WAIVER AND FOURTH AMENDMENT TO
CREDIT AGREEMENT
THIS WAIVER AND FOURTH AMENDMENT TO CREDIT AGREEMENT (the "Amendment") is
dated as of August 19, 1996, and is by and between VIDEO LOTTERY TECHNOLOGIES,
INC., a Delaware corporation (the "Borrower") and FIRST BANK NATIONAL
ASSOCIATION, as administrative bank (the "Administrative Bank"), and FIRST BANK
NATIONAL ASSOCIATION as the sole Bank party (the "Bank") to that certain Credit
Agreement dated as of February 16, 1995, among the Borrower, the Administrative
Bank and such Bank, as amended by that certain Amendment No. 1 to Credit
Agreement and Waiver dated as of June 26, 1995, Second Amendment to Credit
Agreement dated as of March 4, 1996 and Third Amendment to Credit Agreement
dated as of April 30, 1996 (as so amended, the "Credit Agreement"). Capitalized
terms not otherwise expressly defined herein shall have the meanings set forth
in the Credit Agreement.
RECITALS
WHEREAS, the Borrower has requested that the Administrative Bank and the Bank
waive the Default arising under Section 10.1(d) of the Credit Agreement because
of the termination of the EDS Agreement in contravention of Section 8.11 of the
Credit Agreement; and
WHEREAS, the Administrative Bank and the Bank are willing to do so subject to
the terms and conditions of this Amendment.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I - WAIVER
The Administrative Bank and the Bank hereby waive the Default arising under
Section 10.1(d) of the Credit Agreement because of the termination of the EDS
Agreement in contravention of Section 8.11 of the Credit Agreement. The waiver
granted herein is limited to the specific Default described above and is not
intended, and shall not be construed, to be a general waiver of any term or
provision of the Credit Agreement or a waiver of any other existing or future
Default or Event of Default.
ARTICLE II - AMENDMENTS TO THE CREDIT AGREEMENT
2.1 Amendments to Credit Agreement. The Credit Agreement is hereby amended
as follows:
(a) Section 1.1 of the Credit Agreement is amended by respectively
amending the definitions of "Consolidated EBITDA", "Eurodollar Rate Loan
Unit", "Interest
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Periods", "Loan Documents", "Reference Rate Loan Unit", "Restricted
Subsidiary" and "Revolving Credit Commitment" to read as follows:
"'Consolidated EBITDA': For any period, the after-tax Consolidated
Adjusted Net Income of the Borrower for such period plus the sum of the
following amounts deducted in arriving at such Consolidated Adjusted Net
Income: (a) Consolidated Interest Expense; (b) federal, state and local
income taxes; and (c) depreciation and amortization and other non-cash
expenses; provided, however, that the Operations of UWS shall be included
in the calculation of Consolidated EBITDA notwithstanding that such
operations are being reported externally as discontinued.
'Eurodollar Rate Loan Unit': Each portion of any Loan designated as
such in a notice of borrowing under Section 2.3 or a notice of continuation
or conversion under Section 2.4.
'Interest Period': For any Eurodollar Rate Loan Unit, the period which
shall begin on (and include) the date of the initial borrowing date of
such Eurodollar Rate Loan Unit or the date of the conversion of any
Reference Rate Loan Unit into a Eurodollar Rate Loan Unit or the date
of the continuation of a Eurodollar Rate Loan Unit as a Eurodollar
Rate Loan Unit upon the termination of the Interest Period then
applicable thereto and, unless the final maturity of such Eurodollar
Rate Loan Unit is accelerated, shall end on the numerically
corresponding day which is one, two or three months thereafter in the
case of Eurodollar Rate Loan Units comprising part of the Revolving
Loans, one month thereafter in the case of Eurodollar Rate Loan Units
comprising part of Term Loan A or three months thereafter in the case
of Eurodollar Rate Loan Units comprising part of Term Loan B;
provided, however, that:
(a) any such Interest Period which would otherwise end on a
day not a Eurodollar Business Day shall end on the next
succeeding Eurodollar Business Day unless such next succeeding
Eurodollar Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding
Eurodollar Business Day;
(b) any Interest Period which begins on the last Eurodollar
Business Day of a calendar month (or on a day for which no
numerically corresponding day in the calendar month at the end of
such Interest Period) shall end on the last Eurodollar Business
Day of the calendar month at the end of such Interest Period;
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(c) no Interest Period for Eurodollar Rate Loan Units
comprising part of the Revolving Loans shall extend beyond the
Termination Date;
(d) no Interest Period relating to any Term Loan shall
extend beyond the stated Maturity of such Term Loan; and
(e) Interest Periods shall not be chosen for Eurodollar Rate
Loan Units which would require payment of any amount of such
Eurodollar Rate Loan Unit prior to the last day of the Interest
Period in order to pay any installment of any Term Loan when due
or in order to pay such Term Loan in full at its Maturity Date.
'Loan Documents': This Agreement, the Notes, the Borrower Pledge
Agreement, the AWI Security Agreement, the Subsidiary Guaranties, the
Letters of Credit, the Letter of Credit Applications, the VLT Security
Agreement, the Tote Pledge Agreement (if required by the
Administrative Bank and the Banks), the VLC Security Agreement and
each other instrument, document, guaranty, security agreement,
mortgage, or other agreement executed and delivered by the Borrower or
any other Loan Party pursuant to which the Borrower or such other Loan
Party incurs any liability to the Banks with respect to the
Obligations, agrees to perform any covenant or agreement with respect
to the Obligations or grants any security interest to secure the
Obligations.
'Reference Rate Loan Unit': Each portion of any Loan designated as
such in a notice of borrowing under Section 2.3 or a notice of
continuation or conversion under Section 2.4.
'Restricted Subsidiary': AWI and each of its Subsidiaries, VLC and
each of its Subsidiaries and any other Subsidiary whose capital stock
is subject to a Lien in favor of the Administrative Bank for itself
and the ratable benefit of the Banks.
'Revolving Credit Commitment': The maximum unpaid principal amount of
Revolving Loans and Letter of Credit Obligations which may from time
to time be outstanding hereunder, being $17, 500,000.00, as the same
may be reduced from time to time pursuant to Section 4.3 and, as the
context may require, the agreement of the Banks to make Revolving
Loans to the Borrower and of First Bank to issue Letter of Credit for
the account of the Borrower and of each Bank to purchase Letter of
Credit Participations, in each case subject to the terms and
conditions of this Agreement."
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(b) Section 1.1 of the Credit Agreement is further amended by adding
the following definitions of "AWI Security Agreement", "Borrower Security
Agreement", "Replacement Data Processing Services Contract", "Restricted
Contract", "Restricted Contract Obligor", "Tote Pledge Agreement", and VLC
Security Agreement":
"'AWI Security Agreement': The Security Agreement dated as of
August 19, 1996 made by AWI in favor of the Administrative Bank for
itself and the ratable benefit of the Banks, as originally executed
and as it may be amended, modified, supplemented, restated or replaced
from time to time.
'Borrower Security Agreement': The Security Agreement dated as of
August 19, 1996 made by the Borrower in favor of the Administrative
Bank for itself and the ratable benefit of the Banks, as originally
executed and as it may be amended, modified, supplemented, restated or
replaced from time to time.
'Replacement Data Processing Services Contract': Any contract
approved by the Administrative Bank and the Banks (which approval
shall not be unreasonably withheld or delayed) between the Borrower or
any of its Subsidiaries and a third party (including EDS) pursuant to
which such third party contracts to provide data processing services
to the Borrower or any of its Subsidiaries in connection with the
Borrower's or such Subsidiary's performance of its obligations under
the Material Contracts.
'Restricted Contract(s)': The Minnesota Contract and each other
Material Contract generating accounts now or hereafter subject to a
Lien in favor of the Administrative Bank for itself and the ratable
benefit of the Banks. The Restricted Contracts include, without
limitation, the contracts identified on Schedule 1.1 (Restricted
Contracts) attached to that certain Waiver and Fourth Amendment to
Credit Agreement dated as of August 19, 1996 (the "Fourth Amendment")
among the Borrower, the Administrative Bank and the Banks and
incorporated into this Agreement by reference.
'Restricted Contract Obligor(s)'. Each state lottery or other
Person (other than the Borrower or any of its Subsidiaries or Related
Parties) which is a party to a Restricted Contract. The Restricted
Contract Obligors include, without limitation, the parties identified
on Schedule 1.1 (Restricted Contracts) attached to the Fourth
Amendment and incorporated into this Agreement by reference.
'Tote Pledge Agreement': The Pledge Agreement, if any, required
by the Administrative Bank to be made by Tote in favor of the
Administrative Bank for itself and the ratable benefit of the Banks
pursuant to Section 8.13, as originally executed in the form attached
as part of Exhibit 1 to the Fourth
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Amendment and as it may be amended, modified, supplemented, restated
or replaced from time to time.
'VLC Security Agreement': The Security Agreement dated as of
August 19, 1996 made by VLC in favor of the Administrative Bank for
itself and the ratable benefit of the Banks, as originally executed
and as it may be amended, modified, supplemented, restated or replaced
from time to time."
(c) Section 2.2 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 2.2 Loan Units. Except as otherwise provided herein, the
Loans shall be comprised of Eurodollar Rate Loan Units and/or
Reference Rate Loan Units as shall be selected by the Borrower in
accordance with Section 2.3 and Section 2.4. Any combination of types
of Loan Units may be outstanding at the same time; provided, however,
that: (a) the Revolving Loans may not consist of more than five (5)
different Eurodollar Rate Loan Units; and (b) no Term Loan may consist
of more than two (2) different Eurodollar Rate Loan Units. Each
Eurodollar Rate Loan Unit shall be in a minimum amount of $100,000.00
or in an integral multiple of $100,000.00 above such amount. Each
Reference Rate Loan Unit shall be in an amount of not less than
$100,000.00.
(d) Section 2.3(a) of the Credit Agreement is amended in its entirety
to read as follows:
"(a) Revolving Loans. Any request by the Borrower for Revolving
Loans shall be in writing, or by telephone promptly confirmed in
writing if so requested by the Administrative Bank, and must be given
so as to be received by the Administrative Bank not later than 12:00
noon, Minneapolis time, on: (i) the date of the requested Revolving
Loans, if such Revolving Loans will not include Eurodollar Rate Loan
Units; or (ii) on the third Eurodollar Business Day prior to the date
of the requested Revolving Loans, if such Revolving Loans will include
Eurodollar Rate Loan Units. Each request for Revolving Loans shall
specify the borrowing date (which shall be a Business Day) and the
amount of such Revolving Loans. Each request for Revolving Loans shall
be in a minimum amount of $100,000.00. Each request for Revolving
Loans shall be deemed a representation and warranty by the Borrower
that all conditions precedent specified in Section 6.2 to such
Revolving Loans are satisfied on the date of such request and on the
date the requested Revolving Loans are made. Each written request or
confirmation shall be in the form of Exhibit E attached hereto.
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(e) Section 2.4 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 2.4 Continuation or Conversion of Loan Units for Loans.
The Borrower may elect to: (i) continue any outstanding Eurodollar
Rate Loan Unit from one Interest Period into a subsequent Interest
Period to begin on the last day of the earlier Interest Period; or
(ii) convert any outstanding Loan Unit into another Type of Loan Unit
(on the last day of an Interest Period only, in the instance of a
Eurodollar Rate Loan Unit), by giving the Administrative Bank notice
in writing, or by telephone promptly confirmed in writing if so
requested by the Administrative Bank, given so as to be received by
the Administrative Bank not later than 10:00 a.m., Minneapolis time:
(A) on the date of the requested continuation or conversion, if the
continuing or converted Loan Unit shall be a Reference Rate Loan Unit;
or (B) three (3) Eurodollar Business Days prior to the date of the
requested continuation or conversion, if the continuing or converted
Loan Unit shall be a Eurodollar Rate Loan Unit. Each notice of
continuation or conversion of a Loan Unit shall specify: (i) the
effective date of continuation or conversion (which shall be a
Business Day and, if the resulting Loan Unit is a Eurodollar Rate Loan
Unit, a Eurodollar Business Day); (ii) the amount and the Type or
Types of Loan Units following such continuation or conversion; and
(iii) for continuation as, or conversion into, Eurodollar Rate Loan
Units, the Interest Periods for such Loan Units. Absent timely notice
of continuation or conversion, each Eurodollar Rate Loan Unit shall
automatically convert into a Reference Rate Loan Unit on the last day
of an applicable Interest Period, unless paid in full on such last
day. No Loan Unit comprising part of the Revolving Loans or the Term
Loans, as the case may be, shall be continued as, or converted into, a
Eurodollar Rate Loan Unit if the Interest Period selected for such
Loan Unit may not transpire prior to the Maturity of the relevant Loan
or if a Default or Event of Default shall exist. Each written notice
of continuation or conversion shall be in the form of Exhibit G
attached hereto. The Administrative Bank shall give prompt written
notice to each Bank of any notice received by the Administrative Bank
from the Borrower pursuant to this Section 2.4."
(f) Section 2.6 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 2.6 Funding Losses. The Borrower will indemnify each
Bank upon demand against any loss or expense which such Bank may
sustain or incur (including, without limitation, any loss or expense
sustained or incurred in obtaining, liquidating or employing deposits
or other funds acquired to effect, fund or maintain any Loan Unit) as
a consequence of: (i) any failure of the Borrower to make any payment
when due of any amount
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due hereunder with respect to the principal of any Loan or under the
relevant Note; or (ii) any failure of the Borrower to borrow, continue
or convert a Loan Unit on a date specified therefor in a notice
thereof; or (iii) any payment (including, without limitation, any
payment pursuant to Section 4.2, 4.3 or 10.2), prepayment or
conversion of any Eurodollar Rate Loan Unit on a date other than the
last day of the Interest Period for such Loan Unit. Determinations by
a Bank for purposes of this Section 2.6 of the amount required to
compensate such Bank shall be conclusive in the absence of manifest
error, subject, however, to rebuttal by the Borrower."
(g) Section 2.7(e)(i) of the Original Agreement is amended by changing
the percentage "one and one-half percent (1.50%)" as set forth therein to
the percentage "one and three-quarters percent (1.75%)".
(h) Section 3.1 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 3.1 Interest.
(a) Revolving Loans.
(i) Subject to the provisions of Section
3.1(a)(ii), the Borrower agrees to pay interest on the
outstanding principal amount of each Revolving Loan from
the date of such Revolving Loan until the Maturity
thereof:
(A) With respect to each Reference Rate Loan
Unit comprising a portion of such Revolving Loan, at
a fluctuating rate per annum equal at all times to
the Reference Rate; and
(B) With respect to each Eurodollar Rate Loan
Unit comprising a portion of such Revolving Loan, at
a rate per annum equal at all times during the
Interest Period relating to such Eurodollar Rate
Loan Unit to the sum of the Eurodollar Rate (Reserve
Adjusted) in effect for such Interest Period plus
two and one-quarter percent (2.25%) per annum.
(ii) Notwithstanding the provisions of Section
3.1(a)(i), at all times after the occurrence and during
the continuance of any Event of Default, the Borrower
agrees to pay interest on the outstanding principal
amount of each Revolving Loan from the date on which the
Administrative Bank notifies
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the Borrower of such Event of Default at a rate per
annum at all times equal to the sum of the Reference
Rate plus two percent (2.0%) per annum.
(b) Term Loans.
(i) Subject to the provisions of Section
3.1(b)(ii), the Borrower agrees to pay interest on the
outstanding principal amount of each Term Loan from the
date of such Term Loan until the Maturity thereof as
follows:
(A) with respect to each Reference Rate Loan
Unit comprising a portion of such Term Loan, at a
fluctuating rate per annum equal at all times to the
Reference Rate;
(B) with respect to each Eurodollar Rate Loan
Unit comprising a portion of such Term Loan, at a
rate per annum equal at all times during the
Interest Period relating to such Eurodollar Rate
Loan Unit to the sum of the Eurodollar Rate (Reserve
Adjusted) in effect for such Interest Period plus
two and one-quarter percent (2.25%) per annum.
(ii) Notwithstanding the provisions of Section
3.1(b)(i), at all times after the occurrence and during
the continuance of any Event of Default, the Borrower
agrees to pay interest on the outstanding principal
balance of each Term Loan from the date on which the
Administrative Bank notifies the Borrower of such Event
of Default at a rate per annum at all times equal to the
sum of the Reference Rate plus two percent (2.0%) per
annum.
(c) All Loans.
(i) Until Maturity of a Loan: (A) interest accrued
through the end of a month on each Reference Rate Loan
Unit shall be payable on the Monthly Payment Date
coinciding with the end of such month, commencing on the
first such Monthly Payment Date following the Closing
Date; and (B) interest accrued during the applicable
Interest Period on each Eurodollar Rate Loan Unit shall
be payable on the last day of such applicable Interest
Period. Interest on each Loan shall also be
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payable at its Maturity. Interest accrued after Maturity
shall be payable on demand.
(ii) No provision of this Agreement or any Note
shall require the payment of interest in excess of the
rate permitted by applicable law."
(i) Section 4.2(a)(i) of the Credit Agreement is amended by changing
the words "any Term Loan" appearing therein to the words "any Loan".
(j) Section 4.2(d) of the Credit Agreement is amended in its entirety
to read as follows:
"(d) Application of Prepayments. Each prepayment of any Term Loan
shall be applied to the unpaid installments of such Loan in the
inverse order of their maturities. Subject to the immediately
preceding sentence, the Banks shall apply prepayments first to
Reference Rate Loan Units, then to Eurodollar Rate Loan Units having
an Interest Period ending on such day of prepayment and then to other
Eurodollar Rate Loan Units."
(k) Section 4.3 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 4.3 Mandatory Reduction of Revolving Credit Commitment.
The Revolving Credit Commitment shall be permanently reduced by the
amount of each reduction in the Letter of Credit Obligations occurring
after August 19, 1996 as a result of a reduction in the amount
available to be drawn on the Letters of Credit which does not result
from a drawing thereon. The reduction in the Revolving Credit
Commitment shall be applied to the Individual Revolving Credit
Commitments of the Banks pro rata in accordance with their
Percentages."
(l) Section 5.2 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 5.2 Deposits Unavailable or Interest Rate
Unascertainable or Inadequate; Impracticability. If any Bank
determines (which determination shall be conclusive and binding on the
parties hereto) that:
(a) deposits of the necessary amount for the relevant
Interest Period for any Eurodollar Rate Loan Unit are not
available to such Bank in the relevant market or that, by reason
of circumstances affecting such market, adequate and reasonable
means do not exist for ascertaining the Eurodollar Interbank Rate
for such Interest Period;
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(b) the Eurodollar Rate (Reserve Adjusted) will not
adequately and fairly reflect the cost to such Bank of making or
funding any Eurodollar Rate Loan Units for its relevant Interest
Period; or
(c) the making or funding of any Eurodollar Rate Loan Units
has become impracticable as a result of any event occurring after
the date of this Agreement which, in the opinion of such Bank,
materially and adversely affects such Loan Unit or such Bank's
Commitment to make such Loan Unit or the relevant market;"
such Bank shall promptly give notice of such determination to the
Borrower and the Administrative Bank, and (A) all Loans made by such
Bank shall accrue interest at the Reference Rate during the period on
and after the date of such Bank's notice through the date on which
such Bank determines that the circumstances giving rise to such Bank's
determination under subsection (a), (b) or (c) no longer exists; (B)
(1) any notice of a new Eurodollar Rate Loan Unit previously given by
the Borrower and not yet borrowed or converted shall be deemed, as to
such Bank, to be a notice to make a Reference Rate Loan Unit and (2)
the Borrower shall be obligated to either prepay in full any
outstanding Eurodollar Rate Loan Units without premium or penalty on
the last day of the current Interest Period with respect thereto or
convert any such Eurodollar Rate Loan Unit to a Reference Rate Loan
Unit on the last day of such Interest Period or, in either case, on
such earlier date as may be required by applicable law. Any prepayment
or conversion of any Eurodollar Rate Loan Unit prior the end of its
Interest Period shall be accompanied by any payment required by
Section 2.6."
(m) Section 8.(1)(i) of the Credit Agreement is amended in its
entirety to read as follows:
"(i) Immediately upon becoming aware of the occurrence thereof,
notice of the institution of any litigation, arbitration or
governmental proceeding, or the rendering of a judgment or decision in
such litigation or proceeding, which is material to the Borrower, any
of its Subsidiaries or any of their respective property, and the steps
being taken by the Person(s) affected by such proceeding and, with
respect to any judicial or arbitration proceeding between the Borrower
and any of its Subsidiaries, on the one hand, and EDS, on the other
hand, immediately upon service on the Borrower or any of its
Subsidiaries, notice of any motion or other procedural request by EDS
for an order or other form of relief which, if granted, would
interfere with the Borrower's or any of its Subsidiaries' unrestricted
right to use any of its assets in the conduct of its business or would
require the Borrower or any of its Subsidiaries to xxxxx x Xxxx to EDS
including, without limitation, any request
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by EDS for an order requiring the Borrower or any of its Subsidiaries
to deposit any money into escrow."
(n) Section 8.11 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 8.11 Restricted Contracts; Etc. (a) Perform, and cause
each of its Subsidiaries to perform, their respective duties,
obligations, liabilities and covenants under any Replacement Data
Processing Services Contract and each Restricted Contract in
accordance with the terms thereof; and (b) deliver to the Bank, and
cause each of its Subsidiaries to deliver to the Bank, copies of any
notice issued or received by such Person asserting that a breach or
default has occurred under any Material Contract or any Replacement
Data Processing Services Contract."
(o) Article VIII is amended by adding the following new Section 8.13:
"8.13 Tote Pledge Agreement. Immediately, but in no event more than
ten (10) Business Days' after the Administrative Bank requests that
Tote execute and deliver the Tote Pledge Agreement and obtains any
license that may be required by New Mexico law pertaining to the
licensing of owners or operators of race tracks, the Borrower shall
cause Tote to execute and deliver the Tote Pledge Agreement together
with a secretary's certificate and opinion of counsel in the form
attached as part of Exhibit 1 to the Fourth Amendment and the Borrower
shall co-operate, and cause Tote to co-operate, with the
Administrative Bank in obtaining any applicable license and the
Borrower shall pay and discharge all of the costs and expenses
incurred by the Administrative Bank in connection with obtaining such
license and the Tote Pledge Agreement."
(p) Section 9.2(c) of the Credit Agreement is amended in its entirety
to read as follows:
"(c) any of its property necessary or convenient to the
performance of any Restricted Contract unless such Person reserves for
itself all rights necessary to perform such Restricted Contract;"
(q) Section 9.6 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 9.6 Subsidiaries, Partnerships and Joint Ventures.
Either: (a) form or acquire any corporation which would thereby become
a Subsidiary; or (b) form or enter into any partnership as a limited
or general partner or form or enter into any joint venture."
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(r) Section 9.8 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 9.8 Restricted Contracts, Etc. (a) Amend, modify or
waive any material provision of any Replacement Data Processing
Services Contract or any Restricted Contract in any manner which
materially adversely affects the value of the Collateral or in
contravention of the provisions of any Loan Document; (b) assign or
transfer, by operation or law or otherwise, as collateral or
otherwise, any of the Borrower's or any of its Subsidiaries' right or
interest in or with respect to any Replacement Data Processing
Services Contract or any Restricted Contract, as the case may be,
except to the Administrative Bank for itself and the ratable benefit
of the Banks or as permitted by other Sections of this Article IX; or
(c) amend, modify or waive any subordination provision of the
subordinated notes issued by the Borrower under that certain Stock
Purchase Agreement dated April 18, 1994 between the Borrower and
Xxxxx, Xxxx and Xxxxx Xxxxxxxxx and the Xxxx Xxxxxxxx Xxxxxxxxx
Marital Trust as amended and restated by promissory notes dated March
25, 1996 from the subordination provisions set forth in the original
notes dated May 3, 1994, which subordination provisions apply to such
amended and restated notes."
(s) Section 9.9 of the Credit Agreement by inserting the word "and"
after the semi-colon following "subsection (h)" therefor, changing the
semi-colon following "subsection (i)" thereof to a period and by deleting
the remainder of Section 9.9.
(t) Section 9.10(d) of the Credit Agreement is amended in its entirety
to read as follows:
"(d) Other Indebtedness incurred by VLC or NSTC so long as: (i)
no Default or Event of Default has occurred and is continuing at the
time of the incurrence of such Indebtedness; (ii) the Indebtedness
incurred by VLC is for the purpose of financing its leases (including
revenue sharing contracts) of gaming machines to or with third parties
and the aggregate original principal amount of any such Indebtedness
incurred by VLC does not exceed $15,000,000.00; and (iii) the
aggregate original principal amount of any Indebtedness incurred by
NSTC does not exceed $10,000,000.00;"
(u) Section 9.11(c) of the Credit Agreement is amended in its entirety
to read as follows:
"(c) Liens granted by VLC securing only VLC's Indebtedness
permitted by Section 9.10(d); provided, however, that such Lien
attaches only to the gaming machines being financed by such
Indebtedness, the leases pertaining thereto and the proceeds of any
thereof;"
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(v) Section 9.12(a)(iii) of the Credit Agreement is amended by
changing the amount "$25,000,000.00" appearing therein to the amount
"$20,000,000.00".
(w) Section 9.15 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 9.15 Restricted Payments. Purchase or redeem or
otherwise acquire for value any shares of the Borrower's or any of its
Subsidiaries' stock, declare or pay any dividends thereon (other than
stock dividends), make any distribution on, or payment on account of
the purchase, redemption, defeasance or other acquisition or
retirement for value of, any shares of the Borrower's stock or set
aside any funds for any such purpose, except that: (a) any of the
Borrower's direct or indirect wholly-owned Subsidiaries may pay
dividends to its corporate parent; and (b) the Borrower and any of its
Subsidiaries may consummate any transaction permitted by Section 9.1."
(x) Section 9.17 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 9.17 Consolidated Net Worth. Permit, as of any Quarterly
Measurement Date, its Consolidated Net Worth to be less than the sum
of $81,400,000.00 plus 100% of the cumulative Consolidated Net Income
(without any deduction for losses) earned on and after January 1,
1996; minus the actual amount of charges taken in the second, third
and/or fourth quarter of the Borrower's 1996 fiscal year up to a
maximum deduction of $20,000,000.00."
(y) Section 9.18 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 9.18 Cash Flow Leverage Ratio. Permit, as of any
Quarterly Measurement Date, the Consolidated Cash Flow Leverage Ratio
to be greater than 2.5 to 1.0."
(z) Section 9.20 of the Credit Agreement is amended in its entirety to
read as follows:
"Section 9.20 Sale of Stock; etc. Permit any of its Subsidiaries
to sell any capital stock or any options, warrants or similar rights
to acquire any shares of, or other securities convertible into, any of
the Borrower's Subsidiaries' capital stock."
(aa) Section 10.1(h) of the Credit Agreement is amended in its
entirety to read as follows:
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"(h) A judgment or judgments for the payment of money in excess
of the sum of $5,000,000.00 in the aggregate for any or all of the
Loan Parties shall be rendered against any Loan Party and such Loan
Party shall not discharge the same or provide for its discharge in
accordance with its terms, or procure a stay of execution thereof,
prior to any execution on such judgments by such judgment creditor,
within 30 days from the date of entry thereof, and within said period
of 30 days, or such longer period during which execution of such
judgment shall be stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal or, without affecting the
applicability of the foregoing, any order or other form of relief is
entered in any judicial or arbitration proceeding between the Borrower
and any of its Subsidiaries, on the one hand, and EDS, on the other
hand, which interferes with the Borrower's or any of its Subsidiaries'
unrestricted right to use any of its assets in the conduct of its
business or requires that the Borrower or any of its Subsidiaries
xxxxx x Xxxx to EDS including, without limitation, any order or other
form of relief requiring the Borrower or any of its Subsidiaries to
deposit any money into escrow; or"
(ab) Section 10.1 of the Credit Agreement is amended by changing the
period following subsection "(n)" thereof to a semi-colon followed by the
word "or" and by adding the following new subsection "(o)":
"(o) The Borrower or any of its Subsidiaries week-to-week data
processing arrangement with EDS shall terminate unless a Replacement
Data Processing Services Contract is then in existence or unless the
Administrative Bank and the Banks has approved (which approval will
not be unreasonably delayed or withheld) AWI as the provider of data
processing services in connection with the Borrower's or its
Subsidiaries' performance of their obligations under the Material
Contracts."
(ac) Section 12.14 of the Credit Agreement is amended in its entirety
to read as follows:
"Section 12.14 Limitation on Interest in Restricted Contracts.
Notwithstanding anything contained herein or in any of the other Loan
Documents to the contrary, the covenants and other terms and
provisions set forth in this Agreement and/or the other Loan Documents
(including, without limitation, the rights, remedies of the
Administrative Bank and/or the Banks) with respect to any Restricted
Contract are ineffective, void ab initio, invalid and unenforceable to
the extent that such covenants, terms, provisions, rights or remedies
in any way violate, or constitute or result in a breach of or default
under any covenant or other term or provision set forth in such
Restricted Contract as construed under applicable law including,
without limitation,
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Section 9-318(4) of the Code, or require the consent of any third
party (other than the Borrower or any of its Subsidiaries) which is a
party to such Restricted Contract."
(ad) Exhibit E to the Credit Agreement is amended to conform to
Exhibit E (Amended 8/96) attached hereto.
(ae) Exhibit G to the Credit Agreement is amended to conform to
Exhibit G (Amended 8/96) attached hereto.
(af) Schedule 7.6 to the Credit Agreement is amended to conform to
Schedule 7.6 (Amended 8/96) attached hereto.
2.2 Construction. All references in the Credit Agreement to "this
Agreement," "herein" and similar references shall be deemed to refer to the
Credit Agreement as amended by this Amendment.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
To induce the Lender to enter into this Amendment and to make and maintain
the Loans under the Credit Agreement as amended hereby, the Borrower hereby
warrants and represents to the Lender that: (a) The execution, delivery and
performance by the Borrower of this Amendment, the Replacement Notes (as
hereinafter defined) and any other documents to which the Borrower is a party
have been duly authorized by all necessary corporate or partnership action, do
not require any approval or consent of, or any registration, qualification or
filing with, any government agency or authority or any approval or consent of
any other person (including, without limitation, any stockholder or partner), do
not and will not conflict with, result in any violation of or constitute any
default under, any provision of the Borrower's articles of incorporation or
bylaws, any agreement binding on or applicable to the Borrower or any of its
property, or any law or governmental regulation or court decree or order,
binding upon or applicable to the Borrower or of any of its property and will
not result in the creation or imposition of any security interest or other lien
or encumbrance in or on any of its property pursuant to the provisions of any
agreement applicable to the Borrower or any of its property; (b) The Credit
Agreement as amended by this Amendment and the Replacement Notes are the legal,
valid and binding obligations of the Borrower and are enforceable in accordance
with their respective terms, subject only to bankruptcy, insolvency,
reorganization, moratorium or similar laws, rulings or decisions at the time in
effect affecting the enforceability of rights of creditors generally and to
general equitable principles which may limit the right to obtain equitable
remedies.
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ARTICLE IV - CONDITIONS AND EFFECTIVENESS
This Amendment shall become effective on the date first set forth above,
provided, however, that the effectiveness of this Amendment is subject to the
satisfaction of each of the following conditions:
4.1 Before and after giving effect to this Amendment, the
representations and warranties in ARTICLE VII of the Credit Agreement shall
be true and correct as though made on the date hereof except for changes
that are permitted by the terms of the Credit Agreement and for the
litigation now scheduled on Schedule 7.6 (Amended 8/96). The execution by
the Borrower of this Amendment shall be deemed a representation that the
Borrower has complied with the foregoing condition.
4.2 Before and after giving effect to this Amendment, no Default or no
Event of Default shall have occurred and be continuing under the Credit
Agreement except for those expressly waived by the terms hereof. The
execution by the Borrower of this Amendment shall be deemed a
representation that the Borrower has complied with the foregoing condition.
4.3 The Administrative Bank shall have received a duly executed copy
of this Amendment and the following documents or other items appropriately
completed and duly executed by the Borrower and the other Loan Parties
where appropriate:
(a) a replacement Revolving Note (the "Replacement Revolving
Note") in the form provided by the Administrative Bank appropriately
completed and duly executed by the Borrower;
(b) a replacement Term Note A (the "Replacement Term Note A") in
the form provided by the Administrative Bank appropriately completed
and duly executed by the Borrower;
(c) a replacement Term Note B (the "Replacement Term Note B"; and
together with the Replacement Revolving Note and Replacement Term Note
A being sometimes hereinafter referred to collectively as the
"Replacement Notes" and individually as a "Replacement Note") in the
form provided by the Administrative Bank appropriately completed and
duly executed by the Borrower;
(d) an Amendment No. 2 to the Borrower Pledge Agreement (the
"Pledge Agreement Amendment") in the form provided by the
Administrative Bank appropriately completed and duly executed by the
Borrower pursuant to which, among other things, the Borrower pledges
to the Administrative Bank not less than 100% of AWI's, VLC's, UWS',
Raven's D& R Music, Inc.'s, Automatic Music Services, Inc.'s and
Automation First, Inc.'s issued and
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outstanding stock, together with the original stock certificates for
such stock and undated stock powers signed by the Borrower in blank;
(e) the Borrower Security Agreement in the form provided by the
Administrative Bank appropriately completed and duly executed by the
Borrower together with UCC-1 Financing Statements in a form acceptable
to the Banks appropriately completed and duly executed by the
Borrower;
(f) a Consent in the form provided by the Administrative Bank
appropriately completed and duly executed by each Guarantor;
(g) the AWI Security Agreement appropriately completed and duly
executed by AWI together with UCC-1 Financing Statements in a form
acceptable to the Banks appropriately completed and duly executed by
AWI;
(h) the VLC Security Agreement appropriately completed and duly
executed by VLC together with UCC-1 Financing Statements in a form
acceptable to the Banks appropriately completed and duly executed by
VLC;
(i) recent UCC searches from the filing offices in all states
required by the Banks which reflect that no Person holds a Lien in any
of the Borrower's or any of its Subsidiaries' assets other than
Permitted Liens;
(j) a certified copy of Resolutions of the Board of Directors of
each Loan Party authorizing or ratifying the execution, delivery and
performance of this Amendment, the Replacement Notes, the Pledge
Agreement Amendment and any other documents provided for in this
Amendment;
(k) a certificate by the Secretary or any Assistant Secretary of
each Loan Party certifying the names of the officers of such Loan
Party authorized to sign this Amendment, the Replacement Notes, the
Pledge Agreement Amendment and any other documents provided for in
this Amendment together with a sample of the true signature of such
officers;
(l) an Opinion of Counsel to the Loan Parties in form and
substance satisfactory to the Administrative Bank and the Bank;
(m) an amendment fee of $50,000.00 in immediately available
funds; and
(n) such other approvals, opinions or documents as the
Administrative Bank or the Bank may reasonably request.
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ARTICLE V - GENERAL
5.1 Expenses. The Borrower agrees to reimburse the Administrative Bank and
each Bank upon demand for all reasonable expenses, including reasonable fees of
attorneys and legal expenses incurred by the Administrative Bank or such Bank in
the preparation, negotiation and execution of this Amendment and any other
document required to be furnished herewith, and in enforcing the obligations of
the Borrower hereunder, and to pay and save the Administrative Bank and the
Banks harmless from all liability for, any stamp or other taxes which may be
payable with respect to the execution or delivery of this Amendment, which
obligations of the Borrower shall survive any termination of the Credit
Agreement.
5.2 Counterparts. This Amendment may be executed in as many counterparts as
may be deemed necessary or convenient, and by the different parties hereto on
separate counterparts, each of which, when so executed, shall be deemed an
original but all such counterparts shall constitute but one and the same
instrument.
5.3 Severability. Any provision of this Amendment which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining portions hereof or affecting the validity or enforceability of such
provisions in any other jurisdiction.
5.4 Law. This Amendment shall be a contract made under the laws of the
State of Minnesota, which laws shall govern all the rights and duties hereunder.
5.5 Successors: Enforceability. This Amendment shall be binding upon the
Borrower , the Administrative Bank and each Bank and their respective successors
and assigns, and shall inure to the benefit of the Borrower, the Administrative
Bank and each Bank and the successors and assigns of the Administrative Bank and
each Bank. Except as hereby amended, the Credit Agreement shall remain in full
force and effect and is hereby ratified and confirmed in all respects.
5.6 Recitals. The recitals hereto are incorporated herein by reference and
constitute an integral part of this Amendment.
5.7 Acknowledgement and Release. In order to induce the Administrative Bank
and the Banks to enter into this Amendment, the Borrower represents and warrants
to the Administrative Bank and the Bank that no events have taken place and no
circumstances exist at the date hereof which would give the Borrower the right
to assert a defense, offset or counterclaim to any claim by the Administrative
Bank or the Bank for payment of the Obligations.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the date
first written above.
VIDEO LOTTERY TECHNOLOGIES, INC.,
a Delaware corporation
By: /S/ Xxxxxxx X. Xxxxxxxx
---------------------------------------
Title: Executive Vice President
FIRST BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE BANK AND A BANK
By /S/ Xxxxx X. Xxxxxxx
---------------------------------------
Its: Vice President
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