EXHIBIT 10.27.2
AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT
(NUMBER TWO)
This AMENDMENT TO REVOLVING CREDIT AND TERM LOAN AGREEMENT (NUMBER TWO)
dated as of December 31, 2003 (the "Amendment"), amends that certain Revolving
Credit and Term Loan Agreement dated as of June 28, 2002, as amended by that
certain Amendment to Revolving Credit and Term Loan Agreement (Number One) dated
as of November 7, 2003 (said loan agreement, as so amended, the "Loan
Agreement") by and among XXXXXXX RADIO CORP. ("ERC US"), a Delaware corporation,
MAJEXCO IMPORTS, INC. ("MI"), a California corporation, XXXXXXX RADIO (HONG
KONG) LIMITED ("ER HONG KONG") a Hong Kong corporation, and XXXXXXX RADIO
INTERNATIONAL LTD. ("ER BVI"), a British Virgin Islands company, jointly and
severally as co-borrowers and co-obligors, except as expressly set forth herein
in Section 10.8 hereof (individually and collectively, the "Borrower"), PNC
BANK, NATIONAL ASSOCIATION and each other lender signatory hereto or which
becomes a Lender pursuant to Section 9.1 (each a "Lender" and, collectively, the
"Lenders") and PNC BANK, NATIONAL ASSOCIATION as agent for the Lenders (in such
capacity, the "Agent").
WITNESSETH:
A. Pursuant to the Loan Agreement, the Lenders provided the Borrower a
revolving credit facility and a term loan as described in the Loan Agreement.
B. The Borrower has further requested various other modifications to
certain of the financial covenants set forth in the Loan Agreement (in each case
as more fully described below) and the Agent and the Lenders are willing to so
modify the Loan Agreement subject to, and in accordance with, the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements set forth herein, and for value received by each party, the parties
hereto agree as follows:
1. Definitions. Unless otherwise defined or modified herein,
capitalized terms used herein shall have the meanings set forth in the Loan
Agreement.
2. Amendments to Loan Agreement. Subject to the satisfaction of the
conditions to effectiveness set forth in Section 8 below, the Loan Agreement
shall be amended as follows:
(a) Section 6.12 of the Loan Agreement is hereby amended in
its entirety to read as follows:
"Section 6.12. Fixed Charge Coverage Ratio. Permit the Fixed
Charge Coverage Ratio for the period of four consecutive fiscal
quarters preceding any date of determination to be less than 1.25 to 1,
except in the case of the four consecutive fiscal quarters preceding
March 31, 2004, in which case, said ratio shall not be permitted to be
less than 1.10 to 1; provided, however that (i) the parties acknowledge
and agree that the Fixed Charge Coverage Ratio will not be tested for
the test period ending December 31, 2003 and (ii) for purposes of the
determination of the Fixed Charge Coverage Ratio for
the test period ending March 31, 2004, Borrower shall by permitted to
add back into the Consolidated EBITDA the non-recurring expenses related
to its unconsummated so-called "Recoton" acquisition in an amount not to
exceed $643,000."
(b) Immediately following Section 6.16 of the Loan Agreement,
there shall be added a new Section 6.17, that shall read as follows:
"Section 6.17. Minimum Consolidated EBITDA. Permit the
Consolidated EBITDA to be less than $2,500,000 for the fiscal quarter beginning
October 1, 2003 and ending December 31, 2003 on a non-cumulative basis."
3. Effects of Clarification. The Borrower acknowledges and agrees that
the amendment made pursuant to clause (a) of Section 2 above and the additional
requirements set forth in clause (b) of Section 2 above have been made to
clarify and establish certain financial covenants for the fiscal periods
therein specified and in no event shall be construed as the establishment of a
custom or course of dealing among the Borrower, the Agent or the Lenders with
respect to any current or future issue of the Borrower's non-compliance with any
term, condition or covenant set forth in this Loan Agreement or the other Loan
Documents.
4. References to Loan Agreement. This Amendment is an amendment to the
Loan Agreement. Unless the context of this Amendment otherwise requires, the
Loan Agreement and this Amendment shall be read together and shall have effect
as if the provisions of the Loan Agreement and this Amendment were contained in
one agreement.
5. Full Force and Effect. Except as expressly modified by this
Amendment, all of the terms and conditions of the Loan Agreement and the other
Loan Documents shall continue in full force and effect, and all parties hereto
shall be entitled to the benefits thereof. This Amendment is limited as written
and shall not be deemed (a) to be an amendment of or a consent under or waiver
of any other term or condition of the Loan Agreement, or (b) to prejudice any
right or rights which the Lender now has or may have in the future under or in
connection with the Loan Agreement or the other Loan Documents.
6. Conditions. This Amendment shall not be effective until the
following conditions precedent have been fulfilled to the satisfaction of the
Agent and the Lenders: (i) the Agent shall have received counterparts of this
Amendment duly executed by each of the parties hereto, and (ii) the Borrower
shall have paid the Agent (for ratable distribution to the Lenders) a
modification fee of $5,000 in consideration of the modification to the Loan
Agreement set forth herein. In addition, the Borrower agrees to pay upon
execution of this Amendment, all reasonable costs and expenses of the Agent and
each Lender, including, without limitation, the legal fees incurred by the
Agent's counsel in connection with the preparation, negotiation, execution and
delivery and review of this Amendment. In the event Borrower does not remit such
payment together with this executed Amendment, the Borrower hereby authorizes
the Agent, without notice to the Borrower, to charge any account of the Borrower
maintained by the Agent or its Affiliates in payment of the amounts due under
this Section 6.
7. Estoppel; Representations and Warranties. In order to induce the
Lenders to enter into this Amendment, the Borrower makes the following
representations and warranties, which representations and warranties shall
survive the execution and delivery hereof:
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(a) each of the Loan Agreement, the Notes, the Security Documents and
the other Loan Documents are in full force and effect;
(b) as amended hereby, each of the Loan Agreement, the Notes, the
Security Documents, the other Loan Documents and this Amendment have been duly
authorized, executed and delivered by the Borrower and constitute legal, valid
and binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms;
(c) the Borrower has no offset, defense or counterclaim with respect to
any of their obligations under the Loan Agreement, the Notes, the Security
Documents and the other Loan Documents (any such offset, defense or counterclaim
as may now exist being hereby irrevocably waived by the Borrower);
(d) no material adverse change in the financial condition of the
Borrower has occurred since the date of its most recent financial statements
delivered to the Lender;
(e) no Event of Default has occurred and is continuing under the Loan
Agreement or the other Loan Documents, and no event has occurred which, with
notice, lapse of time or both, would constitute such an Event of Default;
(f) except as discussed on SCHEDULE "A", all of the representations
made by or on behalf of the Borrower in the Loan Agreement and the other Loan
Documents are true and correct on and as of the date hereof;
(g) neither the execution and delivery of this Amendment by the
Borrower, nor consummation by the Borrower of the transactions contemplated
herein, nor compliance by the Borrower with the terms, conditions and provisions
hereof will conflict with or result in a breach of any of the terms, conditions
or provisions of (i) any Borrower's Certificate of Incorporation and By-Laws or
other organizational or governing document, (ii) any agreement or instrument to
which any Borrower is a party or by which the property of the Borrower is or may
be bound, (iii) any judgment or order, writ, injunction or decree of any court,
or (iv) any applicable law or governmental regulation; and
(h) no action of, or filing with, any governmental or public body or
authority is required to authorize, or is otherwise required in connection with
the execution, delivery and performance of this Amendment by the Borrower.
8. Security Interests. The Borrower confirms the validity and
effectiveness of the Security Documents made by the Borrower in favor of the
Agent (for the benefit of the Lenders) and confirms that the Security Documents
secures payment of the Obligations (as defined in the Security Documents).
9. Release of Collateral. In connection with the payment in full of
the Term Loans, the Agent (on behalf of the Lenders) shall release from the lien
and security interest created pursuant to the Intellectual Property Security
Agreements, the intellectual property itemized on the schedules attached thereto
(said intellectual property is herein referred to as the "Released Assets"). In
connection with said release, the Agent shall execute and deliver to the
Borrower such instruments of release and termination as the Borrower may
reasonably present to the Agent for execution and delivery. All of the cost and
expense related to the release contemplated herein (including, without
limitation, any and all filing or recordation fees) shall be bourne by the
Borrower. In connection with the release of the Released Assets, the Borrower
represents, warrants, acknowledges and agrees as follows: (i) notwithstanding
said release, all of the
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Released Assets remain subject to the restrictions set forth in Section 6.2 and
6.5 of the Loan Agreement and (ii) in connection with the enforcement of any
rights or remedies of the Agent or any Lender under the Security Agreement, the
Borrower hereby waives any right it may have to challenge the disposition of any
Collateral based on infringement or dilution of any IP Right (as defined in the
Intellectual Property Security Agreements) pursuant to, and to the fullest
extent provided under, applicable law.
10. Governing Law. This Amendment, including the validity thereof and
the rights and obligations of the parties hereunder, shall be construed in
accordance with and governed by, the laws of the State of New Jersey without
regard to any conflicts of laws principles.
11. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original,
and all which when taken together shall constitute one and the same agreement.
[Signatures on following pages]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.
Borrower:
XXXXXXX RADIO CORP
By: /s/ XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: EVP, CEO
MAJEXCO IMPORTS, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: EVP, CEO
XXXXXXX RADIO (HONG KONG)
LIMITED
By: /s/ XXXXXXXX X. XXXXXX
----------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Chairman & CEO
XXXXXXX RADIO INTERNATIONAL LTD.
By: /s/ XXXXXXX X. XXXXX
----------------------------
Name: Xxxxxxx X. Xxxxx
Title: EVP, CEO
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AGENT:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
LENDERS:
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ XXXX X. XXXXXXXX
----------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
SOVEREIGN BANK,
as a Lender
By:
----------------------------
Name:
Title:
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AGENT:
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:
----------------------------
Name:
Title:
LENDERS:
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By:
----------------------------
Name:
Title:
SOVEREIGN BANK,
as a Lender
By: /s/ XXXXX X. XXXXXXXXXX
----------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Vice President
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