AMENDMENT NO. 1
to
CREDIT AGREEMENT
AMENDMENT No. 1 (this "Amendment"), dated as of December 12, 1997, to
the Credit Agreement, dated as of July 31, 1997, by and among Production
Resource Group, L.L.C. (the "Borrower") and the Lenders party thereto and The
Bank of New York, as agent for the Lenders (the "Agent"), with BNY Capital
Markets, Inc., as Arranger (the "Credit Agreement").
RECITALS
A. Capitalized terms used herein which are not defined herein and
which are defined in the Credit Agreement shall have the same meanings as
therein defined.
B. The Borrower has requested that the Agent and the Lenders amend the
Credit Agreement to permit the Borrower to issue up to $150,000,000 of
subordinated debt and to amend and waive certain other provisions of the Credit
Agreement and other Loan Documents as set forth below, and the Agent and the
Lenders have agreed to do so subject to the terms and conditions set forth
herein.
In consideration of the covenants, conditions and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, and pursuant to Section
11.1 of the Credit Agreement, the parties hereto hereby agree as follows:
Article I. Amendments.
The Credit Agreement is, effective on the Amendment Effective Date (as
defined below), and subject to the satisfaction of the conditions precedent set
forth in Article III below, hereby amended as follows:
1. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "Applicable Fee Percentage" to read as follows:
"Applicable Fee Percentage": with respect to the Commitment
Fee, at all times during which the applicable Pricing Level set forth
below is in effect, the appropriate applicable percentages
corresponding to the Total Leverage Ratio in effect as set forth below
next to such Pricing Level and under the applicable column:
Applicable Fee
Pricing Total LeverageRatio Percentage
------- ------------------- ----------
I Greater than or equal to 3.00:1.00 0.375%
II Greater than or equal to 2.50:1.00 0.375%
but less than 3.00:1.00
III Greater than or equal to 2.00:1.00 0.375%
but less than 2.50:1.00
IV Greater than or equal to 1.50:1.00 0.375%
but less than 2.00:1.00
V Less than 1.50:1.00 0.250%
Changes in the Applicable Fee Percentage resulting from a change in a
Pricing Level shall become effective upon the due date of delivery by
the Borrower to the Agent of a Compliance Certificate pursuant to
Sections 7.1(c), 8.3 or pursuant to any other provision or requirement
herein evidencing a change in the Total Leverage Ratio which would
affect the Pricing Level. If the Borrower shall fail to deliver a
Compliance Certificate by such due date as required by Sections
7.1(c), 8.3 or pursuant to any other provision or requirement herein,
Pricing Level I shall apply from and including the day following such
due date to the date of the delivery by the Borrower to the Agent of a
Compliance Certificate demonstrating that a different Pricing Level is
applicable, which different Pricing Level shall apply from the date of
delivery of such Compliance Certificate. Notwithstanding the
foregoing, no reduction in the Applicable Fee Percentage shall become
effective if an Event of Default shall have occurred and be
continuing.
2. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "Applicable Margin" to read as follows:
"Applicable Margin": with respect to the unpaid principal
balance of ABR Advances and Eurodollar Advances, in each case at all
times during which the applicable Pricing Level set forth below is in
effect, the appropriate applicable percentages corresponding to the
Total Leverage Ratio in effect as set forth below next to such Pricing
Level and under the applicable column:
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Applicable Applicable Margin
Margin for for
Pricing Total ABR Eurodollar
Level Leverage Ratio Advances Advances
----- -------------- -------- --------
I Greater than or equal to 1.375% 2.500%
4.00:1.00
II Greater than or equal to 1.125% 2.250%
3.00:1.00 but less than
4.00:1.00
III Greater than or equal to 0.750% 1.875%
2.50:1.00 but less than
3.00:1.00
IV Greater than or equal to 0.500% 1.625%
2.00:1.00 but less than
2.50:1.00
V Greater than or equal to 0.250% 1.375%
1.50:1.00 but less than
2.00:1.00
VI Less than 1.50:1.00 0.000% 1.125%
Changes in the Applicable Margin resulting from a change in the
Pricing Level shall become effective upon the due date of delivery by
the Borrower to the Agent of a Compliance Certificate pursuant to
Sections 7.1(c), 8.3 or pursuant to any other provision or requirement
herein evidencing a change in the Total Leverage Ratio which would
affect the Pricing Level. If the Borrower shall fail to deliver a
Compliance Certificate by such due date as required by Sections
7.1(c), 8.3 or pursuant to any other provision or requirement herein
Pricing Level I shall apply from the day following such due date to
the date of the delivery by the Borrower to the Agent of a Compliance
Certificate demonstrating that a different Pricing Level is
applicable, which different Pricing Level shall apply from the date of
delivery of such Compliance Certificate. Notwithstanding the
foregoing, no reduction in the Applicable Margin shall become
effective if an Event of Default shall have occurred and be
continuing.
3. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "Change of Control" to read as follows:
"Change of Control": any one or more of the following events:
(a) the Xxxxxx Group shall fail to own, beneficially and of record,
directly or indirectly, 80% of the issued and outstanding voting
Capital Stock of the Borrower and of each of the Guarantors owning,
beneficially and of record any Capital Stock of the
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Borrower or (b) the Xxxxxx Group shall fail to own, beneficially and
of record, directly or indirectly, 25% of the issued and outstanding
Capital Stock of the Borrower and each of the Guarantors owning,
beneficially and of record any Capital Stock of the Borrower or (c) a
"Change of Control" as said term is defined in the documentation
governing Subordinated Indebtedness.
4. Section 1.1. of the Credit Agreement is hereby amended to amend and
restate the definition of "Contingent Obligation" to read as follows:
"Contingent Obligation": as to any Person ( a "secondary
obligor"), any obligation of such secondary obligor (i) guaranteeing
or in effect guaranteeing any return on any investment made by another
Person, (ii) with respect to obligations arising under Interest Rate
Protection Agreements, or (iii) guaranteeing or in effect guaranteeing
any Indebtedness, lease, dividend or other obligation (a "primary
obligation") of any other Person (a "primary obligor") in any manner,
whether directly or indirectly, including any obligation of such
secondary obligor, whether contingent, (A) to purchase any primary
obligation or any Property constituting direct or indirect security
therefor, (B) to advance or supply funds (x) for the purchase or
payment of any primary obligation or (y) to maintain working capital
or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of a primary obligor, (C) to purchase Property,
securities or services primarily for the purpose of assuring the
beneficiary of any primary obligation of the ability of a primary
obligor to make payment of a primary obligation, (D) otherwise to
assure or hold harmless the beneficiary of a primary obligation
against loss in respect thereof, and (E) in respect of the liabilities
of any partnership in which a secondary obligor is a general partner,
except to the extent that such liabilities of such partnership are
nonrecourse to such secondary obligor and its separate Property,
provided, however, that the term "Contingent Obligation" shall not
include Excluded Contingent Obligations or the indorsement of
instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation of a Person shall be
deemed to be an amount equal to the stated or determinable amount of a
primary obligation in respect of which such Contingent Obligation is
made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by such Person
in good faith.
5. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "EBITDA" to read as follows:
"EBITDA": for any period, Consolidated net income (or loss)
of the Borrower and its Subsidiaries for such period, determined in
accordance with GAAP plus the sum of, without duplication, (i)
Interest Expense for such period, (ii) provision for income taxes for
such period and (iii) depreciation, amortization
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and other non-cash charges, each to the extent deducted in
determining such net income for such period, less (iv) income from
Investments, (v) extraordinary gains and losses from sales, exchanges
and other dispositions of Property not in the ordinary course of
business and (vi) other non-recurring items (except non-recurring
losses in connection with net deferred production costs), including
without limitation, any non-recurring expenses or charges made in
connection with the Bash Acquisition (including bonus payments made
in connection therewith in an amount not to exceed $2,000,000) and
calculated after giving effect to Acquisitions, mergers and other
Dispositions of the Borrower and its Subsidiaries during such period
as if such transactions had occurred on the first day of such period.
6. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "Excess Cash Flow" to read as follows:
"Excess Cash Flow": with respect to any fiscal year, the sum
of (a) EBITDA (before giving effect to Acquisitions, mergers and
Dispositions during such period) for such fiscal year, (b) income from
Investments permitted under Section 8.5(a) actually received in cash
during such period, and (c) Offering Proceeds for such fiscal year
minus (d) the sum of, without duplication, (i) without duplication,
taxes and Restricted Payments for Members' Tax Liability paid or
required to be paid during such period, (ii) Capital Expenditures made
during such period minus, to the extent not included in calculating
EBITDA, net cash proceeds from the sale of used rental equipment sold
during such period for cash, (iii) Capital Lease Obligations paid or
required to be paid during such period, (iv) Interest Expense to the
extent paid or required to be paid in cash, (v) mandatory payments of
principal of the Revolving Credit Loans resulting from reductions in
the Aggregate Commitment Amount pursuant to Section 2.4(b)(ii), and
(vi) mandatory payments of principal of other Indebtedness.
7. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "Fixed Charges" to read as follows:
"Fixed Charges": for any period, with respect to the Borrower
and its Subsidiaries on a Consolidated basis in accordance with GAAP,
the sum of (i) mandatory payments of principal (including mandatory
payments of the Revolving Credit Loans resulting from reductions in
the Aggregate Commitment Amount pursuant to Section 2.4(b)(ii)) on
Total Debt made or required to be made during such period, but
excluding payments pursuant to Section 2.5(c), (ii) Capital
Expenditures made during such period minus, to the extent not included
in calculating EBITDA, net cash proceeds from the sale of used rental
equipment sold during such period for cash, (iii) Capital Lease
Obligations paid or required to be paid during such period, (iv)
without duplication, taxes and Restricted Payments
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(excluding any Restricted Payments made pursuant to Sections 8.6(v)
or 8.6(vi)), and (v) Interest Expense to the extent paid or required
to be paid in cash, minus (vi) income from Investments permitted
under Section 8.5(a) actually received in cash during such period.
8. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "Maturity Date" to read as follows:
"Maturity Date": December 31, 2002, or such earlier date on
which the Revolving Credit Notes shall become due and payable, whether
by acceleration or otherwise.
9. Section 1.1 of the Credit Agreement is hereby amended to amend and
restate the definition of "PRG Operating Agreement" to read as follows:
"PRG Operating Agreement": The Amended and Restated Limited
Liability Agreement of the Borrower, dated as of January 1, 1996, as
the same may be amended, supplemented or otherwise modified from time
to time.
10. Section 1.1 of the Credit Agreement is hereby amended to add the
following new definitions in the appropriate alphabetical order:
"Amendment Effective Date": as defined in Amendment No. 1 to
the Agreement.
"Amendment No. 1": Amendment No. 1, dated as of December 12,
1997, to the Agreement.
"Cash Balances": the aggregate amount of cash or Cash
Equivalents maintained by the Borrower with any of the Lenders or
their Affiliates, or any other bank or financial institution listed on
a certificate provided in accordance with Section 7.1(g).
"Excluded Contingent Obligation": shall mean any guarantee or
other obligation of the Borrower of a type described in clauses (i) or
(iii) of the definition of "Contingent Obligation" with respect to,
and following the disposition of, the Real Property located at 0000
Xxxxx Xxxxxx Xxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxx, to Scenic Properties
L.L.C., provided that such obligation shall not extend to a date later
than September 30, 1998, nor be for an amount exceeding the lesser of
(A) 89% of the principal amount of any construction loan with respect
to such property incurred by Scenic Properties L.L.C. and (B)
$4,500,000, and insofar as any such obligation extends beyond such
date, or exceeds such amount, such
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obligation or the amount of such excess shall not be an
Excluded Contingent Obligation for purposes of this definition.
"Interest Rate Protection Lenders": collectively, the Lenders
and any affiliates of the Lenders which from time to time enter or
have entered into Interest Rate Protection Agreements with the
Borrower.
"Senior Debt": at any date of determination, all Indebtedness
(other than trade payables incurred in the ordinary course of business
and Subordinated Indebtedness) on such date of the Borrower and its
Subsidiaries on a Consolidated basis as determined in accordance with
GAAP.
"Senior Leverage Ratio": at any date of determination, the
ratio of (a) Senior Debt on such date, minus the aggregate amount of
Cash Balances in excess of $2,500,000, to (b) EBITDA for the four
fiscal quarter period ending on such date or, if such date is not the
last day of a fiscal quarter, for the immediately preceding four
fiscal quarters period, as determined on such date of determination.
"Subordinated Indebtedness": Indebtedness of the Borrower
evidenced by notes issued by the Borrower on or before February 28,
1998, in an aggregate principal amount not to exceed $150,000,000 and
subordinated to the obligations of the Borrower under the Loan
Documents on terms of subordination satisfactory to the Agent.
"Total Leverage Ratio": at any date of determination, the
ratio of (a) Total Debt on such date minus the aggregate amount of
Cash Balances in excess of $2,500,000, to (b) EBITDA for the four
fiscal quarter period ending on such date or, if such date is not the
last day of a fiscal quarter, for the immediately preceding four
fiscal quarter period as determined on such date of determination.
11. Section 1.1 of the Credit Agreement is hereby amended by deleting
the definition of "Leverage Ratio".
12. Section 2.4(b)(ii) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(ii) On each of the dates set forth below, the
Aggregate Commitment Amount shall be automatically and
permanently reduced as set forth below:
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Commitment Commitment
Date Reduction Amount
---- --------- ------
March 31, 2000 $7,500,000 $92,500,000
June 30, 2000 $7,500,000 $85,000,000
September 30, 2000 $7,500,000 $77,500,000
December 31, 2000 $7,500,000 $70,000,000
March 31, 2001 $7,500,000 $62,500,000
June 30, 2001 $7,500,000 $55,000,000
September 30, 2001 $7,500,000 $47,500,000
December 31, 2001 $7,500,000 $40,000,000
March 31, 2002 $10,000,000 $30,000,000
June 30, 2002 $10,000,000 $20,000,000
September 30, 2002 $10,000,000 $10,000,000
December 31, 2002 $10,000,000 $0
13. Section 2.4(b) of the Credit Agreement is hereby amended by
inserting a new subsection (iii) after subsection (ii) to read as follows:
(iii) On the date of receipt by the Borrower of the
proceeds of Subordinated Indebtedness, the Aggregate
Commitment Amount shall be automatically and permanently
reduced by the amount by which the aggregate face amount of
the Subordinated Indebtedness exceeds $100,000,000 (up to a
maximum reduction amount of $25,000,000).
14. Section 2.4(b)(ii) of the Credit Agreement is hereby amended by
adding a new sentence at the end of Section 2.4(b)(ii) to read as follows:
Reductions of the Aggregate Commitment Amount made pursuant
to Section 2.4(b)(iii) shall be applied in inverse order
among the remaining Aggregate Commitment Amount reductions
set forth in Section 2.4(b)(ii).
15. Section 2.5(c) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(c) Mandatory Prepayments of Revolving Credit Loans
in Respect of Excess Cash Flow. Upon the delivery of annual
financial statements, but no later than the March 31st of the
following year with respect to any fiscal year, commencing
with the fiscal year ended December 31, 1998, when the Total
Leverage Ratio is greater than or equal to 3.50 to 1.00, the
Borrower shall prepay the Revolving Credit Loans by an amount
equal to the lesser of (i) 50% of Excess Cash Flow for the
prior fiscal year or (ii) the amount which, if subtracted
from Total Debt, would have been
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sufficient to reduce the Total Leverage Ratio to less than
3.50 to 1.00 for the prior fiscal year.
16. Section 2.5(f) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(f) Mandatory Prepayments of Revolving Credit Loans
Relating to Receipt of Proceeds of Additional Indebtedness.
On the date of receipt of the net proceeds of any
Indebtedness (evidenced by notes, bonds or similar
instruments), pursuant to Section 8.1(vi) such proceeds of
Indebtedness shall be applied to the prepayment of the
Revolving Credit Loans.
17. Section 7.1 of the Credit Agreement is hereby amended by adding a
new subsection (g) as follows:
(g) A certificate with respect to Cash Balances to
be delivered to the Agent together with each Compliance
Certificate, showing each financial institution in which Cash
Balances are maintained, the location thereof, and the amount
of such Cash Balances.
18. Section 7.11 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(a) Pro Forma Interest Coverage Ratio. Maintain at
all times a Pro Forma Interest Coverage Ratio of not less
than 2.00 to 1.00.
(b) Fixed Charge Coverage Ratio. Maintain at all
times a Fixed Charge Coverage Ratio of not less than 1.10 to
1.00, commencing with the fiscal quarter ending March 31,
1998.
(c) Total Leverage Ratio. Maintain at all times
during the periods set forth below, a Total Leverage Ratio of
not more than the ratios set forth below:
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Total
Period Leverage Ratio
------ --------------
Effective Date through
June 30, 1998 4.75:1:00
July 1, 1998 through
December 31, 1998 4.50:1:00
January 1, 1999 through
December 31, 1999 4.00:1.00
January 1, 2000 through
June 30, 2000 3.75:1.00
July 1, 2000
and thereafter 3.50:1.00
(d) Senior Leverage Ratio. Maintain at all times
during the periods set forth below, a Senior Leverage Ratio
of not more than the ratios set forth below:
Senior
Period Leverage Ratio
------ --------------
Effective Date through
June 30, 1998 2.25:1:00
July 1, 1998
and thereafter 2.00:1.00
19. Section 7 of the Credit Agreement is hereby amended by inserting a
new Section 7.13 after Section 7.12 to read as follows:
7.13 Interest Rate Protection Agreements
At all times, commencing 60 days after the Amendment
Effective Date, not less than 50% of Total Debt of the
Borrower shall be either (i) Indebtedness for which the
interest rate with respect thereto is fixed from the date of
issuance thereof through maturity or (ii) protected by
Interest Rate Protection Agreements, such Interest Rate
Protection Agreements shall be in form and substance
satisfactory to the Agent and shall have the effect of
establishing a maximum interest rate acceptable to the Agent
and shall be of a duration acceptable to the Agent.
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20. Section 8.1 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
Create, incur, assume or suffer to exist any
liability for Indebtedness, or permit any of its Subsidiaries
so to do, except (i) Indebtedness under the Loan Documents,
(ii) Indebtedness of the Borrower or any of its Subsidiaries
existing on the Effective Date as set forth on Schedule 8.1
(other than the Existing Bank Debt which is to be repaid on
the Effective Date), excluding increases and refinancings
thereof, (iii) Intercompany Indebtedness, (iv) purchase money
Indebtedness and Capital Lease Obligations (other than any
such purchase money Indebtedness or Capital Lease Obligations
described in clause (ii) above) incurred in connection with
the purchase, after the Effective Date, of any Property, in
an aggregate principal amount not to exceed $1,000,000 at any
one time outstanding, (v) Indebtedness under Interest Rate
Protection Agreements, (vi) Indebtedness incurred to prepay
outstanding Revolving Credit Loans pursuant to Section
2.5(f), (vii) Indebtedness of the Borrower arising out of
obligations under letters of credit issued by any of the
Lenders, up to an aggregate face amount available to be drawn
thereunder not to exceed $1,000,000 at any one time
outstanding, (viii) Subordinated Indebtedness, provided that
to the extent that proceeds thereof exceed $100,000,000 the
Aggregate Commitment Amount shall be reduced pursuant to
Section 2.4(b)(iii) by an amount equal to the lesser of (A)
$25,000,000 or (B) the amount by which such proceeds exceed
$100,000,000, and (ix) guarantees by the Borrower's
Subsidiaries of Subordinated Indebtedness which are
subordinated to such Subsidiary's obligations to the Lenders
under the Guaranty on terms satisfactory to the Agent.
21. Section 8.3(e) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(e) Acquisitions, provided, that the Acquisition
Cost in respect thereof shall not exceed $30,000,000 in the
aggregate for the period from the Amendment Effective Date to
the termination of this Agreement without the prior written
consent of the Required Lenders, provided, however, that
Acquisitions in respect of which the Acquisition Cost exceeds
such $30,000,000 in the aggregate shall be permitted without
the prior written consent of the Required Lenders at any time
when pro-forma Total Leverage Ratio before and after giving
effect to such Acquisition is less than 3.50:1.00, and,
provided further, that with respect to any Acquisition
whenever consummated (1) such Acquisition shall be of a
Person or operating entity or involve the purchase of assets
of a Person in the same or a similar line of business as the
Borrower is engaged in on the Effective
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Date, (2) no Default or Event of Default shall exist
immediately before or after giving effect to such
Acquisition, the Borrower will be in compliance with all
financial covenants contained herein on a pro-forma basis
after giving effect to such Acquisition and any Indebtedness
incurred or assumed in connection therewith is permitted by
Section 8.1, and, immediately after giving effect to each
such Acquisition, all of the representations and warranties
contained in Section 4 shall be true and correct as if then
made and the Agent shall have received a certificate of a
Financial Officer of the Borrower to such effect together
with a Compliance Certificate, in form and substance
satisfactory to the Agent, (3) the Agent and the Lenders
shall have been given not less than 30 calendar days' prior
written notice thereof, (4) the Agent shall have received a
certificate signed by a Financial Officer of the Borrower,
identifying the Person or Property to be acquired, the name
of the Person making such Acquisition and setting forth the
total consideration to be paid in respect of such
Acquisition, (5) the conditions of Section 8.12 shall have
been satisfied, (6) in the case of an Acquisition of
Property, Capital Stock or other ownership interest of a
Person that will be a Subsidiary of the Borrower, such new
Subsidiary shall deliver to the Agent a duly executed
Guaranty and Security Agreement or supplements thereto and
such other documents as the Agent shall reasonably require in
order that the Agent shall have a perfected first priority
security interest in the Property, Capital Stock or other
ownership interest so acquired and (7) the Agent shall have
received such other information or documents as the Agent
shall have reasonably requested, which may include, without
limitation, a copy of any letter of intent with respect to
any acquisition and a copy of the final acquisition agreement
between the purchaser and seller.
22. Section 8.5 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:
At any time, directly or indirectly, purchase or
otherwise hold, own, acquire or invest in the Capital Stock
of, evidence of indebtedness or other obligation or security
issued by, any other Person, or make any loan or advance to,
or enter into any arrangement for the purpose of providing
funds or credit to, or make any Acquisition (other than a
Permitted Acquisition), or become a partner or joint venturer
in any partnership or joint venture, or make any other
investment (whether in cash or other Property) in any other
Person, or make any commitment or otherwise to agree to do
any of the foregoing (all of which are sometimes referred to
herein as "Investments"), or permit any of its Subsidiaries
so to do, or except:
(a) Investments in Cash Equivalents;
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(b) Investments existing on the Effective Date as
set forth on Schedule 8.5;
(c) normal business banking accounts;
(d) short-term certificates of deposit and time
deposits in, or issued by, federally insured institutions in
amounts not exceeding the limits of such insurance;
(e) Investments by the Borrower or any Subsidiary in
Intercompany Indebtedness permitted under Section 8.1;
(f) loans to employees of the Borrower or any
Subsidiary (i) to pay for relocation costs of such employees,
provided that such loans shall not exceed $500,000 at any one
time outstanding or (ii) to purchase Capital Stock of the
Borrower, provided that such Capital Stock shall be pledged
by such employees to the Agent, pursuant to and in accordance
with Section 8.12(a); and
(g) other Investments in an aggregate amount not to
exceed $7,500,000 from the Effective Date to the termination
of this Agreement, provided that in no case shall such
Investments be made to become a partner or joint venturer in
any partnership or joint venture in respect of which the
liability of the Borrower exceeds the amount of the
Investment permitted by this clause (g).
23. Section 8.6 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
Declare or pay any Restricted Payments payable in
cash or otherwise or apply any of its Property thereto or set
apart any sum therefor, or permit any of its Subsidiaries so
to do, except: (i) a wholly-owned Subsidiary may declare and
pay Restricted Payments to the Borrower, provided that no
Default or Event of Default has occurred and is continuing or
would occur after giving effect thereto, (ii) the Borrower
and any Subsidiaries may declare and pay Restricted Payments,
directly or indirectly, to its members to enable such members
to pay taxes when due, provided that such Restricted Payments
shall not exceed the Members' Tax Liability with respect to
each such entity and provided further that no Event of
Default under Section 9.1(a), (b), (h) or (i) has occurred
and is continuing or would occur after giving effect thereto,
(iii) commencing March 31, 1999, the Borrower may pay
dividends in an amount (excluding any other Restricted
Payments permitted pursuant to Section 8.6) not to exceed 50%
of Excess
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Cash Flow for the immediately preceding fiscal year
of the Borrower, provided that the Total Leverage Ratio for
the two fiscal quarters prior to and after giving effect
thereto is less than 3.50:1.00 and provided further that no
Default or Event of Default has occurred and is continuing or
would occur after giving effect thereto, (iv) Restricted
Payments in connection with a put or redemption of any
Preferred Membership Units, provided that (A) the Total
Leverage Ratio for the two fiscal quarters prior to and after
giving effect thereto is less than 4.00:1.00 or,
alternatively, three years shall have passed from the
issuance of such Preferred Membership Units, (B) such
Restricted Payments shall not in the aggregate exceed
$4,000,000 from the Effective Date until the termination of
this Agreement and (C) no Default or Event of Default has
occurred and is continuing or would occur after giving effect
thereto,(v) the Borrower may declare and pay Restricted
Payments to its members in an aggregate amount (excluding any
other Restricted Payments permitted pursuant to Section 8.6)
not to exceed $10,000,000, provided that such Restricted
Payments shall be paid no later than February 28, 1998, and
(vi) the Borrower may declare and pay Restricted Payments to
its members in an aggregate amount (excluding any other
Restricted Payments permitted pursuant to Section 8.6) not to
exceed the lesser of (a) the net cash proceeds received by
the Borrower as a contribution to its common equity in
connection with a Permitted Acquisition after deduction of
all Acquisition Costs, or (b) 25% of the Acquisition Cost
paid by PRG (but in no event to include any contribution to
equity funded by an employee loan permitted under Section
8.5(f)(ii)), provided that no Default or Event of Default has
occurred and is continuing or would occur after giving effect
thereto, and provided that Restricted Payments pursuant to
this Section 8.6(vi) shall not exceed $5,000,000 in the
aggregate during the term of the Agreement.
24. Section 8.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
Enter into or agree to any amendment, modification
or waiver of any term or condition of:
(a) its Organizational Documents, including
the PRG Operating Agreement, or the Restricted
Limited Liability Company Unit Incentive
Compensation Plan without the Agent's prior written
consent; or
(b) any subordination provision contained
in the indenture, the notes or any other documents
executed in connection with the issuance of the
Subordinated Indebtedness or any other
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term relating to the payment or prepayment of
principal of or interest on the Subordinated
Indebtedness.
25. Section 8.14 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
8.14. Prepayments of Indebtedness; Purchase, Redemption or
Defeasance of Subordinated Indebtedness. Prepay or obligate itself to
prepay, in whole or in part, any Indebtedness (other than Indebtedness
under the Loan Documents), or exercise any option to purchase or
redeem any Subordinated Indebtedness, or elect to have its obligations
discharged pursuant to any defeasance provision related to the
Subordinated Indebtedness, or permit any of its Subsidiaries so to do,
except that the Borrower may prepay up to $1,000,000 of Indebtedness
provided that no Default of Event of Default has occurred and is
continuing or would occur after giving effect thereto.
26. The Aggregate Commitment Amount is reduced from $130,000,000
to $100,000,000.
27. Exhibit A annexed hereto is substituted for Exhibit A annexed to
the Credit Agreement.
28. Exhibit B annexed hereto is substituted for Exhibit E annexed to
the Credit Agreement.
Article II. Consents and Waivers.
The Agent and the Lenders hereby agree, subject to the satisfaction of
the conditions precedent set forth in Article III below, as follows:
1. The Agent and the Lenders hereby consent to the formation on or
before the Amendment Effective Date (the "Finance Formation") by the Borrower
of PRG Finance Corporation ("PRG Finance"), a wholly-owned Subsidiary of the
Borrower, subject to the satisfaction of the following conditions precedent:
(a) upon the consummation of the Finance Formation, and at
all times thereafter, 100% of the Capital Stock of PRG Finance shall
be owned by the Borrower;
(b) no later than the Amendment Effective Date, the Agent
shall have received (i) a supplement to the Security Agreement in the
form of Annex A to the Security Agreement, duly executed by an
authorized
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signatory of PRG Finance, (ii) a supplement to the Guaranty in the
form of Annex A to the Guaranty, duly executed by an authorized
signatory of PRG Finance, (iii) stock certificates representing all of
the issued and outstanding stock of PRG Finance held by the Borrower,
together with undated stock powers executed in blank, and (iv) such
UCC Financing Statements, executed by an authorized signatory of PRG
Finance, as shall be reasonably requested by the Agent in order to
perfect the security interest in any collateral security granted under
the Security Agreement;
(c) the Agent shall have received a certificate, dated as of
the date PRG Finance shall have become a party to the Guaranty, of the
Secretary of PRG Finance (i) attaching a true and complete copy of the
resolutions of its Board of Directors and of all documents evidencing
all necessary corporate action (in form and substance satisfactory to
the Agent) taken by it to authorize the Loan Documents to which it is
a party and the transactions contemplated thereby, (ii) attaching a
true and complete copy of its Certificate of Incorporation and
By-Laws, (iii) setting forth the incumbency of its officers who may
sign such Loan Documents, including therein a signature specimen of
such officers, and (iv) attaching a certificate of good standing of
the Secretary of State of the State of its formation and each other
jurisdiction in which it is qualified to do business; and
(d) the Agent shall have received a revised Schedule 4.1 to
the Credit Agreement.
2. The Agent and the Lenders hereby consent to the Disposition by the
Borrower of its Real Property located at 000 Xxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxx
Xxxx, its Real Property located in Cornwall-on-Xxxxxx, New York, and its Real
Property located at 0000 Xxxxx Xxxxxx Xxxx Xxxxxxxxx, Xxx Xxxxx, Xxxxxx, and
waive the provision of Section 2.5(d) of the Credit Agreement requiring the
applications of the Net Cash Proceeds of such Dispositions to a prepayment of
the Revolving Credit Loans, provided that (i) such Dispositions shall be made
to Scenic Properties L.L.C. in exchange for the redemption or purchase of 100%
of the Capital Stock of the Borrower held by Scenic Properties L.L.C., but
subject to assumption by Scenic Properties L.L.C. of all obligations under
existing mortgages on such properties in an amount of not less than $3,500,000,
and (ii) the Borrower shall enter into a lease for such properties providing
for a lease period and such other terms and conditions as would be contained in
a lease between unrelated parties negotiated on an arms-length basis. Upon
consummation of such transactions, Scenic Properties L.L.C. shall be released
from its obligations under the Guaranty and Security Agreement.
3. The Agent and the Lenders hereby waive the provisions of Section
7.12 of the Credit Agreement with respect to any failure by the Borrower to
deliver a mortgage on the Real Property located at 0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxx within 30 days of such acquisition provided that
the Disposition referred to in Section 2 above of such Real Property shall have
occurred on or before February 15, 1998. If such Disposition has not occurred
by such date, the Borrower shall deliver a mortgage on such property not later
than
-16-
March 31, 1998 in favor of the Agent, containing such terms and conditions
as the Agent may reasonably require.
4. To allow for the changes in the corporate structure contemplated by
the amendment to the PRG Operating Agreement being done in connection with the
issuance of the Subordinated Indebtedness, the Agent and the Lenders hereby
consent to the merger of any Guarantor into any other Guarantor or the
Borrower, provided that, at the request of the Agent, the Borrower will provide
copies of any merger documents to the Agent.
Article III. Conditions of Effectiveness.
Sections 9 and 24 of Article I, and Article II, shall become effective
as of the date hereof when the Agent shall have received counterparts of this
Amendment executed by each of the Borrower, the Guarantors, the Lenders and the
Agent, and all other provisions of Article I shall become effective when, and
if, on or before February 28, 1998, each of the following conditions precedent
shall have been fulfilled (the "Amendment Effective Date"):
(a) The Agent shall have received copies, certified by the
Secretary or an Assistant Secretary of the Borrower to be correct, of
all company action taken by the Borrower to authorize the issuance of
the Subordinated Indebtedness and this Amendment and the transactions
contemplated thereby and hereby together with (i) the certificate of
formation and operating agreement of the Borrower and (ii) such other
documents as the Agent shall reasonably require;
(b) The Agent shall have received a certificate from a
Financial Officer of the Borrower certifying as to the following:
(i) that the Borrower has received the proceeds of
the Subordinated Indebtedness and setting forth the aggregate
amount of such Subordinated Indebtedness issued by the
Borrower;
(ii) that attached to such certificate are duly
executed, true and correct copies of the indenture, the
notes, the offering memorandum and all other documents
executed in connection with the issuance of the Subordinated
Indebtedness (the "Transaction Documents");
(iii) that each of the Transaction Documents
attached thereto is in full force and effect;
(c) The Agent shall have received a Compliance Certificate
from a Financial Officer of the Borrower as to the following: (i)
certifying as to compliance with Section 7.11 of the Credit Agreement
(the determination of compliance with such ratios to be
-17-
calculated on a pro forma basis as if such Subordinated Indebtedness
were incurred and proceeds thereof were so applied, in each case, at
the beginning of such period) and (ii) certifying that immediately
prior thereto and after giving effect to the incurrence of such
Subordinated Indebtedness, no Default shall have occurred and be
continuing;
(d) The Agent shall have received an opinion of counsel to
the Borrower in form and substance satisfactory to the Agent;
(e) All of the conditions precedent set forth in Article II,
Section 1 with respect to the Finance Formation shall have been
fulfilled in accordance with the terms and conditions thereto;
(f) The Agent shall be satisfied in all respects with the
Transaction Documents, including, without limitation, the
subordination provisions, and with respect to any guarantees issued by
Borrower's Subsidiaries in connection therewith;
(g) The fees and expenses of Special Counsel in connection
with the preparation, negotiation and closing of this Amendment, and
the effectiveness thereof, shall have been paid; and
(h) The Agent shall have received such other documents as the
Agent shall reasonably require.
Article IV. Other Provisions.
1. Except as specifically amended or waived above, the Credit
Agreement and all other Loan Documents shall remain in all respects in full
force and effect.
2. In order to induce the Agent and the Lenders to execute
this Amendment, the Borrower hereby (i) certifies that, immediately after
giving effect to this Amendment or any portion thereof, all representations and
warranties contained in the Credit Agreement are true and correct in all
respects as of the date hereof and that no Default or Event of Default exists
under the Credit Agreement, (ii) reaffirms and admits the validity and
enforceability of the Loan Documents and its obligations thereunder, and (iii)
agrees and admits that it has no valid defenses to or offsets against any of
its obligations to the Agent and the Lenders under the Loan Documents as of the
date hereof.
3. This Amendment may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute one agreement. It shall not be necessary in making proof of this
Amendment to produce or account for more than one counterpart signed by the
party to be charged.
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4. This Amendment is being delivered in and is intended to be
performed in the State of New York and shall be construed and enforceable in
accordance with, and be governed by, the internal laws of the State of New York
without regard to principles of conflict of laws.
5. This Amendment shall be subject to the conditions and
limitations specified herein, and the rights of the parties hereto under the
Loan Documents shall be otherwise unaffected.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
PRODUCTION RESOURCE GROUP,
L.L.C.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
THE BANK OF NEW YORK,
Individually and as Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
BANK OF SCOTLAND
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CIBC INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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CORESTATES BANK, N.A.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
FIRST UNION NATIONAL BANK
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
IBJ XXXXXXXX BANK & TRUST
COMPANY
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
KEY CORPORATE CAPITAL INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
USTRUST
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-00-
XXXXX XXXXXX XXXX AND TRUST
COMPANY
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-22-
Consent of Guarantors
The undersigned, as Guarantors to the Credit Agreement, each
hereby consents to the foregoing Amendment No. 1 and hereby confirms and
agrees that, notwithstanding the effectiveness of said Amendment No. 1 the
Guaranty and each Loan Document in effect on the date hereof to which it is
a party are, and shall continue to be, in full force and effect and are
hereby confirmed and ratified in all respects.
ECTS, A SCENIC TECHNOLOGY
COMPANY, INC., a New York
corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
THEATRE TECHNIQUES ASSOCIATES,
INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
ECTS CONTRACTING OF LAS VEGAS,
INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
XXXXXX PRODUCTION SERVICES, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-23-
ECTS, A SCENIC TECHNOLOGY
COMPANY, INC., a Delaware
corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SHOWPAY, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SCENIC PROPERTIES L.L.C.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
PRG PLANNING & DEVELOPMENT L.L.C.
By: PRODUCTION RESOURCE GROUP,
L.L.C., Majority Member
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SHOWPAY, L.L.C.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-24-
ATTRACTION MANAGEMENT L.L.C.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
-25-
