Exhibit 4(B)
THIRD AMENDMENT AND LIMITED WAIVER
TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT AND LIMITED WAIVER ("Amendment") is entered into as of
March 21, 1997, by and among UNITEL VIDEO, INC., a Delaware corporation having
its principal place of business at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 ("Borrower"), R SQUARED, INC., a California Corporation having its
principal place of business at 0000 Xxxxxxxx Xxxxxxxxx Xxxx, Xxx Xxxxxxx,
Xxxxxxxxxx 00000 ("Corporate Guarantor") and XXXXXX FINANCIAL, INC., a Delaware
corporation having an office at 000 Xxxx Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx
00000, as agent ("Agent") for Lender (as hereafter defined).
BACKGROUND
WHEREAS, Borrower, Corporate Guarantor, Agent and Xxxxxx Financial, Inc.
("Lender") are parties to an Amended and Restated Loan and Security Agreement
dated as of December 12, 1995, as amended by First Amendment ("First Amendment")
and Limited Waiver dated November 26, 1996 and Second Amendment ("Second
Amendment") dated February 24, 1997 (as it may be further amended, supplemented
or otherwise modified from time to time, the "Loan Agreement") pursuant to which
Lender provided Borrower with certain financial accommodations; and
WHEREAS, certain Events of Default continue to be in existence under the
Agreement as set forth in (i) that certain letter from Agent to Borrower dated
January 2, 1997 and (ii) that certain letter from Agent to Borrower dated
January 7, 1997 (the "Existing Events of Default") and, as a result of such
Events of Default, Agent and Lenders have been, among other things, charging the
Default Rate on the Obligations; and
WHEREAS, pursuant to the Second Amendment, Agent and Lenders agreed with
Borrower to waive the Existing Events of Default conditioned on the reduction to
zero of an outstanding overadvance (the "Overadvance") by February 7, 1997; and
WHEREAS, Borrower has failed to reduce the Overadvance in accordance with
the Second Amendment and therefore the Existing Events of Default remain
outstanding; and
WHEREAS, Borrower and Corporate Guarantor have requested that Agent and
Requisite Lenders waive the Existing Events of Default; and
WHEREAS, Borrower and Corporate Guarantor have requested that Agent and
Requisite Lenders amend the Loan Agreement to, among other things, defer the
principal payment due date of Term Loan B
from February 28, 1997 to June 30, 1997, and Agent and Requisite Lenders have
agreed to do so, subject to the following terms and conditions; and
NOW, THEREFORE, in consideration of any loan or advance or grant of credit
heretofore or hereafter made to or for the account of Borrower by Lender, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall
have the meanings given to them in the Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 4 below, the defined term "Scheduled
Installment of Term Loan B" set forth in Section 2.1(A)(2) of the Loan Agreement
is hereby amended in its entirety to provide as follows:
"Scheduled Installment of Term Loan B" means the principal installment in
an amount equal to $4,651,660.27, payable, subject to the provisions of
subsection 2.4(B), on or before June 30, 1997, or the earlier to occur of
(i) the Termination Date or (ii) acceleration of the Obligations in
accordance with the provisions of subsection 8.3, at which time the entire
unpaid principal amount thereof plus accrued interest thereon shall be due
and payable.
3. Limited Waiver. Agent and Lender hereby waive (i) the Existing Events
of Default (which waiver shall be deemed effective as of November 30, 1996) and
(ii) compliance with Section 6.5 of the Loan Agreement which section requires
Borrower to maintain Excess Availability of at least $250,000, conditioned on
the following: (i) that for the period between March 21, 1997 and May 1, 1997,
the outstanding principal amount of the Revolving Loan shall not exceed the
Maximum Revolving Loan Amount by an amount greater than $1,000,000, (ii) on and
after May 2, 1997, the Maximum Revolving Loan Amount shall be greater than or
equal to the outstanding principal amount of the Revolving Loan and (iii) for so
long as the outstanding principal amount of the Revolving Loan exceeds the
Maximum Revolving Loan Amount, (A) the Revolving Loan and all other Obligations
shall bear interest at a rate equal to two percent (2% plus the applicable
Interest Rate and (B) Borrower may not request any LIBOR Rate Loans and Borrower
may not convert any Base Rate Loans into LIBOR Rate Loans. Borrower's
compliance with the terms above shall not be deemed to constitute a commitment
by Agent or Lenders to provide advances under the Revolving Loan that exceed the
Maximum Revolving Loan Amount. This limited waiver shall not be deemed to
constitute a waiver of any other existing Events of Default or any future breach
of the Agreement or any of the other Loan Documents. In the event Borrower
fails to raise
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$1,000,000 by May 1, 1997, whether by sale or lease of equipment or
otherwise, Borrower shall pay Lender a fee equal to $50,000.
4. Conditions of Effectiveness. This Amendment shall become effective
when and only when Agent shall have received (a) four (4) copies of this
Amendment executed by Borrower and Corporate Guarantor and (b) such other
certificates, instruments, documents, agreements and opinions of counsel as may
be required by Agent or its counsel, each of which shall be in form and
substance satisfactory to Lender and its counsel.
5. Representations and Warranties. Borrower hereby represents and
warrants as follows:
(a) This Amendment and the Agreement, as amended hereby, constitute
legal, valid and binding obligations of Borrower and are enforceable
against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby are correct in all
material respects and agree that all such covenants, representations and
warranties shall be deemed to have been remade as of the effective date of
this Amendment.
(c) Other than the Existing Events of Default, no Event of Default or
Default has occurred and is continuing or would exist after giving effect
to this Amendment.
(d) Borrower has no defense, counterclaim or offset with respect to
the Loan Agreement.
6. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference in the
Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of
like import shall mean and be a reference to the Loan Agreement as amended
hereby.
(b) Except as specifically amended herein, the Loan Agreement, and
all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
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(c) Except as specifically provided herein, the execution, delivery
and effectiveness of this Amendment shall not operate as a waiver of any right,
power or remedy of Agent or Lender, nor constitute a waiver of any provision of
the Loan Agreement, or any other documents, instruments or agreements executed
and/or delivered under or in connection therewith.
7. Governing Law. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns and
shall be governed by and construed in accordance with the laws of the State of
New York.
8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. Counterparts. This Amendment may be executed by the parties hereto in
one or more counterparts, each of which shall be deemed an original and all of
which taken together shall be deemed to constitute one and the same agreement.
Any signature received by facsimile transmission shall be deemed an original
signature hereto.
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and
year first written above.
UNITEL VIDEO, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: Chief Executive Officer
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R SQUARED, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title: Chief Executive Officer
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XXXXXX FINANCIAL, INC., as Agent and
Lender
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Vice President
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