Exhibit 10.64
AMENDMENT NO.3
TO
FINANCING AGREEMENT
This AMENDMENT NO.3 TO FINANCING AGREEMENT (this "Amendment"), made as of
December 31, 2001, between U.S. BANK NATIONAL ASSOCIATION (formerly known as
Firstar Bank, National Association), a national banking association ("Bank")
and VARI-LITE, INC., a Delaware corporation ("Borrower"),
WITNESSETH:
WHEREAS, Borrower and Bank have entered into that certain Financing
Agreement, dated as of December 29, 2000, as amended by that certain Amendment
No.1 to Financing Agreement, dated as of March 30, 2001, and Amendment No.2 to
Financing Agreement, dated as of June 30, 2001 (as so amended, the "Financing
Agreement"), pursuant to which Bank has made certain loans and financial
accommodations available to Borrower; and
WHEREAS, Borrower and Bank desire to further amend the Financing
Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Bank and Borrower agree as follows:
1. DEFINED TERMS.
Each defined term used herein and not otherwise defined herein has the
meaning ascribed to such term in the Financing Agreement.
2. AMENDMENT TO FINANCING AGREEMENT.
The Financing Agreement is amended, effective as of the date of this
Agreement, as follows:
AMENDMENT TO EXHIBIT J. Exhibit J to the Financing Agreement is amended in
its entirety to read as set forth on Exhibit J attached hereto and by
reference made a part hereof.
3. REPRESENTATIONS AND WARRANTIES.
Borrower represents and warrants to Bank as follows:
3.1 THE AMENDMENT. This Amendment has been duly and validly executed by
an authorized executive officer of Borrower and constitutes the legal, valid
and binding obligation of Borrower enforceable against Borrower in accordance
with its terms.
3.2 FINANCING AGREEMENT. The Financing Agreement as amended by this
Amendment remains in full force and effect and remains the valid and binding
obligation of
Borrower enforceable against Borrower in accordance with its terms. Borrower
hereby ratifies and confirms the Financing Agreement as amended by this
Amendment.
3.3 NONWAIVER. Neither the execution, delivery, performance or
effectiveness of this Amendment shall operate nor be deemed to be nor
construed as a waiver (i) of any right, power or remedy of Bank under the
Financing Agreement, nor (ii) of any term, provision, representation,
warranty or covenant contained in the Financing Agreement or any other
documentation executed in connection therewith. Further, none of the
provisions of this Amendment shall constitute, or be deemed to be or
construed as, a waiver of any Event of Default under the Financing Agreement
as amended by this Amendment.
3.4 REFERENCE TO AND EFFECT ON THE FINANCING AGREEMENT. Upon the
effectiveness of this Amendment, each reference in the Financing Agreement to
"this Agreement", "hereunder", "hereof", "herein", or words of like import
shall mean and be a reference to the Financing Agreement as amended hereby,
and each reference to the Financing Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the
Financing Agreement shall mean and be a reference to the Financing Agreement
as amended hereby.
3.5 CLAIMS AND DEFENSES. As of the date of this Amendment, Borrower has
no defenses, claims, counterclaims or setoffs with respect to the Financing
Agreement or its Obligations thereunder or with respect to any actions of the
Bank or any of its officers, directors, shareholders, employees, agents or
attorneys, and Borrower irrevocably and absolutely waives any such defenses,
claims, counterclaims and setoffs and releases the Bank and each of its
officers, directors, shareholders, employees, agents and attorneys from the
same.
4. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT NO.3
In addition to all of the other conditions and agreements set forth
herein, the effectiveness of this Amendment is subject to the each of the
following conditions precedent:
4.1 AMENDMENT NO. 3 TO FINANCING AGREEMENT. Bank shall have received an
original counterpart of this Amendment No.3to Financing Agreement, executed
and delivered by a duly authorized officer of Borrower.
4.2 ACKNOWLEDGMENT OF GUARANTOR. Bank shall have received an original
of the attached Acknowledgment of Vari-Lite International, Inc., a Delaware
corporation, executed and delivered by a duly authorized officer of Vari-Lite
International, Inc.
4.3 NO MATERIAL ADVERSE CHANGE. There shall have occurred no material
and adverse change in the Borrower's assets, liabilities or financial
condition since the date of the last Financials delivered by Borrower to Bank
nor shall there have been any material damage to or loss of any of Borrower's
assets or properties since such date.
4.4 AMENDMENT FEE. Borrower shall have paid Bank an amendment fee in an
amount of Twenty Thousand Dollars ($20,000.00).
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5. SECTION MISCELLANEOUS.
5.1 GOVERNING LAW. This Amendment has been delivered and accepted at
and shall be deemed to have been made at Cleveland, Ohio. This Amendment
shall be interpreted and the rights and liabilities of the parties hereto
determined in accordance with the laws of the State of Ohio, without regard
to principles of conflict of law, and all other laws of mandatory application.
5.2 SEVERABILITY. Each provision of this Amendment shall be interpreted
in such manner as to be valid under applicable law, but if any provision
hereof shall be invalid under applicable law, such provision shall be
ineffective to the extent of such invalidity, without invalidating the
remainder of such provision or the remaining provisions hereof.
5.3 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which, when taken together, shall constitute but one
and the same agreement.
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IN WITNESS WHEREOF, Borrower has caused this Amendment No.3 to Financing
Agreement to be duly executed and delivered by its duly authorized officer as
of the date first above written.
Signed and acknowledged VARI-LITE, INC.
in the presence of:
By:
------------------------- ---------------------------
Name:
--------------------
Its:
------------------------- --------------------------
Name:
--------------------
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STATE OF )
) ss:
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of
December, 2001, by _______________, the ___________________ of Vari-Lite,
Inc., a Delaware corporation, on behalf of the corporation.
----------------------------------
Notary Public
Accepted at Cleveland, Ohio,
Effective as of December 31, 2001.
U.S. BANK NATIONAL ASSOCIATION
By:
---------------------------
Its:
--------------------------
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ACKNOWLEDGMENT OF GUARANTOR
The undersigned, Vari-Lite International, Inc., a Delaware corporation,
having guaranteed all of the obligations of Vari-Lite, Inc. to U.S. Bank
National Association (formerly known as Firstar Bank, National Association)
("Bank"), hereby acknowledges and agrees, effective as of December 31, 2001,
to the terms of the foregoing Amendment No.3 to Financing Agreement. The
undersigned represents and warrants to Bank that the Guaranty executed and
delivered by the undersigned to Bank, dated as of December 29, 2000, remains
the valid and binding obligation of the undersigned, enforceable against it
in accordance with its terms.
VARI-LITE INTERNATIONAL, INC.
By:
---------------------------
Its:
--------------------------
STATE OF ___________________ )
)ss:
COUNTY OF __________________ )
The foregoing instrument was acknowledged before me this ___ day of
August, 2001, by ___________________, the ________________ of VARI-LITE
INTERNATIONAL, INC., a Delaware corporation, on behalf of the company.
------------------------------
Notary Public
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EXHIBIT J
FINANCIAL COVENANTS
FINANCIAL COVENANTS. Borrower agrees that it shall:
(A) NET CAPITAL EXPENDITURES. Not make nor permit International to make
Net Capital Expenditures in an aggregate amount exceeding $6,000,000 for
any fiscal year.
(B) EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION. Not permit
International's Earnings Before Interest, Taxes, Depreciation and
Amortization ("EBITDA") to be less than the following amounts for the
following periods:
EBIDTA PERIOD
------ ------
$2,931,000 10/01/00 - 12/31/00
$6,234,000 10/01/00 - 03/31/01
$7,461,000 10/01/00 - 06/30/01
$9,491,000 10/01/00 - 09/30/01
$7,650,000 01/01/01 - 12/31/01
$7,700,000 04/01/01 - 03/31/02
$9,550,000 07/01/01 - 06/30/02
$10,600,000 10/01/01 - 09/30/02
$16,314,000 01/01/02 - 12/31/02
$16,882,000 04/01/02 - 03/31/03
$17,385,000 07/01/02 - 06/30/03
$18,123,000 10/01/02 - 09/30/03
(C) NET WORTH. Not permit International's Net Worth to be less than the
following amounts as of the following dates:
Net Date Period
-------- ------
$45,000,000 12/31/00
$45,000,000 03/31/01
$45,000,000 06/30/01
$44,600,000 09/30/01
$44,000,000 12/31/01
$44,000,000 03/31/02
$44,000,000 06/30/02
$44,000,000 09/30/02
$47,750,000 12/31/02
$47,750,000 03/31/03
$47,750,000 06/30/03
$47,750,000 09/30/03
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(D) MAXIMUM DEBT. Not permit International's Total Funded Indebtedness to
exceed the following amounts at any time during the following periods:
Total Funded Indebtedness Period
------------------------- ------
$29,000,000 01/01/01 - 06/30/01
$27,000,000 07/01/01 - 09/30/01
$25,000,000 10/01/01 - 12/31/01
$25,000,000 01/01/02 - 03/31/02
$25,000,000 04/01/02 - 06/30/02
$25,000,000 07/01/02 - 09/30/02
$25,000,000 10/01/02 - 12/31/02
$27,000,000 01/01/03 - 03/31/03
$27,000,000 04/01/03 - 06/30/03
$27,000,000 07/01/03 - 09/30/03
$27,000,000 at any time thereafter
(E) LEVERAGE RATIO. Not permit International's Leverage Ratio to exceed the
following ratios as of the following dates:
Leverage Ratio Date
-------------- ----
4.65 to 1 03/31/01
3.23 to 1 06/30/01
2.56 to 1 09/30/01
2.90 to 1 12/31/01
2.80 to 1 03/31/02
2.30 to 1 06/30/02
2.05 to 1 09/30/02
1.80 to 1 12/31/02
1.75 to 1 03/31/03
1.65 to 1 06/30/03
1.65 to 1 09/30/03
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(F) TOTAL DEBT SERVICE RATIO. Not permit International's Total Debt Service
Ratio to be less than the following ratios as of the following dates:
Total Debt Service Ratio Date
------------------------ ----
0.61 to 1 09/30/01
0.60 to 1 12/31/01
0.70 to 1 03/31/02
0.90 to 1 06/30/02
1.00 to 1 09/30/02
1.20 to 1 12/31/02
1.20 to 1 03/31/03
1.20 to 1 06/30/03
1.20 to 1 09/30/03
II. Definitions
(A) The term "NET CAPITAL EXPENDITURES" for purposes of this Exhibit J
shall mean the sum of (a) International's consolidated capital
expenditures (including, but not by way of limitation, expenditures
for fixed assets or leases capitalized or required to be capitalized
on International's consolidated books by purchase, lease-purchase
agreement, option or otherwise), minus (b) the net book value of
capital assets previously sold and replaced by such capital
expenditures.
(B) The term "EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND
AMORTIZATION" or "EBITDA" for purposes of this Exhibit J shall mean
International's consolidated earnings from operations before income
taxes and interest income or expense plus depreciation, plus
amortization of all non-cash charges, all as determined in accordance
with generally accepted accounting principles, and shall not include
any gains or losses from the sale of assets outside the normal course
of business or any other extraordinary accounting adjustments or
non-recurring items of income or loss.
(C) The term "NET WORTH" for purposes of this Exhibit J shall mean the
total of International's consolidated shareholders equity, as
determined in accordance with generally accepted accounting principles,
consistently applied.
(D) The term "TOTAL FUNDED INDEBTEDNESS" for purposes of this Exhibit J
shall have the meaning and be determined in accordance with generally
accepted accounting principles consistently applied by International
on a consolidated basis in accordance with past practices.
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(E) The term "LEVERAGE RATIO" for purposes of this EXHIBIT J shall mean:
1. AS OF 03/31/01, the ratio of Total Funded Indebtedness as of such
date to EBITDA as measured from 10/01/00 to 03/31/01;
2. AS OF 06/30/01, the ratio of Total Funded Indebtedness as of such
date to EBITDA as measured from 10/01/00 to 06/30/01;
3. AS OF 09/30/01, the ratio of Total Funded Indebtedness as of such
date to EBITDA as measured from 10/01/00 to 09/30/01; and
4. AS OF 12/31/01 AND AS OF THE LAST DAY OF ANY FISCAL QUARTER
THEREAFTER, the ratio of Total Funded Indebtedness as of such date to
EBITDA as measured on a four quarter trailing basis.
(F) The term "UNFUNDED CAPITAL EXPENDITURE PAYMENTS" for purposes of
this EXHIBIT J shall mean the amount of consolidated capital
expenditures of International which are not financed under the CapEx
Facility nor any other financing arrangement with any other person.
(G) The term "TOTAL DEBT SERVICE RATIO" for purposes of this EXHIBIT J
shall mean:
1. FOR THE PERIOD COMMENCING ON THE 07/01/01 AND ENDING ON 09/30/01,
the ratio of (a) EBITDA as measured from 01/01/01 to 09/30/01 to (b)
the SUM of (i) the total consolidated and regularly scheduled
principal and interest payments of Total Funded Indebtedness for the
period 01/01/01 to 09/30/01, PLUS (ii) Unfunded Capital Expenditure
Payments for the period 01/01/01 to 09/30/01, MINUS (iii) the
US $1,000,000 Japanese principal payment paid by Vari-Lite Asia, Inc.
in March, 2001;
2. FOR THE PERIOD COMMENCING ON THE 10/01/01 AND ENDING ON 12/31/01,
the ratio of (a) EBITDA as measured on a four quarter trailing basis
to (b) the SUM of (i) the total consolidated and regularly scheduled
principal and interest payments of Total Funded Indebtedness for such
four quarter trailing period, PLUS (ii) Unfunded Capital Expenditure
Payments for such four quarter trailing period, MINUS (iii) the
US $1,000,000 Japanese principal payment paid by Vari-Lite Asia, Inc.
in March, 2001, PLUS (iv) the amount of taxes paid by International
on a consolidated basis during such four quarter trailing period,
MINUS (v) the amount of Japanese taxes paid by Vari-Lite Asia, Inc. in
February, 2001; and
3. FOR ALL PERIODS AFTER 12/31/01, the ratio of (a) EBITDA as measured
on a four quarter trailing basis to (b) the SUM of (i) the total
consolidated and regularly scheduled principal and interest payments
of Total Funded Indebtedness for such four quarter trailing period,
PLUS (ii) Unfunded Capital Expenditure Payments for such four quarter
trailing period, PLUS (iii) the amount of taxes paid by International
on a consolidated basis during such four quarter trailing period.
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