AMENDMENT NO. 1 AND WAIVER XX. 0
Xxxxxxxxx Xx. 0 and Waiver No. 1 (this "Amendment"), dated as of July
21, 1998, to the Credit Agreement (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), dated as of August 27,
1997, by and among VIDEO SERVICES CORPORATION, VSC MAL CORP., the Lenders party
thereto, and KEYBANK NATIONAL ASSOCIATION, as the Issuer and as the Agent.
RECITALS
I. Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Credit Agreement.
II. The Borrower and the Agent wish to amend the Credit Agreement upon
the terms, and subject to the conditions, herein contained.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrower and the Agent hereby
agree as follows:
1. The Borrower has reported to the Agent and the Lenders that, with
respect to the Borrower's fiscal year ended June 30, 1998, the Borrower and its
Subsidiaries on a Consolidated basis made Capital Expenditures in an aggregate
amount totalling nearly $9,800,000 and, therefore, the Borrower was in default
of its obligations under Section 8.6. The Agent hereby waives such default and
any Event of Default arising solely therefrom, provided that the aggregate
Capital Expenditures of the Borrower and its Subsidiaries on a Consolidated
basis for such fiscal year did not exceed $9,800,000.
2. The definition "Adjusted EBITDA" contained in Section 1.1(b) of the
Credit Agreement is amended by adding the following to the end thereof:
Notwithstanding anything in this definition to the contrary, for
purposes of this definition only, Capital Expenditures shall exclude
all Capital Expenditures of the Borrower and the Subsidiaries during
the fiscal years 1998 and 1999 directly attributable to establishing a
division of Audio plus Video International, Inc. on the West coast of
the contiguous part of the United States of America to the extent not
in excess of $5,100,000 in the aggregate on a Consolidated basis.
3. The grid contained in the definition "Applicable Margin" contained
in Section 1.1(b) of the Credit Agreement is amended and restated in its
entirety as follows:
Whenever the Commitment
Leverage Ratio is: Eurodollar Fee LC Fee
> 3.00 2.000% 0.375% 2.000%
-
> 2.50 < 3.00 1.750% 0.375% 1.750%
- -
> 2.00 < 2.50 1.500% 0.375% 1.500%
- -
> 1.25 < 2.00 1.250% 0.250% 1.250%
- -
< 1.25 1.000% 0.250% 1.000%
4. Section 7.11 of the Credit Agreement is amended and restated in its
entirety as follows:
7.11 Leverage Ratio
At each fiscal quarter end occurring during each period set forth below,
have a Leverage Ratio not greater than the ratio set forth adjacent to such
period:
Period Ratio
September 30, 1997 through
March 31, 1998 3.00:1.00
April 1, 1998 through
March 31, 1999 3.30:1.00
April 1, 1999 through
March 31, 2000 3.00:1.00
April 1, 2000 through
March 31, 2001 2.50:1.00
April 1, 2001 through
September 30, 2002 2.00:1.00
5. Section 7.12 of the Credit Agreement is amended and restated in its
entirety as follows:
7.12 Fixed Charge Coverage Ratio
At each fiscal quarter end occurring during each period set forth below,
have a Fixed Charge Coverage Ratio not greater than the ratio set forth adjacent
to such period:
Period Ratio
September 30, 1997 through
June 30, 1998 1.00:1.00
July 1, 1998 through
September 30, 1998 0.90:1.00
October 1, 1998 through
December 31, 1998 0.80:1.00
January 1, 1999 through
March 31, 1999 0.75:1.00
April 1, 1999 through
March 31, 2000 0.90:1.00
April 1, 2000 through
September 30, 2002 1.00:1.00.
6. The first paragraph of Section 8.4(e) of the Credit Agreement is amended
and restated in its entirety as follows:
(e) at any time on or after the date, if any, occurring
after July 1, 1998 upon which the Borrower shall have delivered to each
Lender (x) a Compliance Certificate pursuant to Section 7.7(d) showing
that the Fixed Charge Coverage Ratio was not less than 1.00:1.00 for
the second consecutive fiscal quarter, and (y) financial projections
indicating that the Borrower will be in compliance with Sections 7.11,
7.12 and 7.13 through September 30, 2002, other Acquisitions by the
Borrower or any Guarantor, in either case of one or more Operating
Entities (each an "Additional Permitted Acquisition"), provided that
7. Section 9.1(p) of the Credit Agreement is amended and restated in its
entirety as follows:
(p)(1) The Borrower shall have failed to deliver to the Agent, by no later
than October 31, 1997, the Environmental Questionnaire provided by Summit
Bank, duly completed in all material respects by all of the Loan Parties,
or (2) for the fiscal year ended 1998, the Borrower shall not have positive
net income on a Consolidated basis in accordance with GAAP.
8. Paragraphs 1 - 7 of this Amendment shall not be effective until such
date as each of the following conditions shall have been satisfied:
(a) Required Lenders shall have consented to the execution and delivery
hereof by the Agent.
(b) The Borrower shall have paid to the Agent, for the account of the
Lenders pro rata based upon their respective credit exposures under the
Credit Agreement, an amendment fee in the sum of $100,000.
(c) The Borrower shall have paid the reasonable fees and disbursements of
Special Counsel incurred in connection with this Amendment.
9. The Borrower hereby (a) reaffirms and admits the validity and
enforceability of all the Loan Documents and its obligations thereunder, (b)
agrees and admits that it has no valid defenses to or offsets against any such
obligation, (c) represents and warrants that no Default or Event of Default has
occurred or is continuing, (d) agrees to pay the reasonable fees and
disbursements of Special Counsel to the Agent incurred in connection with the
preparation, negotiation and closing of this Amendment, and (e) represents and
warrants that each of the representations and warranties made by it in the Loan
Documents is true and correct with the same effect as though such representation
and warranty had been made on the date hereof.
10. In all other respects, the Loan Documents shall remain in full force
and effect, and no amendment in respect of any term or condition of any Loan
Document contained herein shall be deemed to be an amendment in respect of any
other term or condition contained in any Loan Document.
11. This Amendment may be executed in any number of counterparts all of
which, taken together, shall constitute one Amendment. In making proof of this
Amendment, it shall only be necessary to produce the counterpart executed and
delivered by the party to be charged.
12. THIS AMENDMENT IS BEING EXECUTED AND 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.
AMENDMENT NO. 1 AND WAIVER NO. 1
VIDEO SERVICES CORPORATION
AS EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Amendment to be
duly executed on its behalf.
VIDEO SERVICES CORPORATION
By:/S/ Xxxxxx X. Xxxxx
Name:Xxxxxx X. Xxxxx
Title:Vice President & Chief
Financial Officer
VSC MAL CORP.
By:/s/ Xxxxxx X. Xxxxx
Name:Xxxxxx X. Xxxxx
Title:Vice President & Chief
Financial Officer
KEYBANK NATIONAL ASSOCIATION, in its
capacity as a Lender, as the
Issuer, and as the Agent
By:/s/ Xxxxxxx Xxxxxxxx
Name:Xxxxxxx Xxxxxxxx
Title:Senior Vice President
SUMMIT BANK
By:/s/ Xxxxxx Xxxxx
Name:Xxxxxx Xxxxx
Title:Vice President
