Exhibit 99.3
AMENDMENT NO. 2
TO
AMENDED AND RESTATED CREDIT AGREEMENT
AGREEMENT, made as of this 3rd day of October, 2002, by and among:
MEDIABAY, INC. (formerly known as Audio Book Club, Inc.), a Florida
corporation ("MediaBay"), XXXXX XXXXXXX, INC., a Delaware corporation ("Xxxxx
Xxxxxxx") and AUDIO BOOK CLUB, INC., a Delaware corporation ("Audio Book Club",
collectively with MediaBay and Xxxxx Xxxxxxx, the "Borrowers" and each
individually, a "Borrower");
The banks, financial institutions and other institutional lenders
which have executed the signature page annexed thereto (each individually, a
"Lender Party" and collectively, the "Lender Parties"); and
ING (U.S.) CAPITAL LLC, as Issuing Bank and as administrative agent
for the Lender Parties (in such capacity, together with its successors in such
capacity, the "Administrative Agent");
WHEREAS:
(A) The Borrowers are indebted to the Lender Parties pursuant to an
Amended and Restated Credit Agreement dated April 30, 2001 (as it is hereby and
as it may hereafter from time to time be amended, modified or supplemented, the
"Credit Agreement");
(B) The Borrowers have requested and the Lender Parties have agreed,
upon the terms and conditions set forth herein, to modify certain definitions,
covenants and other terms thereof;
(C) All capitalized terms that are used herein without definition
and which are defined in the Credit Agreement shall have the respective meanings
ascribed thereto therein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
Article I
Amendments to Credit Agreement
This Amendment No. 2 to Amended and Restated Credit Agreement shall
be deemed to be an amendment to the Credit Agreement, and shall not be construed
in any way as a replacement therefor. All of the terms and provisions of this
Amendment No. 2 are hereby incorporated by reference into the Credit Agreement
as if such terms and provisions were set forth in full therein. The Credit
Agreement is hereby amended, effective upon the satisfaction of the conditions
precedent set forth in Article III hereof, in the following respects:
1.1 The following new definitions are added in Article 1 in appropriate
alphabetical order:
"Amendment No. 2" means Amendment No. 2 dated October __, 2002 to
this Agreement by and among the Borrowers, the Lender Parties, and the
Administrative Agent.
"Huntingdon October 2002 Debt" means those certain secured loans in
the aggregate amount of $1,500,000 made to MediaBay pursuant to the Huntingdon
October 2002 Debt Documents required to be made in three installments pursuant
to the terms of Section 6.2(c)(x) of this Agreement.
"Huntingdon October 2002 Debt Documents" means all documents entered
into or delivered on or prior to the date of Amendment No. 2 in connection with
the Huntingdon October 2002 Debt, including, without limitation, the Huntingdon
October 2002 Notes, and all documents entered into or delivered after such date
evidencing later issuances of Huntingdon October 2002 Notes, so long as such
documents are substantially identical to the forms delivered to the
Administrative Agent pursuant to the conditions to closing under Amendment No.
2, except that references to the Huntingdon October 2002 Debt Documents shall
not include reference to the portions of such documents (including the exhibits
thereto) which refer to the $1,500,000 of subordinated unsecured debt which will
be Subordinated Unsecured Debt Documents, notwithstanding the attachment to the
Huntingdon October 2002 Debt Documents of any such Subordinated Unsecured Debt
Documents relating to the Subordinated Unsecured Debt (the "Subordinated
Portion").
"Huntingdon October 2002 Intercreditor Agreement" means the
Intercreditor Agreement dated April 30, 2001, as amended on the date of
Amendment No. 2 (and if applicable, thereafter) in connection with the
Huntingdon October 2002 Debt among, inter alia, the lenders of the Huntingdon
Financing Debt, the Huntingdon October 2002 Debt and the Administrative Agent,
and comprising one of the Huntingdon October 2002 Debt Documents.
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"Huntingdon October 2002 Notes" means, collectively, those certain
convertible secured subordinated promissory notes in the aggregate amount of
$1,500,000 dated on or about the date of Amendment No. 2, October 10, 2002 and
November 15, 2002 made payable by MediaBay to Huntingdon.
"Subordinated Unsecured Debt" means, if any, those certain unsecured
subordinated loans in the aggregate amount of up to $1,500,000 which may be made
to MediaBay from and after the date of Amendment No. 2 pursuant to the
Subordinated Unsecured Debt Documents in accordance with the provisions of
Section 6.2(c)(xi).
"Subordinated Unsecured Debt Documents" means all documents entered
into or delivered at any time in connection with the Subordinated Unsecured Debt
(if and to the extent incurred), including, without limitation, the Subordinated
Unsecured Notes to the extent permitted by this Agreement.
"Subordinated Unsecured Notes" means, collectively, those certain
convertible unsecured subordinated promissory notes in the aggregate amount of
up to $1,500,000 if elected to be issued pursuant to Section 6.2(c)(xi) hereof,
in each case payable by MediaBay.
1.2 The definition of "Applicable Margin" set forth in Article 1 of the
Credit Agreement is amended by deleting the number "2.00%" and replacing it with
the number "2.50%".
1.3 The definition of "Excess Cash Flow" is amended to insert the phrase
"and the Huntingdon October 2002 Debt and the Subordinated Unsecured Debt",
immediately after the words "Huntingdon Secured Subordinated Debt" wherever such
words appear in such definition.
1.4 The definition of "Permitted Acquisitions" set forth in Article 1 of
the Credit Agreement is amended and restated to read in its entirety as follows:
"Permitted Acquisitions" means any acquisition by any of the
Borrowers' Subsidiaries of all or substantially all of the assets, or the
capital stock of any Person (or segment of such Person's business) including,
without limitation, by entering into a licensing agreement or arrangement, which
has been consented to in writing by the Administrative Agent and the Required
Lenders. Concurrently with the making of a Permitted Acquisition, the Borrowers
shall, as additional collateral security for the Obligations, grant or cause to
be granted to the Administrative Agent for the ratable benefit of the Lenders,
prior liens on and security interest (subject to Permitted Liens existing with
respect to such assets at the time of the Permitted Acquisition) in any of the
acquired assets by the execution and delivery to the Administrative Agent of
such agreements, instruments and documents as shall be reasonably satisfactory
in form and substance to the Administrative Agent and the Borrowers shall have
delivered to the
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Administrative Agent a Compliance Certificate effective as of the date of
consummation of such acquisition. Notwithstanding the foregoing, the consent of
the Administrative Agent and Required Lenders shall not be required in respect
of licensing agreements or arrangements that do not involve the incurrence by
the Borrowers or any of their Subsidiaries of obligations in any calendar year
(whether royalties, fees or otherwise) aggregating less than the following in
respect of all Borrowers and their Subsidiaries (and assuming that all payments
made to any such licensor or seller in respect of the same or a related series
of transactions involving acquisition or licensing of any assets are
attributable to the licensing arrangements): $150,000 upon effectiveness of the
licensing agreement or arrangement or otherwise as an upfront payment or
advance; provided, however, that, in addition, the consent of the Administrative
Agent and Required Lenders shall not be required in respect of licensing
agreements and arrangements involving upfront payments or advances in excess of
$150,000 for multiple titles with the following publishers Simon & Xxxxxxxx,
Penguin Xxxxxx, Random House, Xxxxxx Audio, CBS, Time Warner Audio or advances
or upfront payments in excess of $150,000 for single titles for the rights for
works from the following authors: Xxxx Xxxxxxx, Xxxxxxx Xxxx, Xxx Xxxxxx,
Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxxx, Xxxx Xxxxxx or X. X. Xxxxxxxx. Except as set
forth in the aforementioned proviso, following the date of Amendment No. 2,
additional agreements or arrangements for advances or upfront payments for a
single agreement or series of related agreements in excess of $150,000 in any
calendar year must be approved in advance by the Administrative Agent and
Required Lender, such approval not to be unreasonably withheld.
1.5 The definition of "Permitted Liens" set forth in Article 1 is amended
to add in clause (j) thereof the following words immediately after the phrase
"Huntingdon Financing Debt": "and in connection with the Huntingdon October 2002
Debt".
1.6 The definition of "Revolving Credit Termination Date" set forth in
Article 1 of the Credit Agreement is amended and restated to read in its
entirety as follows:
"Revolving Credit Termination Date" means January 15, 2004.
1.7 Section 2.4(a) of the Credit Agreement, "Repayment of Advances", is
amended by deleting the table set forth therein and replacing it with the table
set forth below:
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Date Amount
---- ------
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Each of July 31, 2002 and the last day of each month $150,000
thereafter through and including August 31, 2002
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Each of September 30, 2002 and the last day of each $160,000
month thereafter through and including December 31, 2002
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Each of January 31, 2003 and the last day of each $170,000
month thereafter through and including March 31, 2003
-----------------------------------------------------------------------
Each of April 30, 2003 and the last day of each month $180,000
thereafter through and including June 30, 2003
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Each of July 31, 2003 and the last day of each month $190,000
thereafter through and including September 30, 2003
-----------------------------------------------------------------------
Each of October 31, 2003 and the last day of each $200,000
month thereafter through and including December 31, 2003
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1.8 Section 2.6(b)(i) of the Credit Agreement, "Prepayments", is amended
by deleting the clause "Within ninety (90) days following the end of Fiscal Year
2001" and replacing it with the clause "Within ninety (90) days following the
end of each of Fiscal Years 2001 and 2002".
1.9 Schedule 4.19(b) to the Credit Agreement (list of Indebtedness) is
amended and restated to read in its entirety as set forth in Schedule 4.19(b)
attached hereto as if the reference in Section 4.19(b) to "as of the date
hereof" were changed to read "as of the date of Amendment No. 2."
1.10 Subsection 6.2(c) of the Credit Agreement, "Debt", is amended by
inserting new clauses (x) and (xi) at the end of Section 6.2(c) which clauses
(x) and (xi) shall read as follows:
(x) the Huntingdon October 2002 Debt, comprised of $1,000,000
borrowed by MediaBay on or prior to the date of Amendment No. 2
pursuant to the Huntingdon October 2002 Debt Documents, an
additional $150,000 which is hereby required by this subsection to
be borrowed by MediaBay on the same terms (i.e., as part of the
Huntingdon October 2002 Debt) on or before October 10, 2002, and an
additional $350,000 which is hereby required by this subsection to
be borrowed by MediaBay on the same terms on or before November 15,
2002; provided that the holders of such indebtedness execute an
intercreditor agreement (or amend the Huntingdon Financing
Intercreditor Agreement) in form and substance satisfactory to the
Lenders; and provided further that principal and interest shall be
payable or paid by MediaBay
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only in accordance with the terms and conditions of the applicable
Huntingdon October 2002 Debt Documents and (notwithstanding any
provision contained in the Huntingdon October 2002 Debt Documents)
subject to Section 6.20 hereof; and provided, further, that in lieu
of such mandatory borrowings on October 10, 2002 and November 15,
2002 or optional borrowings thereafter referred to in subsection
(xi) below, MediaBay may issue its equity on each of such dates in
exchange for net proceeds in at least such respective principal
amounts (plus the fees, expenses and other costs payable by the
Borrowers or their Subsidiaries in connection with such replacement)
and on terms and conditions at least as favorable to and no more
onerous to, MediaBay and to the Lender Parties as to any cash
payment terms including, without limitation, dividend, distribution
and redemption provisions, as the Huntingdon October 2002 Debt or
the Subordinated Unsecured Debt, respectively, whichever is thereby
replaced, as applicable, and in any event subject in all respects to
the provisions of Section 6.17 hereof;
(xi) up to $1,500,000 in additional unsecured subordinated
indebtedness provided by any person or entity (whether Huntingdon,
Xxxxxx Xxxxxxx, his family or affiliates or by any non-affiliate)
(herein referred to as Subordinated Unsecured Debt) on the same
terms and conditions applicable to the Huntingdon Secured
Subordinated Debt (as in effect, to the extent permitted under this
Agreement, on the date of issuance of any such Subordinated
Unsecured Debt) except that the Subordinated Unsecured Debt shall be
unsecured, and provided that the holders of such indebtedness
execute and deliver to the Lenders and Administrative Agent such
agreements and documents (if any) as may be requested by the Lenders
relating to such subordination consistent with the requirements
relating to previously issued Huntingdon Secured Subordinated Debt
(excluding security provisions thereunder); and shall in any event
deliver to the Lenders copies of all such Subordinated Unsecured
Debt, which shall be in form and substance satisfactory to the
Lenders and certified as true and complete, on or before the date of
issuance thereof (except that Subordinated Unsecured Debt which is
incurred on the terms set forth in the Subordinated Portion (as such
term is defined within the definition of
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"Huntingdon October Debt 2002 Documents") of the Huntingdon October
2002 Debt Documents shall be deemed satisfactory to the Lenders, and
certified copies shall be delivered as set forth above); and
provided, further, that principal and interest shall be payable or
paid by MediaBay only in accordance with the terms and conditions of
the applicable Subordinated Unsecured Debt Documents but in any
event with no cash payments of principal, interest or otherwise due
or payable in connection with any Subordinated Unsecured Debt, and
any such payments shall accrue, be paid-in-kind or be paid in shares
of common stock of MediaBay in lieu of and in full satisfaction of
paying such payments in cash until all Obligations under the Credit
Agreement have been paid in full, and subject to the first two
sentences of Section 6.19 hereof; and
1.11 Subsection 6.4(c), "Fundamental Changes", is amended to add the words
"(or segment of such Person's business)" immediately after the words "capital
stock of any other Person".
1.12 Subsection 6.12(b)(i), "Amendment, Etc. of Material Contracts,
Including Debt", is amended to insert the phrase "or the Huntingdon October 2002
Debt", immediately after the words "Huntingdon Financing Debt".
1.13 Subsection 6.17(e), "Issuance of Stock", is amended and restated in
its entirety to read as follows:
(e) issuances of Equity Interests of MediaBay in replacement for the
Senior Subordinated Debt, the Huntingdon Financing Debt and/or the
Huntingdon Secured Subordinated Debt and/or the Huntingdon October
2002 Debt and/or the Subordinated Unsecured Debt, in whole or in
part, in existence on the date of its initial issuance permitted
hereby; provided, that, such Equity Interests (i) shall be in an
amount at least equal to the sum of the principal amount then
outstanding of such Debt which is replaced plus the fees, expenses
and other costs payable by the Borrowers or their Subsidiaries in
connection with such replacement and (ii) do not mandate or require
the Borrower to, and no holder thereof shall have the right to
require any Borrower to declare or pay any cash dividends or cash
distributions in respect thereof or purchase, redeem, retire,
defease or otherwise acquire for cash any such Equity Interests,
except for payments of cash dividends in
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respect of such Equity Interests on substantially the same economic
terms and having substantially the same economic effect as the
payments of interest on the Senior Subordinated Debt, Huntingdon
Financing Debt or Huntington Secured Subordinated Debt, as
applicable, in effect on the date of Amendment No. 2 and having a
cash dividend not in excess of the rate of interest and payable on
dates comparable to (or less frequently than) the payment dates set
forth in the Senior Subordinated Debt, Huntingdon Financing Debt or
Huntingdon Secured Subordinated Debt, as applicable, in effect on
the date of Amendment No. 2 (provided, that, with respect to any
Equity Interests issued upon conversion of any Senior Subordinated
Debt, Huntingdon Financing Debt or Huntingdon Secured Subordinated
Debt held by Xxxxxx Xxxxxxx, his family or affiliates, or (if
applicable) any Huntingdon October 2002 Debt or Subordinated
Unsecured Debt, dividends shall accrue, be paid-in-kind or be paid
in shares of common stock until the obligations under the Credit
Agreement have been paid in full) and subject to blockage of such
payments upon substantially the same terms as apply to such payments
of interest, and (iii) do not contain any rights, whether or not on
conversion or otherwise, that, if exercisable or exercised on the
date of issuance could result in a Change of Control, or if
exercisable or exercised at any time thereafter could reasonably be
expected to result in a Change of Control, and provided that the
amount and terms of any fees and expenses and other costs associated
therewith are reasonably acceptable to the Administrative Agent;
1.14 Section 6.19, "Senior Subordinated Debt Payments", is amended to
amend and restate the first sentence thereof to read in its entirety as follows:
Make any further cash payment with respect to any payments of
principal, interest or otherwise due in connection with MediaBay's
Senior Subordinated Debt, held by Xxxxxx Xxxxxxx, his family or
affiliates or the Huntingdon Secured Subordinated Debt or any
Subordinated Unsecured Debt.
1.15 Section 6.20, "Huntingdon Senior Secured Note Payments", is amended
and restated to read in its entirety as follows:
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Section 6.20. Huntingdon Senior Secured Note and Huntingdon October
2002 Debt Payments. Make any cash payments with respect to any
payments or prepayments of principal, payments of interest or
otherwise in connection with the Huntingdon Senior Secured Note or
Huntingdon October 2002 Debt. Any such payments shall accrue, be
paid-in-kind or be paid in shares of common stock of MediaBay in
lieu of and in full satisfaction of paying such payments in cash
until all Obligations under the Credit Agreement have been paid in
full.
1.16 A new Section 6.21, "Mandatory Borrowings", is added at the
conclusion of Article 6 to read in its entirety as follows:
Section 6.21. "Mandatory Borrowings". Failure by MediaBay to borrow
and receive the proceeds of the Huntingdon October 2002 Debt (or
permitted equity proceeds in lieu of such borrowings) in the
required installments on or before the specified dates therefor as
set forth in Section 6.2(c)(x) hereof or to execute and deliver to
the Lender Parties and the Administrative Agent certified copies of
the Huntingdon October 2002 Debt Documents promptly upon execution
and delivery thereof and other documents as and when reasonably
required by the Administrative Agent in connection therewith
consistent with the provisions of this Agreement relating to
Huntingdon October 2002 Debt; provided, that, notwithstanding the
terms of Section 2.6(b) hereof, none of the proceeds of any of the
Huntingdon October 2002 Debt or the Subordinated Unsecured Debt (or
equity of MediaBay issued in lieu of such Debt) shall be required to
be used to prepay the Obligations so long as no Default or Event of
Default then exists.
1.17 A new Section 7.20, "Licensing Reports", is added to the Credit
Agreement to read as follows:
Section 7.20. "Licensing Reports". Within 30 days after the end of
each month, an updated report to each Lender setting forth, in
detail reasonably acceptable to the Lenders, information describing
as to all license arrangements of each Borrower, the name of the
payee/licensee; the terms of payment, including amount and dates of
all payments, and the nature or purpose of the payments.
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1.18 Section 8.1 of the Credit Agreement, "Minimum EBITDA", is amended by
inserting new clauses (i), (j), (k) and (l) at the end of the table set forth
therein which clauses (i), (j), (k) and (l) shall read as follows:
"(i) For the period beginning on $3,000,000
January 1, 2001 and ending on
March 31, 2003
(j) For the period beginning on
January 1, 2001 and ending on
June 30, 2003 $4,000,000
(k) For the period beginning on
January 1, 2001 and ending on
September 30, 2003 $5,000,000
(l) For the period beginning on
January 1, 2001 and ending on
December 31, 2003 $6,000,000"
1.19 The Borrowers hereby acknowledge, and represent and warrant, to
Lenders and the Administrative Agent that $500,000 (out of an original issuance
of $3,000,000 set forth as Item 7 of Schedule 4.19(b) of the Credit Agreement
prior to the date of this Amendment No. 2) in Subordinated Debt is currently
outstanding issued by MediaBay to Xxxx Xxxxxxx.
Article II
Consent
The Lenders and the Administrative Agent consent to the issuance of the
debt described in Item 7 of Schedule 4.19(b) as attached hereto. The consent
contained herein is limited specifically as written to the matter described in
this Article II. Nothing contained in this Article II shall be deemed to
constitute a waiver, modification or release of any Event of Default or other
term or condition under the Credit Agreement. The consent set forth in this
Article II shall not constitute a consent to or waiver of any other or
subsequent actions or matters and shall not prejudice any right, power or remedy
which the Administrative Agent or Lender Parties now have or may have in the
future in connection with any Loan Document.
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Article III
Representations and Warranties
Each Borrower hereby represents and warrants to the Administrative
Agent and the Lender Parties that:
3.1 After giving effect to the consent set forth in Article II hereof,
there exists no Default or Event of Default under the Credit Agreement, as
amended hereby, as of the date hereof.
3.2 After giving effect to this Amendment No. 2 each and every one of the
representations and warranties set forth in Article 4 of the Credit Agreement is
true and correct in all respects as if made on the date hereof, except for such
changes (a) which were disclosed in the Company's Form 10-QSB for the quarter
ended June 30, 2002 or (b) in the ordinary course of business not prohibited by
the Credit Agreement, in each case with respect to the preceding clauses (a) and
(b) which would not have a Material Adverse Effect individually or in the
aggregate.
3.3 Each Loan Party (a) to the extent it is a party thereto, has all
requisite corporate power and authority to execute and deliver this Amendment
No. 2, and each other agreement, instrument or document contemplated to be
executed or delivered by any Borrower, or any other Loan Party pursuant to
Amendment No. 2 (all such agreements, instruments and documents contemplated to
be executed or delivered in connection herewith by any Loan Party are sometimes
hereinafter referred to collectively, together with this Amendment No. 2, as the
"Amendment No. 2 Documents") and to consummate the transactions contemplated
hereby and (b) has taken all action, corporate or otherwise, necessary to
authorize the execution and delivery of the Amendment No. 2 Documents and the
consummation of the transactions contemplated hereby.
3.4 The execution, delivery and performance by each Loan Party of the
Amendment No. 2 Documents to which it is a party and the consummation of the
transactions contemplated thereby, are within such Loan Party's corporate
powers, have been duly authorized by all necessary corporate action, and do not
(a) contravene such Loan Party's charter or bylaws, (b) violate any law
(including, without limitation, the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Racketeer Influenced and
Corrupt Organizations Chapter of the Organized Crime Control Act of 1970), rule,
regulation (including, without limitation, Regulation T, U or X of the Board of
Governors of the Federal Reserve System), order, writ, judgment, injunction,
decree, determination or award, (c) conflict with or result in the breach of, or
constitute a default under, any material contract, loan agreement, indenture,
mortgage, deed of trust, lease or other material instrument or agreement binding
on or affecting any Loan Party, any of its Subsidiaries or any of their
respective properties where the conflict, breach or default relates to an
instrument, agreement or other document involving assets, revenues or
liabilities in excess of $250,000 individually or $500,000 in the aggregate or
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otherwise could reasonably be expected to have a Material Adverse Effect, or (d)
except for the Liens created under the Collateral Documents, result in or
require the creation or imposition of any Lien upon or with respect to any of
the properties of any Loan Party or any of its Subsidiaries. No Loan Party or
any of its Subsidiaries is in violation of any such law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture, mortgage, deed of trust, lease
or other instrument or agreement, the violation or breach of which could
reasonably be expected to have a Material Adverse Effect.
3.5 This Amendment No. 2 and the other Amendment No. 2 Documents have each
been duly executed and delivered by each Loan Party that is a party thereto and
each constitutes the valid and legally binding obligation of such Loan Party,
except (a) as such enforceability may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws, now or hereafter in effect, relating to or affecting the enforcement of
creditors' rights generally, and to the extent such enforceability is subject to
general principles of equity (whether such enforcement is sought in a proceeding
at law or in equity), and (b) that the remedy of specific performance and other
equitable remedies are subject to judicial discretion.
3.6 The Liens and security interests granted pursuant to the Collateral
Documents secure, without limitation, the indebtedness, liabilities and
obligations of the Borrowers to the Administrative Agent and the Lender Parties
under the Credit Agreement, as amended hereby, or the Guaranteed Obligations of
the Guarantors signatory hereto, whether or not expressly so stated in the
Collateral Documents, and the terms "Obligations", "Debt" and "Indebtedness" as
used in such Collateral Documents (or any other term used therein to describe or
refer to the indebtedness, liabilities and obligations of the Borrower to the
Administrative Agent and the Lender Parties) includes, without limitation, the
indebtedness, liabilities and obligations of the Borrowers under the Credit
Agreement as amended hereby.
Article IV
Conditions
The effectiveness of this Amendment No. 2 shall be subject to the
fulfillment by the Borrowers, in a manner satisfactory to the Administrative
Agent and the Lender Parties, of all of the conditions precedent set forth in
this Article IV, and the date on which all such conditions shall have been
fulfilled to the satisfaction of the Administrative Agent and the Lender
Parties, and this Amendment No. 2 shall have become effective, shall be herein
called the "Effective Date".
4.1 (a) The representations and warranties contained herein and each other
agreement, instrument, certificate or other writing delivered to the
Administrative Agent or any Lender Party pursuant hereto or to the Credit
Agreement shall be correct on and as of the date hereof after giving effect to
this Amendment No. 2 as though made on and as
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of such date, (b) no Default or Event of Default shall have occurred and be
continuing on the Effective Date (after giving effect to the consent set forth
in Article II hereof) or would result from the taking effect of this Amendment
No. 2, or the transactions contemplated hereby, and (c) all of the conditions
precedent to the effectiveness of this Amendment No. 2 shall have been
satisfied; and
the execution and delivery of this Amendment No. 2 constitutes the Borrowers'
certification to the Lender Parties and the Administrative Agent as to the
truth, accuracy and completeness of the matters set forth in this Section 4.1.
4.2 The Administrative Agent shall have received copies of agreements and
instruments, satisfactory in form and substance to the Administrative Agent,
evidencing the extension of the maturity date of the Huntingdon Financing Debt
to at least January 15, 2004 in the case of the $2,500,000 note and the $500,000
note (both comprising the Huntingdon Financing Debt) and extension of the
maturity date of the Huntingdon Secured Subordinated Debt to at least April 15,
2004, and, if applicable, any other subordinated debt owed by any of the
Borrowers or Guarantors, certified as true and complete by a responsible officer
of the Borrowers.
4.3 (a) The Administrative Agent shall have received certified copies of
all agreements and instruments, satisfactory in form and substance to the
Administrative Agent, evidencing the issuance of the Huntingdon October 2002
Debt referred to in Section 6.2(c)(x) of the Credit Agreement as amended hereby.
(b) The Administrative Agent shall have received satisfactory
evidence of the Borrower's receipt of at least $1,000,000 in cash as net
proceeds of the (initial) issuance of Huntingdon October 2002 Debt.
(c) The Lenders and lenders of the Huntingdon October 2002 Debt and
all other applicable parties shall have executed the Huntingdon October 2002
Debt Intercreditor Agreement dated the date hereof in form and substance
satisfactory to the Required Lenders.
(d) The Administrative Agent shall have received evidence that the
holders of all outstanding Senior Subordinated Debt have consented to the
Huntingdon October 2002 Debt.
(e) The Administrative Agent shall have received a certificate of
the Secretary or an assistant secretary of Huntingdon certifying the names and
true signatures of the officers of Huntingdon authorized to sign each Loan
Document to which it is a party and the other documents to be delivered
hereunder and thereunder.
(f) All governmental and third party consents and approvals
necessary in connection with any aspect of the Huntingdon October 2002 Debt
(other than any consent to the issuance of the stock of MediaBay which shall be
issuable from the
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convertible debt pursuant to the terms of the Huntingdon October 2002 Documents
and which by the terms of the Huntingdon October 2002 Debt Documents may be
issued only following receipt of any required consent) shall have been obtained
(without the imposition of any conditions that are not acceptable to the
Lenders) and shall remain in effect; all applicable waiting periods shall have
expired without any adverse action being taken by any competent authority; and
no law or regulation shall be applicable in the judgment of the Lenders that
restrains, prevents or imposes materially adverse conditions upon any aspect of
the Facilities.
4.4 The Administrative Agent shall have received copies of resolutions
adopted by the Borrowers' boards of directors, certified by an authorized
officer thereof authorizing the execution, delivery and performance of the
Amendment No. 2 Documents, the Huntingdon October 2002 Debt Documents and
amendments to subordinated debt documents, and an incumbency certificate
relating to each of the Borrowers, and all documents incidental thereto shall be
satisfactory to the Administrative Agent, the Lender Parties and their counsel,
and each such person shall have received all such information and such
counterpart originals or certified copies of documents as may have been
reasonably requested.
4.5 The Borrowers shall have:
(a) paid a non-refundable amendment fee in an amount equal to
$45,000.00 to the Administrative Agent, for the pro rata account of each Lender
that timely executes and delivers its signature page evidencing its agreement to
this Amendment, with the first installment in the amount of $22,500.00 payable
on the date of this Amendment and the second installment of $22,500.00 payable
on the date that is thirty days after the date hereof;
(b) paid to Winston & Xxxxxx, counsel to the Administrative Agent,
all outstanding fees and expenses incurred in connection with this Amendment No.
2 or otherwise, including any fees incurred to comply with Revised Article 9 of
the UCC; and
(c) otherwise complied in all respects with the terms hereof and of
any other agreement, document, instrument or other writing to be delivered by
any Borrower in connection herewith.
4.6 Each of the parties hereto shall have executed and delivered this
Amendment No. 2 to the Administrative Agent.
4.7 All proceedings in connection with the transactions contemplated by
this Amendment No. 2 and all documents incidental thereto shall be reasonably
satisfactory to the Administrative Agent, the Lender Parties and their
respective counsel, and each such Person shall have received all such
information and such counterpart originals or certified copies of documents as
may have been reasonably requested.
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Article V
Acknowledgments, Confirmations and General Amendments
5.1 Each Borrower and each Guarantor hereby acknowledges that (i) the
outstanding aggregate principal amount of the Advances as of the date of this
Amendment No. 2 is $5,030,000 and (ii) accrued interest on the unpaid principal
amount of the Advances has been paid through September 30, 2002.
5.2 Each of the Guarantors hereby (i) acknowledges and consents to this
Amendment No. 2 (whether or not its consent is required); (ii) confirms and
agrees that the Subsidiary Guaranty to which it is a party is, and shall
continue to be, in full force and effect and is hereby ratified and confirmed in
all respects, and all references in any such Subsidiary Guaranty to "the Credit
Agreement," "thereof," "thereunder" or words of like import referring to the
Credit Agreement shall mean the Credit Agreement as amended by this Amendment
No. 2; (iii) confirms and agrees that, the "Guaranteed Obligations" as defined
in such Subsidiary Guaranty include the Obligations of the Borrowers to the
Lender Parties under the Credit Agreement as amended by this Amendment No. 2;
and (iv) confirms and agrees that the Liens and security interests granted by
each of them pursuant to the Collateral Documents secure, without limitation,
the indebtedness, liabilities and obligations of the Guarantors to the Lender
Parties and the Administrative Agent under the Subsidiary Guaranty, including
without limitation, the Guaranteed Obligations which obligations include the
obligations of the Borrowers under the Credit Agreement as amended hereby.
5.3 All references in the Credit Agreement and every other agreement,
instrument and document executed and delivered by each of the Loan Parties in
connection therewith, including, without limitation, any of the Collateral
Documents, to "Credit Agreement" and "Agreement", as applicable, and also, in
the case of the Credit Agreement to "this Agreement", shall be deemed to refer
to the Credit Agreement as amended and supplemented hereby.
5.4 The Credit Agreement, the Collateral Documents and all agreements,
instruments and documents executed and delivered in connection with any of the
foregoing, shall each be deemed amended hereby to the extent necessary, if any,
to give effect to the provisions of this Amendment No. 2.
5.5 Each Borrower and each Guarantor hereby acknowledges that (i) it has
been advised by counsel in the negotiation, execution and delivery of this
Amendment No. 2; (ii) neither the Lender Parties nor any of their
representatives have any fiduciary relationship to any Borrower or any Guarantor
and the relationship between the Lender Parties, on the one hand, and the
Borrowers and each Guarantor, on the other, is solely that of creditor and
debtor; and (iii) no joint venture exists among any of the Lender Parties and
any Borrower or any Guarantor.
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Article VI
Continued Effectiveness of Credit Agreement; Release of Claims
The Credit Agreement and the other agreements to which any Borrower
is a party delivered in connection herewith or with the Credit Agreement are,
and shall continue to be, in full force and effect, and are hereby ratified and
confirmed in all respects except that on and after the date hereof (a) all
references in the Credit Agreement to "this Agreement", "hereto", "hereof",
"hereunder" or words of like import referring to the Credit Agreement shall mean
the Credit Agreement as amended and supplemented by this Amendment No. 2 and (b)
all references in the Credit Agreement and such other agreements to which any
Borrower is a party to the "Credit Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Credit Agreement shall
mean the Credit Agreement as amended and supplemented by this Amendment No. 2.
FOR GOOD AND VALUABLE CONSIDERATION, INCLUDING, WITHOUT LIMITATION,
THE AGREEMENT BY THE LENDER PARTIES TO ENTER INTO THIS AMENDMENT NO. 2, EACH
BORROWER, ITS SUBSIDIARIES AND EACH GUARANTOR SHALL RELEASE EACH OF THE LENDER
PARTIES AND THEIR OFFICERS, DIRECTORS, REPRESENTATIVES, EMPLOYEES AND
PROFESSIONAL ADVISORS FROM ANY AND ALL CLAIMS (AS DEFINED IN 11 U.S.C.
ss.101(5))(EACH A "CLAIM" AND COLLECTIVELY THE "CLAIMS") AND ANY AND ALL
ACTIONS, CAUSES OF ACTION, SUITS, DEBTS, DUES, SUMS OF MONEY, ACCOUNT,
RECKONINGS, RIGHTS TO LEGAL REMEDIES, RIGHTS TO EQUITABLE REMEDIES, RIGHTS TO
PAYMENT AND CLAIMS, BONDS, BILLS, SPECIALTIES, COVENANTS, CONTRACTS,
CONTROVERSIES, AGREEMENTS, PROMISES, VARIANCES OR TRESPASSES, WHETHER KNOWN OR
UNKNOWN, REDUCED TO JUDGMENT, NOT REDUCED TO JUDGMENT, LIQUIDATED, UNLIQUIDATED,
FIXED, CONTINGENT, MATURED, UNMATURED, DISPUTED, UNDISPUTED, SECURED OR
UNSECURED, AND WHETHER ASSERTED OR ASSERTABLE DIRECTLY OR INDIRECTLY OR
DERIVATIVELY, IN LAW, EQUITY OR OTHERWISE (EACH A "CAUSE OF ACTION", AND
COLLECTIVELY, THE "CAUSES OF ACTION"); PROVIDED, HOWEVER, THAT THE FOREGOING
SENTENCE SHALL NOT RELEASE OR AFFECT ANY OBLIGATIONS OF THE LENDER PARTIES SET
FORTH IN THIS AMENDMENT NO. 2.
THE RELEASE SET FORTH ABOVE SHALL APPLY TO EACH CLAIM AND CAUSE OF
ACTION THAT ANY BORROWER, ITS SUBSIDIARIES OR ANY GUARANTOR OR ANY OF THEIR
AFFILIATES WOULD HAVE BEEN LEGALLY ENTITLED TO ASSERT IN THEIR OWN RIGHT
(WHETHER INDIVIDUALLY OR COLLECTIVELY) OR ON BEHALF OF THE HOLDER OF ANY CLAIM
OR EQUITY INTEREST IN ANY BORROWER, ITS SUBSIDIARIES OR ANY GUARANTOR OR OTHER
PERSON OR ENTITY, BASED IN WHOLE OR IN PART UPON ANY ACT OR OMISSION,
TRANSACTION, AGREEMENT,
16
EVENT OR OTHER OCCURRENCE TAKING PLACE ON OR BEFORE THE DATE OF THIS AMENDMENT
NO. 2 FOR CLAIMS OR LIABILITIES (I) IN RESPECT OF ANY LOAN, ADVANCE OR SIMILAR
PAYMENT BY ANY BORROWER, ITS SUBSIDIARIES OR ANY GUARANTOR OR ANY OF THEIR
AFFILIATES TO ANY SUCH PERSON, OR (II) IN RESPECT OF ANY CONTRACTUAL OBLIGATION
OWED BY SUCH PERSON TO ANY BORROWER, ITS SUBSIDIARIES OR ANY GUARANTOR OR ANY OF
THEIR AFFILIATES.
Article VII
Miscellaneous
7.1 Except as specifically amended herein, the Credit Agreement shall
remain in full force and effect in accordance with its terms.
7.2 This Amendment No. 2 shall be governed and construed in accordance
with the laws of the State of New York.
7.3 No modification or waiver of or with respect to any provisions of this
Amendment No. 2 and all other agreements, instruments and documents delivered
pursuant hereto or thereto, nor consent to any departure by the Administrative
Agent or the Lender Parties from any of the terms or conditions thereof, shall
in any event be effective unless it shall be in writing and executed in
accordance with the provisions of the Credit Agreement, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No consent to or demand on any Borrower in any case shall, of
itself, entitle it to any other or further notice or demand in similar or other
circumstances. This Amendment No. 2, together with the Credit Agreement, as
amended, embodies the entire agreement and understanding among the Borrowers,
the Administrative Agent and the Lender Parties and supersedes all prior
agreements and understandings relating to the subject matter hereof.
7.4 The provisions of this Amendment No. 2 are severable, and if any
clause or provision shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction and shall not in
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision in this Amendment No. 2 in any jurisdiction.
7.5 This Amendment No. 2 may be signed in any number of counterparts with
the same effect as if the signatures thereto and hereto were upon the same
instrument. Delivery of an executed counterpart to this Amendment No. 2 by
facsimile machine shall be as effective as delivery of a manually executed
counterpart of this Amendment No. 2. Notwithstanding any provision of Article IV
above, the provisions of Article VI above and this Article VII shall become
effective immediately upon the execution hereof.
17
7.6 This Amendment No. 2 shall be binding upon and inure to the benefit of
each Borrower and its respective successors and to the benefit of the
Administrative Agent and the Lender Parties and their respective successors and
assigns. The rights and obligations of any Borrower under this Amendment No. 2
shall not be assigned or delegated without the prior written consent of the
Lender Parties, and any purported assignment or delegation without such consent
shall be void.
7.7 Time is expressly made of the essence of this Agreement.
[Signature Pages Follow]
18
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
be duly executed on the date first above written.
MEDIABAY, INC.
By:________________________________
Title:_____________________________
XXXXX XXXXXXX, INC.
By:________________________________
Title:_____________________________
AUDIO BOOK CLUB, INC.
By:________________________________
Title:_____________________________
ING (U.S.) CAPITAL LLC,
as Administrative Agent and Lender
By:________________________________
Title:_____________________________
ARK CLO 2000-1, Limited,
as Lender
By: PATRIARCH PARTNERS, LLC,
its Collateral manager
By:________________________________
Title:_____________________________
The undersigned, whether or not consent is required in respect of any of the
foregoing, hereby confirm, agree to and accept the terms of this Amendment No. 2
and confirm the truth and accuracy of the representations and warranties
relating to any of the undersigned.
XXXXXXXX.XXX, INC.
By:________________________________
Title:_____________________________
XXXXXXXXXXXXX.XXX, INC.
By:________________________________
Title:_____________________________
ABC-COA ACQUISITION CORP.
By:________________________________
Title:_____________________________
MEDIABAY SERVICES, INC.
By:________________________________
Title:_____________________________
AUDIO BOOK CLUB, INC.
By:________________________________
Title:_____________________________
ABC INVESTMENT CORP.
By:_________________________________
Title:______________________________
MEDIABAY PUBLISHING, INC.
By:_________________________________
Title:______________________________
RADIO CLASSICS, INC.
By:_________________________________
Title:______________________________
