Exhibit 10.25
AMENDMENT NO. 1 TO REVOLVING
CREDIT LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 1 TO REVOLVING CREDIT LOAN AND SECURITY
AGREEMENT (this "Amendment") is entered into as of March 25, 1998, by and
between (i) UNAPIX ENTERTAINMENT, INC., a Delaware corporation ("Unapix"),
and MIRAMAR IMAGES, INC., a Washington corporation ("Miramar"; and together
with Unapix, collectively the "Borrowers"), and (ii) IMPERIAL BANK, a
California chartered bank (the "Bank"), with respect to the following facts:
A. Pursuant to the terms of that certain Revolving Credit Loan and
Security Agreement dated as of April 16, 1997 (the "Loan Agreement"), by and
among the Borrowers, A Pix Entertainment, Inc., a New York corporation ("A
Pix"), and the Bank, the Bank has heretofore made available to the Borrowers
and A Pix a revolving credit facility in an aggregate amount not to exceed
$7,000,000. Capitalized terms not expressly defined herein shall have the
respective meanings ascribed thereto in the Loan Agreement.
B. A Pix has heretofore merged with and into Unapix; and as a result
thereof Unapix has (1) succeeded to all assets and properties of A Pix
subject to the security interests of the Bank therein pursuant to the Loan
Documents, and (ii) assumed all liabilities and obligations of A Pix
(including, without limitation, all Obligations of A Pix to the Bank pursuant
to and/or in connection with the Loan Documents).
C. The Borrowers have requested the Bank to (i) increase the amount of
the Commitment from $7,000,000 to $10,000,000, (ii) change the Tier 1
Borrowing Base Component and Tier 4 Borrowing Base Component percentages, and
(iii) formally consent to the issuance by Unapix (a) during the fourth
calendar quarter of 1997, of $1,300,000 of certain convertible notes, and (b)
on February 19, 1998, of $5,250,000 of certain convertible subordinated notes.
D. The Bank is willing to agree to the foregoing subject to the terms
and conditions contained herein.
NOW, THEREFORE, in consideration of the above facts and the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:
1. AMENDMENTS
1.1. Definitions. Section 1 of the Loan Agreement is hereby
amended by adding thereto the following definition:
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"`1998 Convertible Notes' shall mean the 10% Convertible
Subordinated Notes in an aggregate principal amount not
to exceed $5,250,000, due June 30, 2003, issued by
Unapix, the terms of which have been reviewed and
approved in writing by the Bank."
1.2 Increase In Committment. Section 2.1.1 of the Loan
Agreement is hereby amended and restated to read in its entirety as
follows:
"2.1.1 Commitment. To the Borrower, in the form of
Advances and Letters of Credit by way of a revolving credit
facility (the "Facility) in the aggregate sum owing hereunder
of up to Ten Million Dollars ($10,000,000) (the "Commitment")
from time to time during the period (the "Availability
Period") commencing on the execution date hereof and expiring
on September 30, 1998; provided, however, that subject to
Section 2.1.2 hereof, at no time shall the sum of all
Advances and all undrawn amounts under all Letters of Credit
at any time outstanding under the Facility exceed the lesser
of (i) the Commitment, or (ii) the then current amount of the
Borrowing Base; provided, further, however, that the
aggregate sum of all undrawn amounts under Standby Letters of
Credit shall not at any time exceed the Standby Letters of
Credit Sublimit. Subject to the terms and conditions of this
Agreement, the Borrowers may borrow, repay and reborrow
amounts constituting the Commitment. Notwithstanding
anything herein to the contrary, no Letter of Credit shall
remain outstanding after the Final Repayment Date."
1.3 Promissory Note.
1.3.1 The first sentence of Section 2.6 of the Loan
Agreement is hereby amended and restated to read in its
entirety as follows:
"The Principal (and Interest thereon) owing to the Bank
under the Facility shall be evidenced by an Amended and
Restated Promissory Note (hereinafter the 'Note')
executed by the Borrowers and payable to the Bank in the
face amount of the Commitment."
1.3.2 As soon as practicable following the Borrowers'
compliance with each of the conditions precedent set forth in
Section 3 hereof, the Bank shall return to the Borrowers the
existing $7,000,000 Promissory Note dated April
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16, 1997, previously executed by the Borrowers in favor of the
Bank.
1.4 Tier 1 Borrowing Base Component. Section 3.1.1 of the Loan
Agreement is hereby amended by changing the Tier 1 Borrowing Base Component
percentage from "55%" to "65%."
1.5 Tier 4 Borrowing Base Component. Section 3.1.4 of the Loan
Agreement is hereby amended by (i) changing the Tier 4 Borrowing Base
Component percentage from "50%" to "75%", and (ii) adding the following
proviso at the end of said Section: "provided, however, that in no event
shall the aggregate amount of the Tier 4 Borrowing Base Component exceed
$3,000,000;".
1.6 Commitment Fees. Section 4.3 of the Loan Agreement is
hereby amended and restated to read in its entirety as follows:
"4.3 Commitment Fees. The Borrowers shall pay to the
Bank a non-refundable commitment fee (the "Commitment
Fee") equal to one-half percent (1/2%) per annum on the
greater of (i) the average unused portion of the first
$7,000,000 of the Commitment, and (ii) the average
unused portion of the Borrowing Base (i.e. that portion
of the Borrowing Base which is not used to borrow
Advances or issue Letters of Credit). The Commitment
Fee shall be calculated and payable quarterly in
arrears on the first Business Day of each calendar
quarter and on the Final Repayment Date. For purposes
of calculation of the Commitment Fee, the aggregate
undrawn amount of all outstanding Letters of Credit
shall be considered part of the used portions of the
Commitment."
1.7 Permitted Indebtedness.
1.7.1 Section 10.3.8 of the Loan Agreement is hereby
amended by changing the dollar amount "$1,000,000" to
"$2,300,000".
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1.7.2 Section 10.3 of the Loan Agreement is hereby
amended by adding thereto a new Subsection 10.3.17 which shall
read in its entirety as follows:
"10.3.17 the Indebtedness evidenced by the 1998
Convertible Notes."
1.8 Modification Covenant. Section 10.9 of the Loan Agreement
is hereby amended and restated to read in its entirety as follows:
"10.9 Prohibition of Modifications. Modify or
permit or suffer to occur any Modification (i) to any
License Agreement underlying any receivable included in the
Borrowing Base, (ii) to the Variable Rate Notes, the 1996
Convertible Notes, the 1997 Convertible Notes, or the 1998
Convertible Notes, or (iii) to any other agreement to which
any Borrower is a party or which requires the consent or
approval of any Borrower to Modify that would materially and
adversely (a) affect the condition (financial or otherwise)
of any Borrower, (b) lessen the ability of any Borrower to
perform its obligations under any Loan Document, (c) lessen
any of the rights granted to the Bank under any Loan
Document, (d) affect the Collateral, and/or (e) affect the
Bank's interest in any of the Collateral."
1.9 Restricted Payments Covenant. Section 10.17 of the Loan
agreement is hereby amended as follows:
1.9.1 Sections 10.17.2 and 10.17.3 of the Loan Agreement
are hereby amended by adding the phrase "and 1998 Convertible
Notes" immediately following the phrase" and 1997 Convertible
Notes" appearing in each of said Sections; and
1.9.2 The last paragraph of Section 10.17 of the Loan
Agreement is hereby amended by adding the phrase "and 1998
Convertible Notes" immediately following each phrase "and 1997
Convertible Notes" appearing in said paragraph.
1.10. Events of Default. Section 11.4 of the Loan Agreement
is hereby amended and restated to read in its entirety as follows:
"11.4 A default or breach (without
regard to any notice or period of cure) with respect
to the
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payment of any indebtedness for borrowed money of any
Borrower to any third party (including, the Variable Rate
Notes, the 1996 Convertible Notes, the 1997 Convertible
Notes, and the 1998 Convertible Notes) when due or in the
performance of any other obligation incurred in connection
with any such indebtedness for borrowed money by any
Borrower which accelerates (or permits the acceleration of)
any such indebtedness in an amount not less than $250,000 or
would have a material adverse effect upon the Collateral or
any Borrower's ability to fully and timely perform all of
its obligations under the Loan Documents."
2. REPRESENTATIONS AND WARRANTIES.
2.1 Representations and Warranties. For the purpose of inducing
the Bank to enter into this Amendment, the Borrowers hereby jointly and
severally represent and warrant to the Bank that as of the date hereof and
as of each Drawdown Date including, without limitation, as of the date of
each Advance under the increased Commitment (except to the extent that any
such representation or warranty expressly relates to an earlier date):
2.1.1 Each of the representations and warranties of the
Borrowers contained in the Loan Agreement and in any and all other
Loan Documents is or was (as the case may be) true and correct on and
as of the date given with the effect as though such representations
and warranties had been made on and as of such date;
2.1.2 No Event of Default or Potential Event of Default
has occurred and is continuing;
2.1.3 Each of the Borrowers is duly authorized to enter
into this Amendment, the Note (i.e. the Amended and Restated
Promissory Note to be executed by the Borrowers pursuant to Section
3.1.1 hereof) and consummate the transactions herein contemplated and
has the requisite power, authority and legal right to execute, deliver
and perform this Amendment, such Note and the other documents and
transactions contemplated herein, and has taken all necessary action
to authorize it's execution, delivery and performance of this
Amendment, such Note and such other documents and transactions as
contemplated herein; and
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2.1.4 The consummation of the transactions herein
contemplated and the fulfillment of the terms hereof and the
compliance by the Borrowers with all of the terms and conditions of
this Amendment and the other documents herein provided will not result
in any breach of any of the terms, conditions or provisions of, or
constitute a default under, or violate, any indenture, bank loan,
credit agreement or other agreement or instrument, or existing law or
judgment, to which either or both of the Borrowers is a party or by
which they or any of their assets is bound, nor will it result it in
the creation of any Encumbrance upon any of their properties or assets
pursuant to the provisions of any such indenture, bank loan, credit
agreement or other agreement or instrument, nor are any of the
Borrowers prohibited by their articles of incorporation, by-laws or
any indenture or other agreement, nor does it require any approval or
consent of any Person that has not otherwise been obtained as of the
date hereof; and that this Amendment, the Note and each additional
instrument and document required hereunder when executed and delivered
by the Borrowers will constitute the legal, valid and binding
obligation of the Borrowers enforceable against them in accordance
with its terms.
2.2 Survival of Representations and Warranties.
All warranties and representations herein shall survive the
execution of this Amendment and the consummation of the transactions
contemplated herein.
3. CONDITIONS PRECEDENT.
3.1 The provisions of Section 1 hereof shall not become
effective, and the Bank shall not be under any obligation to make any
Advances under the contemplated increase in the Commitment until the
Borrowers shall have complied with each of the following conditions
precedent to the satisfaction of the Bank in its sole and absolute
discretion, unless otherwise waived by the Bank in writing in its sole and
absolute discretion:
3.1.1 Amended and Restated Note.
Delivery to the Bank of the Note duly executed by each
Borrower in the form of Exhibit 1 attached hereto;
3.1.2 Supporting Documents of Borrowers.
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Delivery to the Bank of a certificate of a senior executive
officer of each Borrower acceptable to the Bank in substance and form
satisfactory to the Bank (including, without limitation, certification
by such officer of each Borrower that attached thereto is a true and
correct complete copy of resolutions of the Board of Directors or the
Executive Committee thereof (and if applicable, the shareholders) of
such Borrower approving and authorizing the execution, delivery and
performance of this Amendment and the other documents and transactions
contemplated herein, including, but not limited to, the Amended and
Restated Note);
3.1.3 Good Standing Certificates.
Delivery to the Bank of a good standing certificate, dated
as of a recent date, issued by the Office of the Secretary of State of
(i) the jurisdiction of incorporation of each Borrower, and (ii) each
additional State where any Borrower is qualified to transact business
as a foreign corporation (or the failure to so qualify could have a
material adverse effect on any Borrower or any of the Collateral);
3.1.4 Payment of Loan Fee.
The Borrowers shall pay to the Bank in consideration of the
increase in the Commitment provided for herein, a non-refundable
loan fee of $25,000;
3.1.5 Closing Costs.
The Borrowers shall have paid to the Bank all Costs incurred
by the Bank in connection with the negotiation, review and preparation
of this Amendment, the Amended and Restated Note, any other Loan
Documents and the various transactions contemplated herein and
therein; and
3.1.6 Compliance.
The Borrowers shall have complied and then be in compliance
with all terms, covenants and conditions of the Loan Agreement.
4. ACKNOWLEDGEMENTS.
Each Borrower hereby acknowledges that (a) it has been advised by
counsel in the negotiation, execution and delivery of this Amendment and the
transactions contemplated hereby; (b) it has made an independent decision to
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enter into this Amendment without reliance on any representation, warranty or
covenant or undertaking by the Bank other than as expressly set forth in this
Amendment; and (c) should any shortfall occur between such Borrower's financing
needs and the Commitment, as amended by this Amendment, such shortfall shall be
the sole responsibility of such Borrower and such Borrower shall not make any
claim against the Bank based on any facts, events or circumstances now or
hereafter existing.
5. MISCELLANEOUS.
5.1 All references in the Loan Agreement and in any other
Loan Document to the "Loan Agreement," "this Agreement", the "Note"
and/or "Loan Documents" (or words of similar import) shall be deemed a
reference to the Loan Agreement as amended by this Amendment and/or
shall include the Note to be executed by the Borrowers pursuant to
Section 3.1.1 hereof, as the case may be.
5.2 Except as expressly modified, amended or restated by this
Amendment and the Amended and Restated Note, all of the terms and
conditions of the Loan Agreement, as so modified or amended and the
additional Loan Documents shall remain in full force and effect.
5.3 This Amendment shall be subject to, construed in
accordance with and governed by the laws of the State of
California without giving effect to such state's conflicts of law
provisions.
5.4 This Amendment may be executed in one or more
counterparts, each of which shall constitute an original
Amendment, but all of which together shall constitute one and the
same instrument.
5.5 Section headings are included for the sake of convenience
only and shall not affect the interpretation of any provision of
this Amendment.
5.6 This Amendment and the other documents referred to herein
are intended by the Borrowers and the Bank to be the final,
complete and exclusive expression of the agreement between them.
This Amendment supersedes any and all prior oral or written
agreements relating to the subject matter hereof.
5.7 Whether or not the transactions contemplated herein shall
be consummated, the Borrowers jointly and severally agree to pay
all costs incurred by or on behalf of the Bank in connection with
the transactions hereby contemplated (including, without
limitation,
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the performance of any due diligence by the Bank) and the preparation,
negotiation, execution, delivery, waiver, Modification and/or
administration of this Amendment, the Note and any other documentation
contemplated hereby or thereby, the making of additional Advances
and/or the enforcement or protection of the rights of the Bank in
connection therewith, including, without limitation, any internally
allocated audit costs and the fees and disbursements of Xxxxxxxx,
Xxxxxxxxxx & Xxxxx LLP, counsel to the Bank.
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IN WITNESS WHEREOF the parties hereto have executed this Amendment as
of the date first above written.
IMPERIAL BANK,
a California chartered bank
By:________________________________
Its:_______________________________
UNAPIX ENTERTAINMENT, INC.,
a Delaware corporation
By:________________________________
Its:_______________________________
MIRAMAR IMAGES, INC.,
a Washington corporation
By:________________________________
Its:_______________________________
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