agreement dated August 29, 2006, between Parent and Xxxx X. Xxxxxx.”
(c) Section 1.01 of the Credit Agreement is hereby further amended by deleting the text of
clause (y) of the definition of “Capital Expenditures” appearing therein in its entirety and
substituting, in lieu thereof, the following: “the capitalized portion of the purchase price
payable in connection with the acquisition of the Acquired Business or any Permitted Acquisition
shall not be included in Capital Expenditures.”
(d) The definition of “EBITDA” contained in Section 1.01 of the Credit Agreement is hereby
amended by (i) deleting the word “and” immediately before clause (xi) thereof and substituting, in
lieu thereof, “ , ” and (ii) adding, immediately following the words “on or after the Closing Date”
in clause (xi) thereof, the following: “, (xii) certain non-recurring expenses in amounts and for
the periods as set forth on Schedule 1.1(a), (xiii) certain pro forma adjustments for the Acquired
Business in amounts and for the periods as set forth on Schedule 1.1(b), and (xiv) non-recurring
severance costs in an amount not to exceed $500,000”.
(e) Section 1.01 of the Credit Agreement is hereby amended by deleting the text of clause (e)
of the definition of “Excluded Equity Issuances” appearing therein in its entirety and
substituting, in lieu thereof, the following: “any Equity Interest of the Parent issued in
accordance with the terms of the Acquired Business Purchase Agreement or in connection with a
Permitted Acquisition that is otherwise permitted hereunder.”
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(f) Section 5.02(c) of the Credit Agreement is hereby amended by deleting the text thereof in
its entirety and substituting, in lieu thereof, the following:
“Make, or permit any of its Subsidiaries to make, any material change in the nature of its
business as carried on as of the Acquired Business Acquisition Date, provided that, in any
event, the Parent shall not engage in any business other than to own the Equity Interests of
the Borrower and, subject to the requirements of Consent and Amendment No. 2 to this
Agreement, of the Acquired Business.”
(g) Section 5.02(q) of the Credit Agreement is hereby amended by deleting the text thereof in
its entirety and substituting, in lieu thereof, the following:
“Enter, or permit any of its Subsidiaries to enter, into any arrangement for the payment of,
or pay, brokers, management, advisory or similar fees, other than any such fees (i) to be
paid in an aggregate amount not to exceed $250,000 per annum pursuant to the terms of the
consulting agreements to be entered into in accordance with the terms of the Acquired
Business Purchase Agreement or (ii) incurred in the ordinary course of business or in
connection with a Permitted Acquisition, but in the case of this clause (ii), not in any
case to exceed $500,000 for the term of this Agreement.”
(h) Section 5.04 of the Credit Agreement is hereby amended, for the period from and after the
Amendment No. 2 Effective Date, by deleting the chart appearing therein in its entirety and
substituting, in lieu thereof, the following chart, so that from and after the Amendment No. 2
Effective Date, such chart shall read in its entirety as follows:
| Fiscal Quarter | March 31 | June 30 | September 30 | December 31 | ||||||||||||
2006 |
7.00 : 1.00 | 7.00 : 1.00 | 6.75 : 1.00 | 6.75 : 1.00 | ||||||||||||
2007 |
6.75 : 1.00 | 6.75 : 1.00 | 6.25 : 1.00 | 6.25 : 1.00 | ||||||||||||
2008 |
6.25 : 1.00 | 5.75 : 1.00 | 5.25 : 1.00 | 5.25 : 1.00 | ||||||||||||
2009 |
5.25 : 1.00 | 4.50 : 1.00 | 4.50 : 1.00 | 4.50 : 1.00 | ||||||||||||
2010 |
4.50 : 1.00 | 4.50 : 1.00 | 4.50 : 1.00 | 4.50 : 1.00 | ||||||||||||
(i) Concurrently with the satisfaction of the requirements of Section 5.01(i) of the Credit
Agreement, Schedule II of the Credit Agreement is hereby amended to include the Acquired Business.
(j) Schedule 4.01(b) of the Credit Agreement is hereby amended, for the period from and after
the Acquired Business Acquisition Date, by appending to such schedule an entry as follows:
Pinnacle Sports Productions, LLC
|
Nebraska | None | 00-0000000 |
(k) Schedule 4.01(c) of the Credit Agreement is hereby amended, for the period from and after
the Acquired Business Acquisition Date, by appending to such schedule an entry as follows:
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Pinnacle Sports Productions, LLC |
Nebraska | Limited liability company interests |
All | 100% owned by Triple Crown Media, Inc. | None. |
(l) Schedule 4.01(z)(1) of the Credit Agreement is hereby amended, for the period from and
after the Acquired Business Acquisition Date, by appending to such schedule two entries as follows:
Village Square Investments, LLC |
Pinnacle Sports Productions, LLC |
000 Xxxxxxx Xxxxxx Xxxxxx, XX 00000 |
Sarpy | July 31, 2011 | $ | 000,000 | ||||||
Xxxxxxx Xxxxxx Investments, LLC |
Pinnacle Sports Productions, LLC |
Storage Unit “J” 00000 X Xxxx Xxxxxx Xxxxxx Xxxxxxx, XX 00000 | Xxxxxxx | — | $ | 8,250 |
(m) Schedule 4.01(bb) of the Credit Agreement is hereby amended, for the period from and after
the Acquired Business Acquisition Date, by appending to the table in Section I of such schedule an
entry as follows:
29.
|
Pinnacle Sports Productions, LLC |
Pinnacle Sports Productions |
02/02/99 | Registered | US | 75258122 |
(n) Schedule 4.01(bb) of the Credit Agreement is hereby further amended by appending to the
table in Section II of such schedule three entries as follows:
Pinnacle Sports Productions, LLC
|
XxxxxxxxXxxxxxXxxxxxx.xxx | |
Pinnacle Sports Productions, LLC
|
XxxxxxxxXxxxxxXxxxxxx.xxx | |
Pinnacle Sports Productions, LLC
|
XxxxxxxxXxxxxxXxxxxxx.xxx |
(o) Schedule 4.01(cc) of the Credit Agreement is hereby amended, for the period from and after
the Acquired Business Acquisition Date, by appending to the list a heading for the Acquired
Business with an entry below such heading as follows:
“Exclusive License Agreement of Certain Media Rights, Including Live Radio Broadcast Rights
dated as of August 9, 2003 by and between the Board of Regents of the University of Nebraska
and Pinnacle Sports Productions, L.L.C.”
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(p) The Credit Agreement is hereby amended by adding as Schedules 1.1(a) and 1.1(b) thereto
Schedules I and II, respectively, attached to this Consent and Amendment No. 2.
SECTION 3. Reference to and Effect on the Loan Documents. (a) On and after the
effectiveness of this Consent and Amendment No. 2, each reference in the Credit Agreement to “this
Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and
each reference in the Credit Agreement, the Notes and each of 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 Credit Agreement, as amended by this Consent and
Amendment No. 2. This Consent and Amendment No. 2 constitutes a “Loan Document” as defined in the
Credit Agreement.
(b) The Credit Agreement, the Notes and each of the other Loan Documents, as specifically
amended by this Consent and Amendment No. 2, are and shall continue to be in full force and effect
and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Consent and Amendment No. 2 shall not,
except as expressly provided herein, operate as a waiver of any right, power or remedy of any
“Lender” or the “Administrative Agent” under any of the Loan Documents, nor constitute a waiver of
any provision of any of the Loan Documents.
SECTION 4. Conditions to Effectiveness. This Consent and Amendment No. 2 shall become
effective as of the date first above written when, and only when, the following conditions have
been satisfied (the “Amendment No. 2 Effective Date”):
(a) Execution of Counterparts. The Administrative Agent shall have received (i)
counterparts of this Consent and Amendment No. 2 executed by the Borrower, the Parent and the
Required Lenders or, as to any of the Lenders, evidence satisfactory to the Administrative Agent
that such Lender has executed this Consent and Amendment No. 2, and (ii) the guarantor and grantor
consent attached hereto as Annex II (the “Consent”) executed by each Guarantor.
(b) Payment of Fees and Expenses. The Borrower shall have paid (i) all out-of-pocket
expenses incurred by the Agents, including the reasonable fees, charges and disbursements of
Shearman & Sterling LLP as counsel for the Agents, in connection with this Consent and Amendment
No. 2 and for all services related to the Credit Agreement since the last invoice date with respect
thereto; (ii) for the benefit of each Lender executing this Consent and Amendment No. 2 on or
before 5:00 P.M. Eastern time on September 14, 2006, a fee equal to 0.25% of the total Commitments
of each such Lender; and (iii) any other fees payable to the Agents as agreed between the Agents
and the Borrower.
SECTION 5. Representations and Warranties. The Borrower and Parent represent and
warrant as follows:
(a) The representations and warranties contained in each Loan Document are true and correct in
all material respects on and as of the date of such certificate as though made on and as of such
date other than any such representations or warranties that, by their express terms, refer to a
specific date other than the date of such certificate; and
(b) As of the date hereof, no Default has occurred and is continuing.
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SECTION 6. Governing Law. This Consent and Amendment No. 2 shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 7. Execution in Counterparts. This Consent and Amendment No. 2 may be
executed in any number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart of this Consent
and Amendment No. 2 by telecopier or in PDF format via electronic mail shall be effective as
delivery of an original executed counterpart of this Consent and Consent and Amendment No. 2.
SECTION 8. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS CONSENT AND AMENDMENT NO. 2 OR ANY OF THE LOAN
DOCUMENTS OR THE ACTIONS OF ANY AGENT OR ANY LENDER PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.
[signature pages follow]
IN WITNESS WHEREOF, the parties hereto have caused this Consent and Amendment No. 2 to be executed
by their officers thereunto duly authorized as of the date specified thereon.
| TRIPLE CROWN MEDIA, LLC, as Borrower |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| TRIPLE CROWN MEDIA, INC., as Parent and a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent and Lender |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| Required Lenders Agreed as of the date first above written: , as a Lender (Please print or type legal name) |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
Annex I
Form of Amendments to First Lien Term Loan Facility
Annex II
GUARANTOR CONSENT
CONSENT, dated as of September 14, 2006 (this “Consent”), to the foregoing Consent and
Amendment No. 2 dated as of the date hereof (the “Amendment”) to the Second Lien Senior Secured
Credit Agreement dated as of December 30, 2005 (as amended, amended and restated, supplemented or
otherwise modified from time to time, including by Consent and Amendment No. 1 dated May 19, 2006,
the “Credit Agreement”; the terms defined therein, unless otherwise defined herein, being used
herein as therein defined) among TRIPLE CROWN MEDIA, LLC, as borrower (the “Borrower”), TRIPLE
CROWN MEDIA, INC. as parent and a guarantor, the several banks and other financial institutions or
entities from time to time party thereto, as lenders (the “Lenders”), WACHOVIA BANK, NATIONAL
ASSOCIATION, as Administrative Agent, WACHOVIA CAPITAL MARKETS, LLC and BANC OF AMERICA SECURITIES
LLC, as Joint Bookrunners and Joint Lead Arrangers, and BANK OF AMERICA, N.A., as Syndication
Agent.
Each of the undersigned, as a Guarantor under the Credit Agreement, and as a Grantor under the
Security Agreement, hereby consents to the foregoing Amendment and hereby confirms and agrees that
notwithstanding the effectiveness of such Amendment, the Credit Agreement, the Guaranties, the
Security Agreement and each Loan Document are, and shall continue to be, in full force and effect
and each is hereby ratified and confirmed in all respects, except that, on and after the
effectiveness of such Amendment, each reference in each Loan Document to the “Credit Agreement”,
“thereunder”, “thereof” or words of like import shall mean and be a reference to the Credit
Agreement, as amended by such Amendment.
[signature pages follow]
| TRIPLE CROWN MEDIA, INC., as the Parent and a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| BR ACQUISITION CORP., as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| BR HOLDING, INC., as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| DATASOUTH COMPUTER CORPORATION, as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| GRAYLINK, LLC, as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| XXXX PUBLISHING, LLC, as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| HOST COMMUNICATIONS, INC., as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| PORTA-PHONE PAGING LICENSEE CORP., as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| HOOP-IT-UP INTERNATIONAL, INC., as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
| CAPITAL SPORTS PROPERTIES, INC., as a Guarantor |
||||
| By | ||||
| Name: | ||||
| Title: | ||||
Schedule I to Consent and Amendment No. 2
Schedule 1.1(a) to Credit Agreement
Certain Non-Recurring Expenses
| For the Period Ending | Amount (in $1,000s) | |||
September 30, 2006
|
$ | 1,864 | ||
December 31, 2006
|
$ | 1,398 | ||
March 31, 2007
|
$ | 932 | ||
June 30, 2007
|
$ | 466 | ||
Schedule II to Consent and Amendment No. 2
Schedule 1.1(b) to Credit Agreement
ProForma Adjustments for the Acquired Business
| For the Period Ending | Amount (in $1,000s) | |||
June 30, 2006
|
$ | 458 | ||
September 30, 2006
|
$ | 434 | ||
December 31, 2006
|
$ | 82 | ||
March 31, 2007
|
$ | 0 | ||
