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EXHIBIT 10.42
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as
of March 1, 1999 by and among ACME TELEVISION, LLC, a Delaware limited liability
company (the "Borrower"); CIBC INC., UNION BANK OF CALIFORNIA, N.A., BANK OF
MONTREAL, CHICAGO BRANCH, and NATIONSBANK, N.A. as Lenders under the Credit
Agreement referred to below (the "Lenders"); and CANADIAN IMPERIAL BANK OF
COMMERCE, as Agent (the "Agent") for the Lenders and such other financial
institutions as are or as become Lenders under, and as defined in the Credit
Agreement referred to below.
RECITALS
A. The Borrower, the Lenders and the Agent are parties to a First
Amended and Restated Credit Agreement dated as of December 2, 1997, as
previously amended by Amendment No. 1 and Amendment No. 2, each dated as of June
30, 1998 (as so amended, the "Credit Agreement"). Capitalized terms used herein
without definition have the meanings assigned to them in the Credit Agreement,
unless otherwise provided.
B. The Borrower wishes to enter into various agreements providing for
the following:
(1) the purchase from Ramar Communications II, Ltd. ("Ramar") for
$25,000,000 (with an initial deposit of $500,000) of KASY-TV (the "KASY
Acquisition") licensed to Albuquerque, New Mexico ("KASY"), which is
currently subject to an LMA in favor of Xxx Enterprises (the "Xxx LMA")
and broadcasts as a UPN affiliate;
(2) the sale to Ramar, in a related transaction, of KWBQ-TV (the
"KWBQ Sale") licensed to Santa Fe, New Mexico ("KWBQ") for $100,000,
simultaneously with the grant by Ramar to Montecito Broadcasting
Corporation (a corporation wholly owned by Xxxx Xxxxx, Xxx Xxxxx and
Xxxxx Xxxxxxx) ("Montecito") of an option to repurchase KWBQ for
$100,000 (the "KWBQ Buy-Back Option"), which option will be assigned to
the Borrower; and
(3) an LMA between Ramar and the Borrower pursuant to which the
Borrower will program KWBQ (the "KWBQ LMA") and will pay Ramar an annual
fee of $350,000 for five years, with payments to be accelerated if the
KWBQ Buy-Back Option is exercised.
C. The Borrower wishes to obtain the consent of the Required Lenders to
the foregoing transactions (the "Transactions") and to certain related financial
covenant amendments. Subject to certain terms and conditions set forth herein,
the Agent and the Required Lenders are willing to agree to such request.
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NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
I. AMENDMENTS TO CREDIT AGREEMENT. Subject to the satisfaction of each of the
conditions set forth in SECTION V (and solely in the case of the amendment to
SECTION 5.03, the consummation of the Transactions), the Lenders hereby agree
with the Borrower that the Credit Agreement shall be amended as follows:
A. MINIMUM EBITDA. SECTION 5.01 of the Credit Agreement is hereby
amended for all periods after the date hereof to read in its entirety as
follows:
For each period four (4) fiscal quarters ending on and after March 31,
1999, maintain EBITDA of not less than the following amounts:
FOUR FISCAL
QUARTERS ENDING MINIMUM EBITDA
March 31, 1999 $ 9,000,000
June 30, 1999 $ 9,500,000
September 30, 1999 $10,500,000
December 31, 1999 $12,500,000
March 31, 2000 $12,500,000
June 30, 1999 $16,000,000
September 30, 1999 $20,000,000
December 31, 1999 $24,000,000
March 31, 2001 $24,000,000
June 30, 2001 $26,000,000
September 30, 2001 $28,000,000
December 31, 2001 $30,000,000
March 31, 2002 $30,000,000
June 30, 2002 $33,000,000
September 30, 2002 $36,000,000
B. MAXIMUM SECURED DEBT LEVERAGE. SECTION 5.03 of the Credit Agreement
is hereby amended for all periods after the date hereof to read in its entirety
as follows:
As of each Quarterly Date indicated below, maintain a ratio of Secured
Debt to Adjusted EBITDA for the period of four (4) fiscal quarters then ended as
follows:
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MAXIMUM RATIO OF SECURED
QUARTERLY DATE(S) DEBT TO ADJUSTED EBITDA
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March 31, 1999 and June 30, 1999 3.50:1.00
September 30, 1999 4.25:1.00
December 31, 1999 3.50:1.00
March 31, 2000 and thereafter 3.00:1.00
provided, however, that in the event that the Borrower's Permitted Acquisition
of KASY-TV is consummated after the delivery of the financial statements and
compliance report required to be provided under SECTION 6.05 for the fiscal
quarter ended June 30, 1999 but prior to the delivery of the financial
statements and compliance report required under such SECTION 6.05 for the fiscal
quarter ended September 30, 1999 (but in any event, no later than November 15,
1999), then the maximum permitted ratio of Secured Debt to Adjusted EBITDA
applicable as of the date of such consummation, for purposes of complying with
the conditions to such Permitted Acquisition and any Loans requested in
connection therewith, shall be 4.50:1.00.
C. NO FURTHER AMENDMENTS. Except as specifically amended or waived
hereby, the text of the Credit Agreement and all other Loan Documents shall
remain unchanged and in full force and effect.
II. CONSENTS TO TRANSACTIONS.
A. CONSENTS. Subject to the conditions set forth in SECTION II(B) below,
the Required Lenders hereby consent to (1) the execution and delivery of binding
agreements providing for the KASY Acquisition (which shall constitute a
"Permitted Acquisition" for all purposes of the Credit Agreement), the KWBQ Sale
and the KWBQ LMA (which shall constitute a "Permitted LMA" under the Credit
Agreement), as described in the Recitals to this Amendment and otherwise in a
manner reasonably satisfactory to the Required Lenders, and (2) the consummation
of such Transactions substantially in accordance with such agreements. In
addition, the Required Lenders hereby waive any requirement that the Notes be
repaid or the Commitments reduced from the net proceeds of the KWBQ Sale.
B. CONDITIONS TO CONSENTS. The foregoing consents are subject to the
following express conditions:
(1) The KWBQ Buy-Back Option shall be assigned to the Borrower
and collaterally assigned by the Borrower to the Agent and the Lenders
to secure the Obligations, with the written consent of all other parties
thereto.
(2) The Acquisition Documents relating to the KASY Acquisition
shall be collaterally assigned by the Borrower to the Agent and the
Lenders to secure the Obligations, with the written consent of all other
parties thereto, as required under SECTION 2.01 of the Credit Agreement.
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(3) The Borrower and its Subsidiaries shall satisfy all of the
conditions to Permitted Acquisitions set forth in the definition of such
term, after the first paragraph thereof in a timely manner unless
otherwise permitted by the Agent. Without limitation of the foregoing,
the Borrower shall deliver to the Agent a fully completed Acquisition
Compliance Checklist together with the Officer's Compliance Certificate
required to be delivered prior to or concurrently with the closing of
such Permitted Acquisition (see SCHEDULE 11.02(A) and EXHIBIT B
thereto).
(4) The Borrower shall have received at least $6,000,000 in
additional cash equity contributions, the proceeds of which shall be
applied to finance a portion of the KASY Acquisition.
(5) Any Loans requested in connection with the foregoing shall be
subject to the conditions applicable thereto set forth in ARTICLE II of
the Credit Agreement.
III. REFERENCES IN SECURITY DOCUMENTS; CONFIRMATION OF SECURITY.
All references to the "Credit Agreement" in all Security Documents, and
in any other Loan Documents shall, from and after the date hereof, refer to the
Credit Agreement, as amended by this Agreement, and all obligations of the
Borrower under the Credit Agreement, as amended, shall be secured by and be
entitled to the benefits of said Security Documents and such other Loan
Documents. All Security Documents heretofore executed by the Borrower and its
Subsidiaries shall remain in full force and effect and such Security Documents,
as amended hereby, are hereby ratified and affirmed.
IV. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BORROWER. The Borrower
hereby represents and warrants to, and covenants and agrees with, the Lenders
that:
A. The execution and delivery of this Agreement have been duly
authorized by all requisite corporate action on the part of the Borrower.
B. The representations and warranties contained in the Credit Agreement
and the other Loan Documents are true and correct in all material respects on
and as of the date of this Agreement as though made at and as of such date. No
material adverse change has occurred in the assets, liabilities, financial
condition, business or prospects of the Borrower and its Subsidiaries from that
disclosed in the financial statements most recently furnished to the Lenders. No
Default has occurred and is continuing.
C. Neither the Borrower nor any Affiliate of the Borrower is required to
obtain any consent, approval or authorization from, or to file any declaration
or statement with, any governmental instrumentality or other agency or any other
person or entity in connection with or as a condition to the execution, delivery
or performance of this Agreement or the other Loan Documents contemplated
hereby, if any (the "Documents").
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D. This Agreement and the other Documents constitute the legal, valid
and binding obligations of the Borrower and its Affiliates enforceable against
them, jointly and severally, in accordance with their respective terms, subject
to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting
the rights and remedies of creditors generally or the application of principles
of equity, whether in any action at law or proceeding in equity, and subject to
the availability of the remedy of specific performance or of any other equitable
remedy or relief to enforce any right thereunder.
E. The Borrower will satisfy all of the conditions set forth in SECTION
V. CONDITIONS. The willingness of the Agent and the Lenders to amend the Credit
Agreement and grant the foregoing consents, is subject to the following
conditions precedent and subsequent (in addition to the conditions set forth or
referred to in SECTION II above):
A. The Borrower shall have executed and delivered to the Agent (or shall
have caused to be executed and delivered to the Agent by the appropriate
persons) the following:
1. On or before the date hereof:
(a) This Agreement.
(b) True and complete copies of any required managers', members',
stockholders' and/or directors' consents and/or resolutions, authorizing
the execution and delivery of this Agreement and the other Documents
contemplated hereby, certified by the Manager or Secretary of the
appropriate Company, if needed.
2. Such other supporting documents and certificates as the Agent or its
counsel may reasonably request, within the time period(s) reasonably
designated by the Agent or its counsel.
B. All legal matters incident to the transactions hereby contemplated
shall be reasonably satisfactory to the Agent's counsel.
VI. MISCELLANEOUS.
A. As provided in the Credit Agreement, the Borrower agrees to reimburse
the Agent upon demand for all reasonable fees and disbursements of counsel to
the Agent incurred in connection with the preparation of this Agreement and the
other Documents.
B. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
C. This Agreement may be executed by the parties hereto in several
counterparts hereof and by the different parties hereto on separate counterparts
hereof, all of which counterparts shall together constitute one and the same
agreement. Delivery of an executed
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signature page of this Agreement by facsimile transmission shall be effective as
an in-hand delivery of an original executed counterpart hereof.
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IN WITNESS WHEREOF, the Agent, the Borrower and the Lenders have caused
this Agreement to be duly executed as a sealed instrument by their duly
authorized representatives, all as of the day and year first above written.
ACME TELEVISION, LLC
By /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: Executive Vice President and
Chief Financial Officer
CANADIAN IMPERIAL BANK OF
COMMERCE, AS AGENT
By /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Executive Director
CIBC Xxxxxxxxxxx Corp., as Agent
CIBC INC.
By /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Executive Director
CIBC Xxxxxxxxxxx Corp., as Agent
NATIONSBANK, N.A.
By /s/ Xxxxx Xxxxxxx
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Xxxxx Xxxxxxx, Vice President
UNION BANK OF CALIFORNIA, N.A.
By /s/ Xxxxxxxxx X. Xxxx
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Xxxxxxxxx Xxxx, Vice President
(signatures continued)
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BANK OF MONTREAL, CHICAGO BRANCH
By /s/ C.T. Young
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Xxxxxxxxxxx X. Xxxxx, Director
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JOINDER BY GUARANTORS
The undersigned hereby jointly and severally join in the execution of the
foregoing Third Amendment to Credit Agreement dated as of March 1, 1999 (the
"Agreement") to which this Joinder is attached to confirm their respective
consents to all of the transactions contemplated by the Agreement and all
agreements and instruments executed and delivered in connection therewith and
hereby jointly and severally reaffirm and ratify their respective Guarantees and
all agreements securing such Guarantees, all of which shall in all respects
remain in full force and effect and shall continue to guarantee any and all
indebtedness, obligations and liabilities of the Borrower to the Agent and the
Lenders, whether now existing or hereafter arising, on the same terms and
conditions as are set forth in their respective Guarantees.
ACME Television of Oregon, LLC
ACME Television Licenses of Oregon, LLC
ACME Television of Tennessee, LLC
ACME Television Licenses of Tennessee, LLC
ACME Television of Utah, LLC
ACME Television Licenses of Utah, LLC
ACME Television of New Mexico, LLC
ACME Television Licenses of New Mexico, LLC
ACME Subsidiary Holdings III, LLC
ACME Television of Missouri, Inc.
ACME Television Licenses of Missouri, LLC
ACME Television of Florida, LLC
ACME Television Licenses of Florida, LLC
By: /s/ Xxxxxx Xxxxx
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Duly authorized signatory as to all
