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EXHIBIT 10.8
SEVENTH AMENDMENT TO CREDIT AGREEMENT
THIS SEVENTH AMENDMENT TO CREDIT AGREEMENT, dated as of February 28,
2001 (this "Amendment" or this "Seventh Amendment"), is by and between THE
XXXXXXXX GROUP, INC., a Delaware corporation (the "Borrower"), certain financial
institutions party to the Credit Agreement (as hereinafter defined), and FIRST
UNION NATIONAL BANK, a national banking association, as administrative agent for
the Lenders (the "Administrative Agent"), FLEET BANK, N.A. as documentation
agent ("Documentation Agent"), and KEYBANK NATIONAL ASSOCIATION, as co-agent
(the "Co-Agent").
This Amendment amends that certain Credit Agreement, dated as of January
22, 1999, between the Borrower, the Lenders, the Administrative Agent, the
Documentation Agent and the Co-Agent (as previously amended, the "Credit
Agreement"). All capitalized terms not otherwise defined in this Amendment shall
have the meanings assigned to them in the Credit Agreement.
RECITALS
A. The Borrower has requested an extension of the waivers granted in the
Fifth Amendment to Credit Agreement dated as of July 31, 2000 (the "Fifth
Amendment") and the Sixth Amendment to Credit Agreement dated as of December 15,
2000 (the "Sixth Amendment") with respect to Sections 7.1 and 7.2 of the Credit
Agreement.
B. The Borrower has requested that the Required Lenders agree to
continue, to but not including April 15, 2001, the effect of the amendment to
the definition of "Applicable Margin Percentage" effected by the Sixth
Amendment.
C. The Borrower intends to request a temporary increase of $20,000,000
in the aggregate Revolving Credit Commitments, as contemplated by Section 2.19
of the Credit Agreement.
D. The Borrower has requested certain other consents and waivers all as
more particularly set forth herein.
E. The parties are willing to agree to the foregoing on the terms and
conditions set forth herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and in the Credit Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
each of the Borrower and the Required Lenders hereby agree as follows:
ARTICLE I
AMENDMENTS AND WAIVERS UNDER THE CREDIT AGREEMENT
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1.1 FINANCIAL COVENANTS. As of the Effective Date (as defined in Section
3.7), the Required Lenders and the Borrower agree that, with respect to Sections
7.1(a), 7.1(b) and 7.2 of the Credit Agreement:
(a) compliance by the Borrower with the requirements of Sections
7.1(a), 7.1(b) and 7.2 (and any Default or Event of Default resulting
from the Borrower's failure to comply during such period with the
original terms of such Sections) are waived for the period from December
15, 2000 to but not including the later of April 15, 2001 and the
Certificate Date (as defined below);
(b) the Borrower shall be deemed to have been in compliance with
Sections 7.1(a), 7.1(b) and 7.2 as of the Certificate Date if (but only
if) on or before April 15, 2001, the Borrower shall provide to the
Administrative Agent a certificate executed by a Financial Officer of
the Borrower (the date such certificate is provided to the
Administrative Agent being the "Certificate Date"), satisfactory in form
and substance to the Administrative Agent, setting forth a pro forma
calculation of the Leverage Ratio, the Senior Leverage Ratio and the
Interest Coverage Ratio (using (A) Consolidated Funded Debt and
Consolidated Senior Funded Debt as of the Certificate Date, (B) pro
forma Consolidated EBITDA for the four consecutive fiscal quarters ended
December 31, 2000 and (C) pro forma Consolidated Interest Expense for
the four consecutive fiscal quarters ended December 31, 2000, and taking
into account (x) any Asset Dispositions completed by the Borrower and
its Subsidiaries during the period following December 31, 2000 and
ending on the Certificate Date, and (y) the making of mandatory
prepayments of Loans under the Credit Agreement and the Sixth Amendment
in connection therewith), and such pro forma calculation of the Leverage
Ratio and the Senior Leverage Ratio shall be no greater than 6.00:1.00
and 3.75:1.00, respectively, and such pro forma calculation of the
Interest Coverage Ratio shall be no less than 1.75:1.00; and
(c) the Borrower shall be required to be in compliance with
Sections 7.1(a), 7.1(b) and 7.2 as provided in the terms of the Credit
Agreement, as in effect immediately prior to the effectiveness of the
Fifth Amendment, during all periods from and after the Certificate Date.
The failure of the Borrower to be in full and timely compliance with clauses (b)
and (c) of this Section 1.1 shall be an immediate Event of Default under the
Credit Documents.
1.2 APPLICABLE MARGIN PERCENTAGE. During the period from the Effective
Date to but not including the Certificate Date only, the Applicable Margin
Percentage for Base Rate Term and Revolving Loans shall be 2.500% and the
Applicable Margin Percentage for LIBOR Term and Revolving Loans shall be 3.500%.
As of the Certificate Date, in the event the certificate required by Section 1.1
is timely delivered and the ratios calculated in the certificate comply with the
requirements set forth in Section 1.1(b) above, the Applicable Margin Percentage
for Base Rate Term and Revolving Loans and the Applicable Margin Percentage for
LIBOR Term and Revolving Loans shall be determined under the definition of
"Applicable Margin Percentage" as in effect immediately prior to the effective
date of the Fifth Amendment (it being understood that (i) in such event, such
reduction in pricing shall be deemed to take effect only as of the Certificate
Date and shall not be retroactive, and (ii) in the event that a certificate
complying with the requirements set forth in Section 1.1(b) above is not
supplied by April 15, 2001, then the Loans shall bear interest as provided in
Section 2.8(b) of the Credit Agreement).
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1.3 SALE OF SPORTS ASSETS. The Borrower and the Required Lenders hereby
amend the terms of their agreement with respect to the SuperSonics Sale (as
defined in the Sixth Amendment) by restating Section 1.3 of the Sixth Amendment,
as follows:
The Required Lenders agree that the Borrower may sell the
Seattle SuperSonics sports franchise and other sports entertainment
assets to be approved by the Administrative Agent (the "SuperSonics
Sale") for an amount which will provide gross cash proceeds to the
Borrower, prior to April 15, 2001, of not less than $200,000,000, which
amount shall be calculated before taking into account (i) normal and
customary prorations and associated liabilities allocated to the
Borrower as seller, and (ii) customary transaction costs and expenses of
Borrower as seller, on terms and conditions to be approved by the
Administrative Agent; provided that after effecting such sale, the
Borrower shall be in compliance with all terms of the Credit Documents
and no Default or Event of Default shall have occurred. This Section 1.3
shall be deemed a consent by the Required Lenders to such sale (subject
to the approvals of the Administrative Agent of the matters required
hereby) for purposes of Section 8.4 of the Credit Agreement. Subject to
the provisions of clause (vi) of Section 2.19(a) (as implemented in this
Seventh Amendment), the Borrower hereby agrees to apply the entire Net
Cash Proceeds (as defined in the Credit Agreement, except that for
purposes of the SuperSonics Sale only, income tax and transfer taxes
under clause (iii)(z) of such definition shall not be deducted in the
calculation of Net Cash Proceeds) upon closing of the sale (x) first, to
prepayment of the Term Loans as required by Section 2.6(h) of the Credit
Agreement, until all Term Loans are repaid in full, (y) then, to
prepayment of the Revolving Loans made in respect of any Revolver
Increase theretofore implemented, until all such Revolving Loans are
repaid in full and (z) then, to prepayment of all other Revolving Loans,
until all Revolving Loans are repaid in full, with a corresponding
reduction of the Revolving Credit Commitments as provided in Section
2.6(h) of the Credit Agreement; provided that, as contemplated by
Section 2.6(f) of the Credit Agreement, the Revolving Credit Commitments
shall not be reduced pursuant to clause (ii) above below $75,000,000
even if all the Revolving Loans are prepaid in full pursuant to such
clause. The parties acknowledge that, as of the date hereof, the
delayed-draw Unutilized Term Loan Commitments under the Third Amendment
equal $5,000,000.
1.4 REVOLVER INCREASE. (a) As of the Effective Date, Section 2.19(a) of
the Credit Agreement is hereby amended by adding thereto the following clause
(vi):
(vi) In the event the Borrower (a) effects Borrowings
pursuant to the Revolver Increase and (b) subsequently receives
any Net Cash Proceeds in connection with the SuperSonics Sale,
then notwithstanding the prepayment requirements of Sections
2.6(f) and 2.6(h), and prior to the application of Net Cash
Proceeds thereunder, the Borrower shall apply such Net Cash
Proceeds (provided that for purposes of the SuperSonics Sale
only, income tax and transfer taxes under clause (iii)(z) of the
definition of "Net Cash Proceeds" shall not be deducted in
calculated Net Cash Proceeds) to prepayment of Revolving Loans
borrowed pursuant to the Revolver Increase, with a corresponding
permanent reduction in the Revolver Increase.
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(b) Clause (i) of Section 4.3(a) is hereby deleted in its entirety and
is replaced with the following:
(i) For each Lender participating in the Revolver Increase,
(A) an amended and restated Revolving Note in the amount of such
Lender's revised Revolving Credit Commitment (after giving
effect to such Lender's share of the Revolver Increase) or (B) a
supplemental Revolving Note in the amount of such Lender's share
of the Revolver Increase; and for each lender who becomes a
Lender hereunder pursuant to a Lender Addition and
Acknowledgment Agreement, a new Revolving Note in the amount of
such Lender's Revolving Credit Commitment, in each case duly
executed by the Borrower; and
(c) The Borrower hereby confirms that it intends to effect a Revolver
Increase of $20,000,000 prior to the consummation of the SuperSonics Sale. The
commitment to make Revolving Loans pursuant to the Revolver Increase will be
borne initially by First Union National Bank (whose Revolving Credit Commitment
will at such time be increased by an amount equal to $20,000,000), which entity
will subsequently enter into one or more Assignment and Acceptances with other
Lenders that are willing to participate in the Revolver Increase. The parties
agree, for purposes of such assignments with respect to the Revolver Increase
contemplated hereby only, that the minimum amount of any assignment (as
prescribed by clause (a)(ii) of Section 11.7 of the Credit Agreement) shall be
$500,000.
1.5 CAPITAL EXPENDITURES. The text of Section 7.5 of the Credit
Agreement is hereby deleted in its entirety and is replaced with the following:
The Borrower and its Subsidiaries will not make Capital
Expenditures in the aggregate in excess of $50,000,000 during
the period beginning January 1, 2000 through the fiscal quarter
ending June 30, 2001.
In addition, the Required Lenders hereby waive any Event of Default arising as
of December 31, 2000 under Section 7.5 of the Credit Agreement.
1.6 BUDGET REQUIREMENT. The Required Lenders hereby defer (on a one-time
basis only) to March 31, 2001 the requirement (as set forth in Section 6.2(c) of
the Credit Agreement) that the Borrower deliver to the Lenders its consolidated
operating budget for the Borrower and its Subsidiaries for the fiscal year
ending December 31, 2001.
1.7 XXXXXX MEDIA. The Required Lenders hereby consent to the Borrower's
acquisition of Xxxxxx Media LLC (which acquisition was consummated during the
fiscal quarter ended December 31, 2000) and further waive any Event of Default
occasioned thereby under Section 6.9 of the Credit Agreement.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower hereby certifies and warrants to the Administrative Agent
and the Lenders that, after giving effect to the amendments and waivers effected
hereby, (i) each of the representations and warranties contained in Article V of
the Credit Agreement and in the other Credit Documents are true and correct as
of the Effective Date with the same effect as though made on the date hereof
(except to the extent any such representation or warranty is expressly stated to
have been made as of a specific date, in which case such representation or
warranty shall be true and correct as of such specified date), and (ii) no
Default or Event of Default shall have occurred and be continuing on the
Effective Date.
ARTICLE III
GENERAL
3. EFFECT OF WAIVERS AND AMENDMENTS. From and after the Effective Date,
all references to the Credit Agreement set forth in any other Credit Document or
other agreement or instrument shall, unless otherwise specifically provided, be
references to the Credit Agreement as amended by this Seventh Amendment and as
may be further amended, modified, restated or supplemented from time to time.
This Seventh Amendment is limited as specified and shall not constitute or be
deemed to constitute an amendment, modification or waiver of any provision of
the Credit Agreement except as expressly set forth in Articles I and II hereof.
Except as expressly amended hereby, the Credit Agreement shall remain in full
force and effect in accordance with its terms.
3.1 APPLICABLE LAW. This Amendment shall be governed by and construed in
accordance with the internal laws and judicial decisions of the State of North
Carolina.
3.2 COUNTERPARTS. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
3.3 EXPENSES. The Borrower agrees to pay all reasonable out-of-pocket
expenses incurred by the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including without
limitation all reasonable attorneys' fees.
3.4 FURTHER ASSURANCES. The Borrower shall execute and deliver to
Administrative Agent such documents, certificates and opinions as the
Administrative Agent may reasonably request to effect the amendment contemplated
by this Amendment and to continue the existence, perfection and first priority
of the Administrative Agent's security interests in the Collateral.
3.5 HEADINGS. The headings of this Amendment are for the purposes of
reference only and shall not affect the construction of this Amendment.
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3.7 EFFECTIVENESS. This Amendment shall become effective (the date the
following conditions are first satisfied being the "Effective Date") upon (i)
the execution of a counterpart hereof by the Borrower, the Administrative Agent
and the Required Lenders, (ii) the execution of the Acknowledgement of Guaranty
attached hereto by each of the Guarantors, (iii) the execution by the Borrower
of a fee letter agreement with the Administrative Agent, satisfactory in form
and substance to the Administrative Agent (the "Seventh Amendment Fee Letter"),
(iv) receipt by the Administrative Agent of such executed counterparts,
acknowledgement and Seventh Amendment Fee Letter, and (v) receipt by the
Administrative Agent of the fees required to be paid as of the consummation of
this Amendment pursuant to the Seventh Amendment Fee Letter.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized officers all as of the date
first above written.
THE XXXXXXXX GROUP, INC.
By:
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Name:
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Title:
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(signatures continued)
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FIRST UNION NATIONAL BANK,
as Administrative Agent and as a Lender
By:
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Name:
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Title:
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(signatures continued)
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FLEET BANK, N.A.,
as Documentation Agent and a Lender
By:
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Name:
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Title:
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(signatures continued)
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KEYBANK NATIONAL ASSOCIATION,
as Co-Agent and as a Lender
By:
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Name:
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Title:
---------------------------------
(signatures continued)
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U.S. BANK NATIONAL ASSOCIATION
By:
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Name:
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Title:
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(signatures continued)
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BANK OF AMERICA, N.A.
By:
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Name:
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Title:
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(signatures continued)
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XXX XXXX XX XXXX XXXXXX
By:
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Name:
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Title:
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(signatures continued)
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DRESDNER BANK AG, NEW YORK &
GRAND CAYMAN BRANCHES
By:
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Name:
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Title:
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By:
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Name:
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Title:
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(signatures continued)
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THE CIT GROUP/EQUIPMENT FINANCING, INC.
By:
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Name:
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Title:
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(signatures continued)
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BNP PARIBAS
By:
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Name:
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Title:
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By:
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Name:
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Title:
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(signatures continued)
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FIRST HAWAIIAN BANK
By:
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Name:
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Title:
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(signatures continued)
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CITIZENS BANK OF MASSACHUSETTS
By:
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Name:
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Title:
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(signatures continued)
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CREDIT INDUSTRIEL ET COMMERCIAL
By:
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Name:
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Title:
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By:
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Name:
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Title:
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(signatures continued)
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MICHIGAN NATIONAL BANK
By:
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Name:
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Title:
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(signatures continued)
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WASHINGTON MUTUAL BANK
(DBA WESTERN BANK)
By:
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Name:
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Title:
---------------------------------
(signatures continued)
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NATEXIS BANQUE
By:
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Name:
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Title:
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By:
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Name:
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Title:
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ACKNOWLEDGEMENT OF GUARANTY
Each of the undersigned, as a guarantor of the Obligations of The
Xxxxxxxx Group, Inc. (the "Company") under the Credit Agreement, dated as of
January 22, 1999, among the Company, certain financial institutions party
thereto, First Union National Bank, in its capacity as administrative agent,
Fleet Bank, N.A., in its capacity as documentation agent, and KeyBank National
Association, as Co-Agent (as amended, the "Credit Agreement"), hereby consents
to the foregoing Seventh Amendment to Credit Agreement, and further waives any
defense to its guaranty liability occasioned by such amendment. The foregoing
consent and waiver of the undersigned is made as of effective date of the date
of the Seventh Amendment.
XXXXXXXX MEDIA GROUP, INC. XXXXXXXX COMMUNICATIONS OF
MASSACHUSETTS, INC.
By: By:
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Name: Name:
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Title: Title:
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KVOS TV, LTD. CENTRAL NY NEWS, INC.
By: By:
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Name: Name:
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Title: Title:
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AK FLORIDA OUTDOOR, INC. TC AVIATION, INC.
By: By:
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Name: Name:
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Title: Title:
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XXXXXXXX INTERACTIVE MEDIA, INC. AK MOBILE TELEVISION, INC.
By: By:
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Name: Name:
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Title: Title:
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XXXXXXXX VENTURES, INC. XXXXXXXX BROADCASTING FRESNO, LLC
By: By:
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Name: Name:
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Title: Title:
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IKNOW BAKERSFIELD, LLC
By: Xxxxxxxx Interactive, Inc.
Its: Sole Member
By:
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Name:
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Title:
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