AMENDEMENT XX. 0
Xxxxxxxxx Xx. 0 (this "Amendment"), dated as of May 12, 1999, 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. Paragraph (a) of the definition of "Applicable Margin" contained in
Section 1.1(b) of the Credit Agreement is amended by adding the following at the
end thereof:
During the period commencing on May 12, 1999 and ending on the last date
that the Compliance Certificate in respect of the fiscal quarter ended
March 31, 1999 is due (but not overdue) in accordance with Section 7.7(d),
(i) with respect to Revolving Credit Eurodollar Advances, Term Loan
Eurodollar Advances and the Letter of Credit Fee, 2.5 00%, (ii) with
respect to the Commitment Fee, 0.375%, and (iii) with respect to all ABR
Advances, 0.5 00%.
2. Paragraphs (b) and (c) of the definition of "Applicable Margin"
contained in Section 1.1(b) of the Credit Agreement are amended and restated in
their entirety as follows:
(b) Except as otherwise provided in paragraph (a) above, at all times
during which the applicable period set forth below is in effect: (i) with
respect to Revolving Credit Eurodollar Advances and Term Loan Eurodollar
Advances, the applicable margin set forth below under the heading
"Eurodollar", (ii) with respect to ABR Advances, the applicable margin set
forth below under the heading "ABR", (iii) with respect to the Commitment
Fee, the applicable margin set forth below under the heading
"CommitmentFee", and (iv) with respect to the Letter of Credit Fee, the
applicable margin set forth below under the heading "LC Fee":
When the Commitment
Leverage Ratio is: Eurodollar ABR Fee LC Fee
---------------------------------------------------------------------------
> 4.00 3.00% 0.50% 0.500% 3.00%
> 3.75 <4.00 2.75% 0.50% 0.500% 2.75%
> 3.30 <3.75 2.50% 0.50% 0.375% 2.50%
> 3.00 <3.30 2.00% 0.00% 0.375% 2.00%
> 2.50 <3.00 1.75% 0.00% 0.375% 1.75%
> 2.00 <2.50 1.50% 0.00% 0.375% 1.50%
> 1.25 <2.00 1.25% (1.00%) 0.250% 1.25%
<1.25 1.00% (1.00%) 0.250% 1.00%
(c) Changes in the Applicable Margin resulting from a change in the
Leverage Ratio shall become effective on the last date upon which the Compliance
Certificate with respect to each fiscal quarter is due (but not overdue)
pursuant to Section 7.7(d).
3. The definition of "Adjusted EBITDA" contained in Section 1.1(b) of the
Credit Agreement is deleted in its entirety.
4. The definition of "Capital Expenditure" contained in Section 1.1(b) of
the Credit Agreement is amended and restated in its entirety as follows:
"Capital Expenditures": shall mean, with respect to any Person for any
period, (a) the aggregate of all expenditures incurred by such Person during
that period which, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected in the
statement of cash flows of such Person (other than the portion of the purchase
price of any Operating Entity which, under GAAP, would be recorded as such
additions), plus (b) for purposes of Section 8.6 only, on and after July 1,
1999. the fair market value of Property subject to an operating lease determined
as of the time such Person enters into or renews the operating lease.
Notwithstanding anything in this definition to the contrary, "Capital
Expenditure" 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.
5. The definition of "Fixed Charge Coverage Ratio" contained in Section
1.1(b) of the Credit Agreement is amended by deleting the word "Adjusted" in
each place it appears therein.
6. Clause (d) of the first sentence of the definition of "Fixed Charges"
contained in Section 1.1(b) of the Credit Agreement is amended and restated in
its entirety as follows:
(d) all income taxes paid by the Borrower and the Subsidiaries during
such period net of all tax refunds received by the Borrower and the
Subsidiaries during such period.
7. Section 2.4(i) of the Credit Agreement is amended and restated in its
entirety as follows:
(i) in the case of Revolving Credit Loans (x) through May 15, 1999,
(a) for general working capital purposes, (b) up to $10,000,000 in
aggregate principal amount, for Additional Permitted Acquisitions, and
(c) to pay fees and expenses in connection with the Merger, and (y)
thereafter, for general working capital purposes, and
8. Section 3.4(a) of the Credit Agreement is amended by deleting the phrase
"minus 1.00%" appearing therein and inserting in its place the phrase "plus the
Applicable Margin".
9. 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
March31, 1998 3.00:1.00
April 1, 1998 through
December31, 1998 3.30:1.00
January 1, 1999 through
March31, 1999 4.00:1.00
April 1, 1999 through
June 30, 1999 4.35:1.00
July 1, 1999 through
September 30, 1999 4.25:1.00
October 1, 1999 through
December31, 1999 4.00:1.00
January 1, 2000 through
March31,2000 3.50:1.00
April 1,2000 through
March 3l,2001 3.00:1.00
April 1,2001 through
March 31, 2002 2.50:1.00
April 1,2002
and thereafter 2.00:1.00
10. 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 less 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 and
thereafter 1.00:1.00
11. Section 7.13 of the Credit Agreement is amended and restated in its
entirety as follows:
7.13 Minimum Net Worth
At each fiscal quarter end during each period set forth below, have a
Net Worth equal to no less than the amount set forth below adjacent to such
period:
Period Net Worth
------ ---------
January 1, I999 through
March 31, 1999 $19,000,000
April 1, 1999 through
March 31, 2000 $18,500,000
April 1,2000 through
March 31, 2001 $19,000,000
April 1,2001 through
March 31, 2002 $19,500,000
April 1,2002 and
thereafter $20,000,000
For purposes of this Section 7.13, "Net Worth" shall mean, as of any date,
(i) all assets of the Borrower and the Subsidiaries on a Consolidated
basis, minus (ii) all liabilities of the Borrower and the Subsidiaries on a
Consolidated basis.
12. Section 8.4(e) of the Credit Agreement is deleted in its entirety.
13. Section 8.6(a) of the Credit Agreement is amended by replacing all of
the text thereof following the amount "$8,000,000" appearing therein
with the following:
(y) in respect of the fiscal year ending June 30, 1999. $1 0.000,000, and
(z) in respect of each fiscal year ending after June 30, 1999, the sum
of $6.000,000 plus, for purposes of this clause (z) only, the net cash
proceeds, if any, received by the Borrower and the Subsidiaries during
such fiscal year arising out of equipment dispositions by the Borrower
and the Subsidiaries.
14. Paragraphs 1 - 13 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.
15. 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, immediately after giving effect to
this Amendment, 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.
16. 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.
17. 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.
18. 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. 2
VIDEO SERVICES CREDIT AGREEMENT
VIDEO SERVICES CORPORATION
By:/s/Xxxxxx X Xxxxx
Name:Xxxxxx X. Xxxxx
Title:Vice President & CFO
VSC MAL CORP.
By:/s/Xxxxxx X Xxxxx
Name:Xxxxxx X. Xxxxx
Title:Vice President & CFO
AMENDMENT NO. 2
VIDEO SERVICES CREDIT AGREEMENT
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/J Xxxxxxx Xxxxxxx
Name:J Xxxxxxx Xxxxxxx
Title:Vice President
