THIRD AMENDMENT AND WAIVER, dated as of July 30, 1999 (this "Amendment") to
the Credit Agreement dated as of October 28, 1997 (as heretofore amended,
supplemented or otherwise modified, the "Credit Agreement"), among CARIBINER
INTERNATIONAL, INC., a Delaware corporation (the "Parent"), CARIBINER, INC., a
New York corporation (the "Company"; together with the Parent, the "Borrowers"),
the several banks and other financial institutions from time to time parties
thereto (the "Lenders"), THE CHASE MANHATTAN BANK, as Administrative Agent for
the Lenders (in such capacity, the "Administrative Agent") and XXXXXXX XXXXX
CAPITAL CORPORATION, as Syndication Agent (in such capacity, the "Syndication
Agent"; collectively with the Administrative Agent, the "Agents").
W I T N E S S E T H :
WHEREAS, the Borrowers, the Lenders and the Agents are parties to the
Credit Agreement, pursuant to which the Lenders have agreed to make, and have
made, certain loans and other extensions of credit to the Borrowers on the terms
and subject to the conditions thereof; and
WHEREAS, the Borrowers have requested that certain provisions of the Credit
Agreement be amended and waived; and
WHEREAS, the Lenders are willing to agree to such requested amendments and
waivers on the terms and conditions provided for in this Amendment.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the
Borrowers, the Lenders and the Administrative Agent hereby agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used herein and not otherwise defined shall have their
respective meanings set forth in the Credit Agreement.
SECTION 2. AMENDMENTS.
2.1 Amendment to Section 1.01 of the Credit Agreement. (a) Section 1.01 of
the Credit Agreement is hereby amended by deleting the proviso to the definition
of the term "Applicable Margin".
(b) Section 1.01 of the Credit Agreement is hereby further amended by
adding the following new definitions in their proper alphabetical order:
"`Consolidated Unadjusted EBITDA': means, for any period, the sum of (a)
Consolidated Net Income for such period (excluding, to the extent included
in such Consolidated Net Income, (i) any non-cash income or expense other
than the items covered in (b), (c) or (d) below and (ii) any gains or
losses from sales, exchange and other dispositions of property not in the
ordinary course of business), plus to the extent deducted in determining
such Consolidated Net Income (b) income taxes accrued during such period,
(c) depreciation and amortization for such period, (d) interest accrued in
such period, as computed on the accrual method in accordance with GAAP and
(e) any other non-cash charges."
"`Financial Consultant': means a nationally recognized firm or individual
specializing in providing financial consulting and advisory services to
overleveraged and/or underperforming corporations that is reasonably
satisfactory to the Administrative Agent."
2.2 Amendments to Section 2.06. (a) Section 2.06 of the Credit Agreement is
hereby amended by deleting paragraph (h) of said Section in its entirety and
substituting therefor the following new paragraph (h):
"(h) If any Indebtedness (other than Indebtedness permitted by paragraphs
(a) through (h) of Section 7.02) shall be incurred by the Parent or any of
its Subsidiaries, an amount equal to 100% of the Net Cash Proceeds thereof
shall be applied on the date of such issuance or incurrence, first, to the
prepayment of the Term Loans and, second, to reduce permanently the
Revolving Credit Commitments, in each case as provided in Sections
2.06(l)."
(b) Section 2.06 of the Credit Agreement is hereby further amended by
deleting paragraph (i) of said Section in its entirety and substituting therefor
the following new paragraph (i):
"(i) If on any date the Parent or any of its Subsidiaries receives Net Cash
Proceeds from any Asset Sale, other Disposition or Recovery Event, then the
Borrowers shall on such date apply an amount equal to 100% of such Net Cash
Proceeds first, to the prepayment of the Term Loans and, second, to reduce
permanently the Revolving Credit Commitments, in each case as provided in
Section 2.06(l)."
(c) Section 2.06 of the Credit Agreement is hereby further amended by
deleting paragraph (l) of said Section in its entirety and substituting therefor
the following new paragraph (l):
2
"(l) Prepayments of the Term Loans shall be applied to the installments
thereof in inverse order of maturity. Any reduction of the Revolving Credit
Commitments pursuant to Sections 2.06(h) or (i) shall be accompanied by
prepayment of the Revolving Credit Loans and/or Swing Line Loans to the
extent, if any, that the aggregate Revolving Credit Exposure of all Lenders
exceeds the aggregate Revolving Credit Commitments of all Lenders as so
reduced, provided that if the aggregate principal amount of Revolving
Credit Loans and Swing Line Loans then outstanding is less than the amount
of such excess (because L/C Obligations constitute a portion thereof), the
Borrower shall, to the extent of the balance of such excess, apply such
balance first, to the payment of L/C Obligations that are comprised of
unreimbursed drawings under Letters of Credit and second, to the cash
collateralization of L/C Obligations comprised of outstanding and undrawn
Letters of Credit by depositing an amount in cash equal to the face amount
of such outstanding and undrawn Letters of Credit in a cash collateral
account established with the Administrative Agent for the benefit of the
Issuing Bank and the Lenders on terms and conditions satisfactory to the
Administrative Agent.".
2.3 Amendments to Section 6.01 of the Credit Agreement. (a) Section 6.01 of
the Credit Agreement is hereby amended by deleting the phrase "within 120" from
paragraph (a) of said Section and substituting therefor the following:
"no later than the earlier to occur of (i) 5 Business Days after Ernst &
Young LLP or another independent public accountant of recognized national
standing gives its approval of Parent's audited consolidated balance sheet
and related statements of operations, stockholders' equity and cash flows
for the fiscal year of the Parent and (ii) 90".
(b) Section 6.01 of the Credit Agreement is hereby further amended by
deleting the number "50" from paragraph (b) of said Section and substituting
therefor the number "45".
(c) Section 6.01 of the Credit Agreement is hereby further amended by (i)
renumbering paragraphs "(c)" through "(h)" of said Section as paragraphs "(d)"
through "(i)" and (ii) adding the following new paragraph (c) after paragraph
(b) of said Section:
"(c) as soon as available, but in any event within 40 days after the end of
each month, commencing with June, 1999, the unaudited, consolidated
summaries of operations and cash flows of the Company and its consolidated
Subsidiaries for such month and the then elapsed portion of the fiscal
year, in form and substance satisfactory to the Administrative Agent,
certified by the Chief Financial Officer of the Company as presenting
fairly the consolidated summaries of operations and cash flow of the
Company and its consolidated Subsidiaries for such
3
month in accordance with the Company's normal internal management reporting
practices, subject to quarter-end and year-end adjustment;".
(d) Section 6.01 of the Credit Agreement is hereby further amended by (i)
deleting the reference to "Sections 7.01(a) and (b)" contained in (renumbered)
paragraph (e) of said Section and substituting therefor a reference to "Sections
7.01(a), (b), (c) and (d)" and (ii) inserting the phrase "and Consolidated
Unadjusted EBITDA" after the words "EBITDA" in said paragraph (e).
(e) Section 6.01 of the Credit Agreement is hereby further amended by (i)
deleting the word "and" at the end of (renumbered) paragraph (h) of said
Section, (ii) deleting the period at the end of (renumbered) paragraph (i) of
said Section and substituting therefor"; and", and (iii) adding the following
new paragraph (j) to the end of said Section:
"(j) within 10 days following the end of each month beginning with month
ended July 30, 1999, a report of the Borrowers' investment banker setting
forth the status of the Asset Sale program of the Parent and its
Subsidiaries (as described to the Lenders at the July 8, 1999 Lender
meeting) as at the end of such month and comparing the then current
timetable for such program with the timetable described at the July 8, 1999
Lender meeting (it being understood that such report shall be subject to
the confidentiality provisions of Section 10.16 of the Credit Agreement)."
2.5 Amendments to Article VI of the Credit Agreement. Article VI of the
Credit Agreement is hereby amended by adding the following new Section 6.15 to
said Article:
"SECTION 6.15. Financial Consultant. Unless the Borrowers shall have
obtained by December 31, 1999, the consent of the Majority Lenders,
pursuant to Section 7.06 of the Credit Agreement, to one or more Asset
Sales that are the subject of definitive agreements executed by the parties
thereto, which Asset Sale is (or Asset Sales are) reasonably estimated by
the Borrowers' investment banker to result in aggregate Net Cash Proceeds
of not less than $200,000,000, the Borrower shall retain a Financial
Consultant by January 14, 2000."
2.6 Amendments to Section 7.01 of the Credit Agreement. Section 7.01 of the
Credit Agreement is hereby amended by adding after paragraph (b) of said Section
the following new paragraphs (c) and (d):
"(c) Consolidated Unadjusted EBITDA. Permit Consolidated Unadjusted EBITDA
for any period of four consecutive fiscal quarters ending on any date set
forth below to be less than the amount set forth opposite such date:
4
Period End Date Amount
--------------- -----------
6/30/99 $50,000,000
9/30/99 $60,000,000
12/31/99 $60,000,000"
(d) Capital Expenditures. Permit Capital Expenditures for any period set
forth below to exceed the amount set forth opposite such period:
Period Amount
---------------- -----------
7/1/99-9/30/99 $10,000,000
10/1/99-12/31/99 $10,000,000"
2.7 Amendments to Section 8 of the Credit Agreement. Section 8 of the
Credit Agreement is hereby amended by (i) inserting "6.15," after the reference
to "6.14," in paragraph (c) of said Section and (ii) adding the following phrase
to the end of paragraph (c) of said Section: "the Borrowers shall default in the
observance or performance of any agreement contained in Section 6.01 of this
Agreement and such default shall continue unremedied for a period of five (5)
Business Days; or".
2.7 Amendments to Section 8 of the Credit Agreement. Annex A to the Credit
Agreement is hereby amended by deleting said Annex A in its entirety and
substituting therefor the "Annex A" attached hereto as Exhibit 1.
SECTION 4. WAIVER.
The Lenders hereby waive until March 30, 2000, any Default or Event of
Default under Section 8(c) of the Credit Agreement resulting from the Borrowers'
failure to maintain the Consolidated Leverage Ratio required by Section 7.01(a)
of the Credit Agreement or the ratio of Consolidated EBITDA less Capital
Expenditures to Consolidated Cash Interest Expense required by Section 7.01(b)
of the Credit Agreement, in each case for the periods of four fiscal quarters
ending June 30, 1999, September 30, 1999 and December 31, 1999.
SECTION 5. MISCELLANEOUS.
5.1. Representations and Warranties; No Default. After giving effect to
this Amendment, the Borrowers hereby represent and warrant that all
representations and warranties contained in the Credit Agreement are true and
correct in all material respects as of the date hereof (unless stated to relate
to a specific earlier date, in which case, such representations and warranties
shall be true and correct in all material respects as of such
5
earlier date) and that no Default or Event of Default shall have occurred and be
continuing or would result from the execution and delivery of this Amendment.
5.2. Conditions to Effectiveness of this Amendment. This Amendment shall be
effective as of the date first set forth above upon the satisfaction of the
following conditions:
(a) receipt by the Administrative Agent of counterparts hereof duly
executed and delivered by the Borrowers and Majority Lenders and consented to by
the Loan Parties (other than the Borrowers);
(b) the payment by the Borrowers to the Administrative Agent, for the
benefit of each Lender delivering its duly executed counterpart hereof on or
prior to July 28, 1999, of a fee equal to .25% of the aggregate principal amount
of the Revolving Credit Commitment and outstanding Term Loans of such Lender;
and
(c) the payment by the Borrowers of the costs and expenses of the
Administrative Agent owing under Section 10.05 of the Credit Agreement and for
which invoices have been submitted.
5.3. Limited Effect. Except as expressly amended by this Amendment, the
Credit Agreement is and shall continue to be in full force and effect in
accordance with its terms, and this Amendment shall not constitute the Lenders'
consent or indicate their willingness to consent to any other amendment,
modification or waiver of the Credit Agreement or the other Loan Documents.
5.4 Counterparts. This Amendment may be executed by the parties hereto on
one or more counterparts, and all of such counterparts shall be deemed to
constitute one and the same instrument. This Amendment may be delivered by
facsimile transmission of the relevant signature pages hereof.
5.5 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
[remainder of page intentionally left blank]
6
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
CARIBINER INTERNATIONAL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CARIBINER, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
7
THE CHASE MANHATTAN BANK, individually
and as Administrative Agent
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
XXXXXXX XXXXX CAPITAL CORPORATION,
individually and as Syndication Agent
By: /s/ Xxxxxxxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxxxxxxx Xxxxxxx
Title:
BANKBOSTON, N.A.
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
BANKERS TRUST COMPANY
By: /s/ G. Xxxxxx Xxxxx
-------------------------------------
Name: G. Xxxxxx Xxxxx
Title: Vice President
8
BANK OF AMERICA ILLINOIS
By:
-------------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By: /s/ Xxxxx-Xxxx Xxxxxxxxx
-------------------------------------
Name: Xxxxx-Xxxx Xxxxxxxxx
Title: Vice President
BANK OF HAWAII
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Senior Relationship Manager
9
BANK POLSKA KASA OPIEKI S.A.
PEKAO S.A. GROUP, NEW YORK BRANCH
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By: /s/ Xxxx XxXxxxx /s/ Xxxxx XxXxxxxxxx
-------------------------------------
Name: Xxxx XxXxxxx Xxxxx XxXxxxxxxx
Title: Vice President Vice President
CWC DEBT INVESTORS, LLC
By: Farallon Capital Management, L.L.C.,
its manager
By:
-------------------------------------
Name:
Title:
FERNWOOD ASSOCIATES, L.P.
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Name: Xxxxx X. Xxxxx
Title: General Partner
10
FIRST UNION NATIONAL BANK
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President
FIR TREE INSTITUTIONAL VALUE FUND
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
FIR TREE VALUE PARTNERS, LLC
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
FIR TREE VALUE FUND
By: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: President
FLEET BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
11
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
CHASE SECURITIES INC.,
as Agent for The Chase Manhattan Bank
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Authorized Signatory
SUMMIT BANK
By:
-------------------------------------
Name:
Title:
XXX XXXXXX PRIME RATE INCOME TRUST
By: Xxx Xxxxxx Investment Advisory Corp.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
12
XXX XXXXXX SENIOR INCOME TRUST
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
13
Each of the undersigned hereby consents to the foregoing Third Amendment
and Waiver and hereby confirms, reaffirms and restates that its obligations
under or in respect of the Credit Agreement and the documents related thereto to
which it is a party are and shall remain in full force and effect after giving
effect to the foregoing Third Amendment and Waiver.
CARIBINER INTELLECTUAL PROPERTY
MANAGEMENT, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CARIBINER AUDIO VISUAL SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
HRI, V.I., INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
14
VISUAL ACTION HOLDINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Executive Vice President and
Chief Financial Officer
CARIBINER SERVICES LIMITED
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
CARIBINER EUROPE LIMITED
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Director
VISUAL ACTION HOLDINGS LIMITED
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
15
EXHIBIT 1
Annex A
Leverage Grid
=================================================================================================================================
If the If the If the If the If the If the
Consolidated Consolidated Consolidated Consolidated Consolidated Consolidated
Leverage Ratio Leverage Leverage Leverage Ratio Leverage Ratio Leverage Ratio
is less than 2.0 Ratio is less Ratio is less is less than 3.5 is less than 4.0 is greater than
to 1.0 than 2.5 to 1.0 than 3.0 to 1.0 to 1.0 but to 1.0 but or equal to 4.0
but greater than but greater than greater than or greater than or to 1.0
or equal to 2.0 or equal to 2.5 equal to 3.0 to equal to
to 1.0 to 1.0 1.0 3.5 to 1.0
---------------------------------------------------------------------------------------------------------------------------------
Commitment Fee 50.0 bps 50.0 bps 50.0 bps 50.0 bps 50.0 bps 50.0 bps
---------------------------------------------------------------------------------------------------------------------------------
Eurodollar 175.0 bps 200.0 bps 225.0 bps 250.0 bps 300.0 bps 325.0 bps
Applicable
Margin
---------------------------------------------------------------------------------------------------------------------------------
ABR 75.0 bps 100.0 bps 125.0 bps 150.0 bps 200.0 bps 225.0 bps
Applicable
Margin
=================================================================================================================================
On the effective date of the Third Amendment, the Commitment Fee Rate shall be
50.0 bps, the Applicable Margin for Eurodollar Loans shall be 325.0 bps and the
Applicable Margin for ABR Loans shall be 225.0 bps.
Beginning with the fiscal quarter ending December 31, 1998 changes in the
Applicable Margin or in the Commitment Fee Rate resulting from changes in the
Consolidated Leverage Ratio shall become effective on the date (the "Adjustment
Date") on which financial statements are delivered to the Lenders pursuant to
Section 6.01 (but in any event not later than the 45th day after the end of each
of the first three quarterly periods of each fiscal year or the 90th day after
the end of each fiscal year, as the case may be) and shall remain in effect
until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Consolidated Leverage Ratio as at the end of the fiscal period that would have
been covered thereby shall for the purposes of this definition be deemed to be
greater than 4.0 to 1. Each determination of the Consolidated Leverage Ratio
pursuant to this definition shall be made with respect to the period of four
consecutive fiscal quarters of the Parent and its Subsidiaries ending at the end
of the period covered by the relevant financial statements.
