Exh. 10.7
EXECUTION COPY
SIXTH AMENDMENT, CONSENT AND AGREEMENT, dated as of January 29, 2001
(this "SIXTH AMENDMENT"), to the Credit Agreement dated as of October 28, 1997
(as heretofore amended, supplemented or otherwise modified, the "CREDIT
AGREEMENT"), among AUDIO VISUAL SERVICES CORPORATION, a Delaware corporation
(the "PARENT"), AUDIO VISUAL SERVICES (NY) CORPORATION, a New York corporation
(the "COMPANY"; together with the Parent, the "Borrowers"), the several banks
and other financial institutions from time to time parties thereto (the
"Lenders"), THE CHASE MANHATTAN BANK, as Administrative Agent for the Lenders
(in such capacity, the "ADMINISTRATIVE AGENT") and XXXXXXX XXXXX CAPITAL
CORPORATION, as Syndication Agent (in such capacity, the "SYNDICATION AGENT";
collectively with the Administrative Agent, the "AGENTS").
W I T N E S S E T H :
- - - - - - - - - - -
WHEREAS, the Borrowers, the Lenders and the Agents are parties to
the Credit Agreement, pursuant to which the Lenders have agreed to make, and
have made, certain loans and other extensions of credit to the Borrowers on the
terms and subject to the conditions thereof;
WHEREAS, the Company wishes to enter into a $16,000,000 secured
revolving credit facility with The Chase Manhattan Bank as administrative agent,
Chase Securities Inc, as arranger and the financial institutions listed therein
as lenders, to obtain additional working capital for its business (the "NEW
CREDIT AGREEMENT");
WHEREAS, it is a condition to the New Credit Agreement that the
Borrowers and certain Subsidiaries provide guarantees and first priority
security interests in those assets subject to the security interests created by
the Security Documents;
WHEREAS, the Master Guarantee Agreement, the Master Pledge Agreement
and the Master Security Agreement are to be amended and restated as a result of
corporate reorganizations undertaken by the Parent and its Subsidiaries;
WHEREAS, the Credit Agreement contains restrictions on the Borrowers
incurring additional Indebtedness, granting additional Liens and entering into
guarantees;
WHEREAS, to effect the above arrangements the Lenders have
authorized the Administrative Agent to enter into the Intercreditor Agreement
and into the Amended and Restated Guarantee and Collateral Agreement;
WHEREAS, the Borrowers have requested that the Lenders consent to
entry by the Borrowers into the New Credit Agreement, and in connection
therewith, and amend certain provisions of the Credit Agreement; and
WHEREAS, the Lenders are willing to agree to the requested consent,
and amendments, but only on the terms and subject to the conditions contained
herein;
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NOW THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt of which is hereby acknowledged, the
Borrowers, the Lenders and the Agents hereby agree as follows:
SECTION 1. DEFINITIONS.
Capitalized terms used herein and not otherwise defined shall have
their respective meanings set forth in the Credit Agreement.
SECTION 2. AMENDMENTS.
2.1 AMENDMENTS TO SECTION 1.01 OF THE CREDIT AGREEMENT. (a) Section
1.01 of the Credit Agreement is hereby amended by (i) deleting in their entirety
the definitions of the terms "Net Cash Proceeds" and "Security Documents" and
(ii) adding the following new definitions in their proper alphabetical order:
"GUARANTEE AND COLLATERAL AGREEMENT" means the Amended and
Restated Guarantee and Collateral Agreement, dated on or about
the date of the Sixth Amendment, to be entered into by the
Borrowers and certain of their subsidiaries in favor of the
Administrative Agent on behalf of the Lenders.
"INTERCREDITOR AGREEMENT" means the Intercreditor Agreement,
dated as of January 29, 2001, between the Administrative Agent
and the administrative agent under the New Credit Agreement in
the form attached as Exhibit E to the New Credit Agreement.
"NEW CREDIT AGREEMENT" means the $16,000,000 Senior Secured
Revolving Credit Agreement, dated as of January 29, 2001,
among the Parent and the Company as borrowers, The Chase
Manhattan Bank as administrative agent, Chase Securities Inc,
as arranger and the financial institutions parties thereto, as
amended from time to time.
"NET CASH PROCEEDS" means (a) in connection with any Asset
Sale or any Recovery Event, the proceeds thereof in the form
of cash and Cash Equivalents (including any such proceeds
received by way of deferred payment of principal pursuant to a
note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of
such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required
to be applied to the repayment of Indebtedness secured by a
Lien expressly permitted hereunder on any asset which is the
subject of such Asset Sale or Recovery Event (other than any
Lien pursuant to a Security Document hereunder) and other
customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be
payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing
arrangements), including any taxes resulting from the transfer
of the proceeds of such sale to the Parent or any of its
Subsidiaries and, in the case of Asset Sales relating to the
Communications Business, Asset Sales relating to Corporate
Technical
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Services Ltd. or the Capital Stock of Melville Exhibition
Services Ltd., market shutdown costs and corporate transition
costs arising in connection with such Asset Sales, in each
case as described during the March 15, 2000 Lender meeting,
and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence
of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys' fees, investment banking fees,
accountants' fees, underwriting discounts and commissions and
other customary fees and expenses actually incurred in
connection therewith.
"PRIORITY SECURITY DOCUMENTS" means the Security Documents (as
defined in the New Credit Agreement) securing amounts payable
in respect of the New Credit Agreement, each as executed and
delivered by the grantors named therein and as may be amended
or revised from time to time.
"SECURITY DOCUMENTS" means, collectively the Guarantee and
Collateral Agreement and all other security documents
hereafter delivered to the Administrative Agent granting a
Lien on any asset or assets of any Person to secure the
obligations and liabilities of the Borrowers hereunder and
under any of the other Loan Documents or any guarantee of any
such obligations and liabilities.
"SIXTH AMENDMENT" shall mean the Sixth Amendment, Consent and
Agreement, dated as of January 29, 2001, to this Agreement.
"SIXTH AMENDMENT EFFECTIVE DATE" has the meaning assigned
thereto in the Sixth Amendment.
2.2 AMENDMENT TO SECTION 2.06 OF THE CREDIT AGREEMENT. (a) Section
2.06 of the Credit Agreement is hereby amended by inserting at the commencement
of each of paragraph (c) and (g) of said Section the phrase "Subject to the
provisions of the New Credit Agreement and".
(b) Section 2.06 of the Credit Agreement is hereby amended by
inserting at the commencement of paragraph (h) of said Section the
phrase "Subject to prior compliance with Section 2.06 of the New Credit
Agreement, ".
(c) Section 2.06(i) of the Credit Agreement is deleted and the
following is inserted in lieu thereof as a new Section 2.06(i):
"Subject to prior compliance with Section 2.06 of the New
Credit Agreement, if on any date the Parent or any of its
Subsidiaries receives Net Cash Proceeds from (i) any Asset
Sale, other Disposition or Recovery Event, then the Borrower
shall on such date apply an amount equal to 100% of such Net
Cash Proceeds to the prepayment of the Term Loans and to
reduce permanently the Revolving Credit Commitments, in each
case as provided in Section 2.06(l) or (ii) any equity
issuance by a Parent or Subsidiary, then the Borrowers shall,
on such date apply an amount equal to (x), 70% of the first
$83,000,000 in the aggregate of such Net Cash Proceeds to the
prepayment of the Term Loans and to reduce permanently
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the Revolving Credit Commitments, in each case as provided in
Section 2.06 (l) and (y) 100% of any such Net Cash Proceeds in
excess of $83,000,000 in the aggregate to prepay the Term
Loans and reduce permanently the Revolving Credit Commitments,
in each case as provided in Section 2.06(l)."
2.3 AMENDMENTS TO ARTICLE IV OF THE CREDIT AGREEMENT. (a) Section
4.04(b) of the Credit Agreement is hereby amended by deleting the phrase "Fifth
Amendment Effective Date" where it appears therein, and inserting in lieu
thereof the phrase "Sixth Amendment Effective Date";
(b) Section 4.16 of the Credit Agreement in hereby amended by
deleting Section 4.16(a) thereof and by deleting the phrase "Master
Security Agreement" where it appears in paragraph (b) thereof and
inserting in lieu thereof the phrase "Guarantee and Collateral
Agreement".
2.4 AMENDMENT TO SECTION 5.05 OF THE CREDIT AGREEMENT. Section 5.05
of the Credit Agreement is hereby amended by inserting the following as a new
paragraph (d) of Section 5.05:
"(d) NEW CREDIT AGREEMENT. The administrative agent under the
New Credit Agreement shall have confirmed to the
Administrative Agent that: (i) no Lender has a Revolving
Credit Exposure (as defined in the New Credit Agreement); and,
(ii) the Borrowers have not given notice that either of them
requires a Revolving Credit Loan (as defined in the New Credit
Agreement) under the New Credit Agreement."
2.5 AMENDMENTS TO ARTICLE VI OF THE CREDIT AGREEMENT. (a) Section
6.01 of the Credit Agreement is amended by deleting the words "Intentionally
Deleted" from Section 6.01(j) and inserting in lieu thereof the phrase "at the
same time that the Parent delivers any information to the administrative agent
under the New Credit Agreement, copies of such information".
(b) Section 6.06 of the Credit Agreement is amended by deleting the
word "year" in the phrase ", PROVIDED that, in the absence of a continuing Event
of Default, such visits, examination and inspection shall not occur more than
once each calendar year" at the end of the Section and inserting in lieu thereof
the word "quarter".
(c) Section 6.10(a) of the Credit Agreement is amended by deleting
clause (ii) thereof in its entirety and inserting in lieu thereof the following:
"(ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, either (x) with respect to
any such assets acquired prior to the payment in full of the Obligations (as
such term is defined in the Priority Security Documents) under the Priority
Security Documents, a perfected second priority security interest in such
assets, subject to Liens permitted by Section 7.03, or (y) with respect to any
such assets acquired after the payment in full of the Obligations (as such term
is defined in the Priority Security Documents) under the Priority Security
Documents, a perfected first priority security interest in such assets, subject
to Liens permitted by Section 7.03, in each case including without limitation,
the filing of UCC financing statements in such jurisdictions as may be required
by the
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appropriate Security Document or by law or as may be requested by the
Administrative Agent and"
(d) Section 6.10(b) of the Credit Agreement is amended by (x)
inserting in clause (i) thereof, immediately after the phrase "a perfected first
priority security interest", the parenthetical "(or, if such Subsidiary is or
becomes a Significant Subsidiary at any time prior to the payment in full of the
Obligations (as such term is defined in the Priority Security Documents) under
the Priority Security Documents, a perfected second priority security
interest)", (y) inserting at the end of clause (ii) thereof the phrase "unless
such delivery is required to be made to the administrative agent under the New
Credit Agreement pursuant to Section 5.10 of the New Credit Agreement" and (z)
deleting clause (iii) thereof in its entirety and inserting in lieu thereof the
following:
"(iii) cause such new Subsidiary (A) to become party to the
Guarantee and Collateral Agreement (or in the case of a Foreign Subsidiary,
enter into guarantee and collateral arrangements reasonably acceptable to the
Administrative Agent) and (B) to take such actions necessary or advisable to
grant to the Administrative Agent for the benefit of the Lenders either (x) in
the case of a Subsidiary which is or becomes a Significant Subsidiary at any
time prior to the payment in full of the Obligations (as such term is defined in
the Priority Security Documents) under the Priority Security Documents, a
perfected second priority security interest (or in the case of a Foreign
Subsidiary that has granted a Lien permitted by Section 7.02(k), a third
priority security interest) in the collateral described in such Gurarantee and
Collateral Agreement or other guarantee and collateral arrangements with respect
to such Subsidiary, including, without limitation, the filing of UCC financing
statements in such jurisdictions as may be requested by the Administrative
Agent, subject to Liens permitted by Section 7.03, or (y) in the case of a
Subsidiary which is or becomes a Significant Subsidiary at any time after the
payment in full of the Obligations (as such term is defined in the Priority
Security Documents) under the Priority Security Documents a perfected first
priority security interest (or in the case of a Foreign Subsidiary that has
granted a Lien permitted by Section 7.02(k), a second priority security
interest) in the collateral described in such Guarantee and Collateral Agreement
or other guarantee and collateral arrangements with respect to such Subsidiary,
including, without limitation, the filing of UCC financing statements in such
jurisdictions as may be requested by the Administrative Agent, subject to Liens
permitted by Section 7.03, and"
2.6 AMENDMENTS TO ARTICLE VII OF THE CREDIT AGREEMENT. (a) Section
7.02(a) of the Credit Agreement is hereby deleted and the phrase "Indebtedness
of the Borrowers and the other Loan Parties under this Agreement, the other Loan
Documents, the New Credit Agreement and the Loan Documents (as defined in the
New Credit Agreement)" is inserted in lieu thereof as a new Section 7.02(a).
(b) Section 7.02(d) of the Credit Agreement is hereby deleted and
the phrase "Indebtedness of (i) the Parent to any Subsidiary of the Parent and
(ii) any Subsidiary which is a guarantor party to the Guarantee and Collateral
Agreement or in respect of which the requirements of Section 6.10 have been
complied with, to the Parent or any other Subsidiary" is inserted in lieu
thereof as a new Section 7.02(d).
(c) Section 7.02 of the Credit Agreement is hereby amended by adding
a new Section 7.02(k) as follows:
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"Indebtedness incurred by Excluded Foreign Subsidiaries in an amount
not to exceed $2,000,000 provided that such Indebtedness is not Guaranteed by
any Loan Party"
(d) Section 7.03(h) of the Credit Agreement is hereby amended by
adding after the words "Security Documents" the phrase "and the Priority
Security Documents".
(e) Sections 7.03(n) and (o) of the Credit Agreement are hereby
amended by deleting each such Section and inserting in lieu thereof the phrase
"Intentionally Deleted".
(f) Section 7.03(p) of the Credit Agreement is hereby amended by
deleting the period at the end of the sentence and adding the word "and" in lieu
thereof.
(g) Section 7.03 of the Credit Agreement is hereby amended by adding
a new Section 7.03(q) as follows:
"Liens granted by a Foreign Subsidiary on its assets securing
Indebtedness permitted by Section 7.02(k) incurred by such Foreign
Subsidiary".
(h) Section 7.04(a) of the Credit Agreement is hereby amended by
adding after the words "Existing Credit Agreement" the phrase "and the Priority
Security Documents".
(i) Section 7.04(c) of the Credit Agreement is hereby amended by
adding after the word "Agreement" where it appears in such Section the phrase
"(other than Indebtedness permitted under Section 7.02(k))"
(j) Section 7.06 of the Credit Agreement is hereby amended by
deleting Section 7.06(e) and inserting the phrase "[Intentionally Deleted]" in
lieu thereof.
(k) Section 7.12 of the Credit Agreement is hereby amended to read
as follows:
"Enter into with any Person any agreement, other than (a) this
Agreement and the Loan Documents, (b) the New Credit Agreement and the Loan
Documents (as defined in the New Credit Agreement) and (c) any purchase money
mortgage or Capital Leases permitted by this Agreement (in which cases, any
prohibition or limitation shall only be effective against the assets financed
thereby), which prohibits or limits the ability of the Parent or any of its
Subsidiaries to create, incur, assume or suffer to exist any Lien to secure the
obligations upon any of its property, assets or revenues, whether now owned or
hereafter acquired."
(l) Section 7.14 of the Credit Agreement is hereby amended by adding
after the words "other than the Parent" the phrase "(other than this Agreement
and the New Credit Agreement)".
(m) Section 7.16 of the Credit Agreement is hereby amended by
deleting Section 7.16(b) and inserting in lieu thereof the phrase "Intentionally
Deleted".
2.7 AMENDMENTS TO ARTICLE X OF THE CREDIT AGREEMENT (a) Section
10.02 of the Credit Agreement is hereby amended by deleting the addresses
provided therein for the Parent and the Company and substituting in lieu thereof
the following addresses:
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The Parent: 000 Xxxx Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Digby Davies
J. Xxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with copies to:
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telecopy: (000) 000-0000
The Company: 000 Xxxx Xxxxx Xxxxxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Digby Davies
J. Xxxxxxx Xxxxxxxxx
Fax: (000) 000-0000
with copies to:
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Telecopy: (000) 000-0000
(b) Section 10.06(c) of the Credit Agreement is hereby amended by
inserting immediately prior to the sentence commencing "Upon acceptance and
recording pursuant to..." and after the words "Administrative Questionaire" the
phrase:
"PROVIDED FURTHER that notwithstanding the foregoing no such
assignment shall be made if the assigning Lender is also a Lender under the New
Credit Agreement and following such assignment the assigning Lender shall have a
Commitment under this Agreement of less than $2,000,000".
SECTION 3. CONSENTS.
3.1 CONSENT TO INTERCREDITOR AGREEMENT. The Lenders hereby consent
to the execution, delivery and performance by the Borrowers and the
Administrative Agent of the Intercreditor Agreement and direct the
Administrative Agent to execute and deliver the Intercreditor Agreement.
3.2 CONSENT TO NEW CREDIT AGREEMENT. The Lenders hereby consent to
the execution, delivery and performance by the Parent and the Company of the New
Credit Agreement and the other Loan Documents defined therein and to the
incurrence of Indebtedness and the granting of Liens as contemplated therein.
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SECTION 4. MISCELLANEOUS.
4.1 REPRESENTATIONS AND WARRANTIES; NO DEFAULT. (a) After giving
effect to this Sixth Amendment, the Borrowers hereby represent and warrant that
all representations and warranties contained in the Credit Agreement are true
and correct in all material respects as of the date hereof (unless stated to
relate to a specific earlier date, in which case, such representations and
warranties shall be true and correct as of such earlier date) and that no
Default or Event of Default shall have occurred and be continuing or would
result from the execution and delivery of this Sixth Amendment.
(b) The Borrowers further represent and warrant that as of January
25, 2001, the Borrowers and the other Loan Parties are truly and justly indebted
(including contingent liabilities in respect of Letters of Credit) to the Agents
and the Lenders pursuant to the Loan Documents, in the principal amount of
$358,378,142.30 plus accrued interest, fees and other amounts payable pursuant
to the Loan Documents, without defense, counterclaim or offset of any kind.
4.2 CONDITIONS TO EFFECTIVENESS OF THIS SIXTH AMENDMENT. This Sixth
Amendment shall be effective as of the date first set forth above (the "SIXTH
AMENDMENT EFFECTIVE DATE") upon the satisfaction of the following conditions:
(a) receipt by the Administrative Agent of counterparts hereof duly
executed and delivered by the Borrowers and the Majority Lenders and consented
to by the Loan Parties (other than the Borrowers);
(b) the payment by the Borrowers of the costs and expenses of the
Administrative Agent owing under Section 10.05 of the Credit Agreement and for
which invoices have been submitted; and
(c) receipt by the Administrative Agent of an opinion from Xxxxxxx
Xxxx & Xxxxx LLP in the form agreed prior to the date of this Sixth Amendment.
4.3 LIMITED EFFECT. Except as expressly amended by this Sixth
Amendment, the Credit Agreement is and shall continue to be in full force and
effect in accordance with its terms, and this Sixth Amendment shall not
constitute the Lenders' consent or indicate their willingness to consent to any
other amendment, modification or waiver of the Credit Agreement or the other
Loan Documents.
4.4 GOVERNING LAW. THIS SIXTH AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
4.5 COUNTERPARTS. This Sixth Amendment may be executed by the
parties hereto on one or more counterparts, and all of such counterparts shall
be deemed to constitute one and the same instrument. This Sixth Amendment may be
delivered by facsimile transmission of the relevant signature pages hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Amendment to be executed and delivered by their respective duly authorized
officers as of the date first above written.
AUDIO VISUAL SERVICES CORPORATION
By: /S/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
AUDIO VISUAL SERVICES (NY) CORPORATION
By: /S/ Xxxxxx X. Xxxxx
-------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
THE CHASE MANHATTAN BANK
By: /S/ Xxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
Each of the undersigned hereby consents to the foregoing Sixth
Amendment and hereby confirms, reaffirms and restates that its obligations under
or in respect of the Credit Agreement and the documents related thereto to which
it is a party are and shall remain in full force and effect after giving effect
to the foregoing Sixth Amendment.
AVSC INTELLECTUAL PROPERTY MANAGEMENT, INC.
By: /S/ Digby X. Xxxxxx
-------------------------------------------
Name: Digby X. Xxxxxx
Title: Executive Vice President
AUDIO VISUAL SERVICES GROUP, INC.
By: /S/ Digby X. Xxxxxx
-------------------------------------------
Name: Digby X. Xxxxxx
Title: Executive Vice President
VISUAL ACTION HOLDINGS INC.
By: /S/ Digby X. Xxxxxx
-------------------------------------------
Name: Digby X. Xxxxxx
Title: Executive Vice President
HRI, V.I., INC.
By: /S/ Digby X. Xxxxxx
-------------------------------------------
Name: Digby X. Xxxxxx
Title: Executive Vice President
