CONSENT REGARDING "LIMITATIONS ON INDEBTEDNESS" AND
"LIMITATIONS ON LIENS"
JULY 14, 1998
NewStar Media Inc.
0000 Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxx, Chief Financial Officer
Ladies and Gentlemen:
Reference is made to that certain Credit, Security, Guaranty and Pledge
Agreement dated as of November 4, 1997, as amended to the date hereof (said
Credit Agreement, as so amended, being the "Credit Agreement", the terms defined
therein being used herein as therein defined), among Dove Entertainment, Inc.
(now known as NewStar Media Inc.), a California corporation ("Borrower"), the
Guarantors named therein and The Chase Manhattan Bank, as Lender ("Lender").
Xxxxxxxx has informed Xxxxxx that Borrower desires to borrow from
Apollo Partners, LLC ("Apollo") and Apollo desires to lend to Borrower,
$1,500,000, such loan to be secured by a lien on all of the Borrower's real
property located at 0000 Xxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx (as such
real property is more fully described in that certain Deed of Trust (the "Deed
of Trust") dated April 24, 1996 in favor of Asahi Bank of California (the "Real
Property")) second in priority to the lien granted to Asahi Bank of California
under the Deed of Trust. At the request of Xxxxxxxx, Xxxxxx hereby consents to
the incurrence of Indebtedness by Xxxxxxxx in the amount of $1,500,000 from
Apollo (the "Apollo Indebtedness") and the granting of a Lien to Apollo on all
of the Real Property to secure repayment of the Apollo Indebtedness (such Lien
to be second in priority to the Lien granted to Asahi Bank of California under
the Deed of Trust); provided that the Apollo Indebtedness shall not bear
interest at a rate greater than 14% and shall be paid in full upon the sale of
the Real Property.
Without limiting the generality of the provisions of Section 12.8 of
the Credit Agreement, the consent set forth herein shall be limited precisely as
written and is provided solely for the purpose of permitting Borrower to borrow
from Apollo up to $1,500,000, with such Indebtedness being secured by a second
priority Lien on the Real Property without violating the provisions of Sections
6.1 or 6.2 of the Credit Agreement, and this Consent does not constitute, nor
should it be construed as, a waiver of compliance by Borrower with respect to
(i) Sections 6.1 or 6.2 of the Credit Agreement in any other instance or (ii)
any other term, provision or condition of the Credit Agreement or any other
instrument or agreement referred to therein (whether in connection with the
incurrence of the Apollo Indebtedness or otherwise).
In order to induce Lender to enter into this Consent, Borrower, by its
execution of a counterpart of this Consent, represents and warrants that after
giving effect to this Consent (a) no Default or Event of Default exists under
the Credit Agreement, (b) all representations and warranties contained in the
Credit Agreement are true, correct and complete in all material respects on and
as of the date hereof except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true, correct
and complete in all material respects on and as of such earlier date, and (c)
Borrower has performed all agreements to be performed on its part as set forth
in the Credit Agreement.
This Consent may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument. The consent set forth
herein shall become effective as of the date hereof upon the execution of
counterparts hereof by Xxxxxxxx, NewStar Worldwide Inc., Dove Four Point, Inc.,
NewStar Television Inc., Dove Entertainment, Inc., and Dove Audio Inc., and by
Lender and receipt by Xxxxxxxx and Xxxxxx of written or telephonic notification
of such execution and authorization of delivery thereof.
THIS CONSENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
THE CHASE MANHATTAN BANK
By: /s/ XXXXXX X. XXXXX
-------------------------------------
Title: Vice President
NEWSTAR MEDIA INC.
DOVE FOUR POINT, INC.
NEWSTAR WORLDWIDE INC.
NEWSTAR TELEVISION INC.
DOVE ENTERTAINMENT, INC.
DOVE AUDIO, INC.
By: /s/ XXXX XXXXXX
-------------------------------------
Title: Vice President and
Chief Financial Officer
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