EXHIBIT 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
October 2, 2002, is entered into among (1) POINT.360, a California corporation
(the "Borrower"), (2) the Lenders party to the Credit Agreement referred to
below and (3) UNION BANK OF CALIFORNIA, N.A., as administrative agent for such
Lenders (in such capacity, the "Agent").
RECITALS
A. The Borrower, the Lenders and the Agent previously entered into that
certain Third Amended and Restated Credit Agreement dated as of May 2, 2002 (the
"Credit Agreement"). Capitalized terms used herein and not defined shall have
the meanings assigned to them in the Credit Agreement.
B. The Borrower has informed the Agent and the Lenders that R. Xxxx
Xxxxxxxx desires to resign as an officer of the Borrower and, in connection
therewith, sell all of his Capital Stock in the Borrower. Section 7(k)(ii) of
the Credit Agreement requires that R. Xxxx Xxxxxxxx own stock representing at
least 14% of the votes that may be cast in an election of directors of the
Borrower, at all times. The Borrower has asked the Lenders to waive such
provision and the Lenders have agreed, subject to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. Amendment to Credit Agreement. The Credit Agreement is hereby
amended as follows:
(a) Section 7(k)(ii) is deleted and replaced with "[Intentionally
omitted]".
SECTION 2. Conditions Precedent. This Amendment shall become effective
as of the date first set forth above upon receipt by
the Agent of the following:
(a) this Amendment, duly executed by the Borrower and the Majority
Lenders;
(b) evidence of the Guarantors' consent to this Amendment,
substantially in the form of Exhibit A hereto;
(c) an amendment fee, in the amount of $20,000, in immediately
available funds, to be shared pro rata by each Lender executing
this Amendment;
(d) a prepayment of the Loans, in immediately available funds, in the
principal amount of at least $500,000; and
(e) copies of the following agreements relating to R. Xxxx Xxxxxxxx'x
separation from the Borrower, in each case in form and substance
reasonably satisfactory to the Majority Lenders: the Resignation
and General Release Agreement, the Consulting Agreement and the
Noncompetition Agreement.
SECTION 3. Reference to and Effect on the Credit Agreement and the Other
Loan Documents.(a) Upon the effectiveness of this Amendment, each reference in
the Credit Agreement to "this Agreement," "hereunder," "hereof" or words of like
import referring to the Credit Agreement, and each reference in the other Loan
Documents to "the Credit Agreement," "thereunder," "thereof" or words of like
import referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended hereby.
(b) Except as specifically amended herein, the Credit Agreement and
all other Loan Documents are and shall continue to be in full
force and effect and are hereby in all respects ratified and
confirmed.
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(c) The execution, delivery and effectiveness of this Amendment shall
not operate as a waiver of any right, power or remedy of the Agent
or the Lenders under the Credit Agreement or any other Loan
Documents, nor constitute a waiver of any provision of the Credit
Agreement or any other Loan Documents, except as specifically set
forth herein.
SECTION 4. Representations and Warranties. The Borrower hereby
represents and warrants, for the benefit of the Lenders and the Agent, as
follows: (i) the Borrower has all requisite power and authority under applicable
law and under its charter documents to execute, deliver and perform this
Amendment, and to perform the Credit Agreement as amended hereby; (ii) all
actions, waivers and consents (corporate, regulatory and otherwise) necessary or
appropriate for the Borrower to execute, deliver and perform this Amendment, and
to perform the Credit Agreement as amended hereby, have been taken and/or
received; (iii) this Amendment, and the Credit Agreement, as amended by this
Amendment, constitute the legal, valid and binding obligation of the Borrower
enforceable against it in accordance with the terms hereof; (iv) the execution,
delivery and performance of this Amendment, and the performance of the Credit
Agreement, as amended hereby, will not (a) violate or contravene any material
Requirement of Law, (b) result in any material breach or violation of, or
constitute a material default under, any agreement or instrument by which the
Borrower or any of its property may be bound, or (c) result in or require the
creation of any Lien upon or with respect to any properties of the Borrower,
whether such properties are now owned or hereafter acquired; (v) the
representations and warranties contained in the Credit Agreement and the other
Loan Documents are correct in all material respects on and as of the date of
this Amendment, before and after giving effect to the same, as though made on
and as of such date; and (vi) no Default has occurred and is continuing.
SECTION 5. Execution in Counterparts. This Amendment 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 to be
an original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 6. Governing Law. This Amendment shall be governed by, and
construed and interpreted in accordance with, the laws of the State of
California (without reference to its choice of law rules).
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
POINT.360
By: /s/ Xxxx X. Steel
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Name: Xxxx X. Steel
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Title: Chief Financial Officer
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UNION BANK OF CALIFORNIA, N.A.,
as Agent and as a Lender
By: /s/ Xxxxx X. XxXxxx
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Name: Xxxxx X. XxXxxx
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Title: Vice President
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BANK OF THE WEST
(formerly United California Bank),
as a Lender
By:
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Name:
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Title:
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U.S. BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: Vice President
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Exhibit A
GUARANTORS' CONSENT
Each of the undersigned is a "Guarantor" under that certain Second
Amended and Restated Guaranty dated as of September 28, 2000, as amended by the
First Amendment to Second Amended and Restated Guaranty dated as of May 2, 2002
(the "Guarantee") made by the undersigned in favor of Union Bank of California,
N.A., as agent (the "Agent") for the benefit of the lenders referred to below,
which Guarantee was delivered pursuant to that certain Credit Agreement dated as
of even date therewith among Point.360 (the "Borrower"), the lenders referred to
therein (the "Lenders"), and the Agent (as amended, the "Credit Agreement").
In connection herewith, the Credit Agreement is being amended by that
certain First Amendment dated as of even date herewith (the "Amendment"). Each
Guarantor hereby acknowledges that it has received a copy of the Amendment. Each
Guarantor hereby consents to the Amendment, and hereby confirms and agrees that
the Guarantee is and shall continue to be in full force and effect and is hereby
ratified and confirmed in all respects except that, on and after the effective
date of the Amendment, each reference in the Guarantee to "the Credit
Agreement," "thereunder," "thereof," "therein" or words of like import referring
to the Credit Agreement shall mean and be a reference to the Credit Agreement,
as amended by the Amendment.
Dated: October 2, 2002 MULTI-MEDIA SERVICES, INC.
By: /s/ Xxxx X. Steel
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Name: Xxxx X. Steel
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Title: Secretary
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VDI MULTIMEDIA, INC.
By: /s/ Xxxx X. Steel
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Name: Xxxx X. Steel
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Title: Secretary
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