NEWSTAR MEDIA INC.
0000 XXXXXXX XXXXXXXXX
XXX XXXXXXX, XXXXXXXXXX 00000
July 1, 0000
Xxx Xxxxx Xxxxxxxxx Bank
000 Xxxx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Credit, Security, Guaranty and Pledge Agreement, dated as of
November 4, 1997 among Dove Entertainment, Inc., the Corporate
Guarantors named therein and The Chase Manhattan Bank (as
amended, the "Credit Agreement")
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Ladies and Gentlemen:
Pursuant to Section 2.14 of the Credit Agreement referenced above, The Chase
Manhattan Bank has issued the following Letters of Credit (the "Guaranteed
L/C's"):
L/C Number Issue Date Beneficiary Amount
---------- ---------- ----------- ------
5-362650 April 17, 1998 Amwest Surety US$174,703.11
Insurance Company
5-364581 May 6, 1998 Amwest Surety US$286,649.00
Insurance Company
Capitalized terms used herein and not otherwise defined herein shall have the
meanings given such terms in the Credit Agreement.
NewStar Media Inc., formerly known as Dove Entertainment, Inc. (the "Borrower"),
and each of the Individual Guarantors hereby requests that, in consideration of
the guaranty by Messrs. Xxxxx, Xxxxxx and Xxxxxxxxxx of the Borrower's
obligations under and with respect to the Guaranteed L/C's as provided below,
The Chase Manhattan Bank (the "Lender") consent to the following: (i) for
purposes of each Guaranty Agreement, the term "Guaranteed Obligations" exclude
the Guaranteed L/C Obligations (as hereinafter defined) and (ii) each Individual
Guarantor having no liability under its respective Guaranty Agreement for the
Guaranteed L/C Obligations.
As an inducement to the Lender to consent to the foregoing, each of Xxxxxxxx
Xxxxx, Xxx Xxxxxx and Xxxxxx Xxxxxxxxxx (the "L/C Guarantors") agree as follows:
1. The L/C Guarantors, jointly and severally, unconditionally and
irrevocably guarantee (the "L/C Guaranty") the due and punctual payment
by the Borrower of all of the Borrower's obligations with respect to
the Guaranteed L/C's, as and when such shall become due and payable
(the "Guaranteed L/C Obligations").
2. In furtherance of the provisions of the L/C Guaranty, and not in
limitation of any other right which the Lender may have at law or in
equity against the Borrower or any other guarantor of the Guaranteed
L/C Obligations, upon failure of the Borrower to pay any of the
Guaranteed L/C Obligations when and as the same shall become due,
whether at maturity, by acceleration, after notice or otherwise, the
L/C Guarantors hereby promise to and will, upon receipt of written
demand by the Lender, forthwith pay or cause to be paid to the Lender
in cash an amount equal to the unpaid balance of the Guaranteed L/C
Obligations then due and payable.
3. The L/C Guarantors, to the extent permitted by applicable law, waive
presentation to, demand for payment from and protest to the Borrower
and also waive notice of protest for nonpayment, notice of acceleration
and notice of intent to accelerate. The obligations of the L/C
Guarantors hereunder shall not be affected by (i) the failure of the
Lender to assert any claim or demand or to enforce any right or remedy
against the Borrower or any other guarantor of the Guaranteed L/C
Obligations; (ii) any extension or renewal of any provisions of the
Guaranteed L/C's; (iii) any recession, waiver, compromise,
acceleration, amendment or modification of any of the terms or
provisions; (iv) the release, exchange, waiver or foreclosure of any
security held by the Lender for the Guaranteed L/C Obligations; or (v)
the failure of the Lender to exercise any right or remedy against any
other Guarantor of the Guaranteed L/C Obligations.
4. The L/C Guarantors further agree that this guaranty is a continuing
guaranty and constitutes a guaranty of performance and of payment when
due and not just of collection, and waives, to the extent permitted by
applicable law, any right to require that any resort be had by the
Lender to any security held for payment of the Guaranteed L/C
Obligations or to any balance of any deposit, account or credit on the
books of the Lender in favor of the Borrower or any other guarantor or
to any other person.
5. The L/C Guarantors hereby expressly assume all responsibilities to
remain informed of the financial condition of the Borrower and each
other guarantor of the Guaranteed L/C Obligations and the ability of
the Borrower to perform under the Guaranteed L/C's.
6. This guaranty shall not be affected by the genuineness, validity,
regularity or enforceability of the Guaranteed L/C Obligations or any
other instrument evidencing any of the Guaranteed L/C Obligations, or
by the existence, validity, enforceability, perfection or extent of any
collateral therefor or by any other circumstance relating to the
Guaranteed L/C Obligations which might otherwise constitute a defense
to the guaranty under this guaranty.
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7. The obligation of the L/C Guarantors hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason,
including, without limitation, any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to any defense
(other than payment of the Guaranteed L/C Obligations) or set-off,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality or unenforceability of the Guaranteed L/C
Obligations or otherwise. Without limiting the generality of the
foregoing, the obligations of the L/C Guarantors hereunder shall not be
discharged or impaired or otherwise affected by the failure of the
Lenders to assert any claim or demand or to enforce any remedy with
respect to the Guaranteed L/C's, by any waiver or modification of any
provision thereof, by any default, failure, or delay, willful or
otherwise, in the performance of the Guaranteed L/C Obligations, or by
any other act or thing, or omission or delay to do any other act or
thing, which may or might in any manner or to any extent vary the risk
of the L/C Guarantors or would otherwise operate as a discharge of the
L/C Guarantors as a matter of law, unless and until the Guaranteed L/C
Obligations are paid in full.
8. The L/C Guarantors further agree that the guaranty hereunder shall
continue to be effective or be reinstated, as the case may be, if at
any time payment, or any part thereof, of principal of or interest on
any Guaranteed L/C Obligation is rescinded or must otherwise be
restored by the Lender upon the bankruptcy or other reorganization of
the Borrower or any other guarantor of the Guaranteed L/C Obligations
or otherwise.
9. To the extent of payments received by the Lender from the L/C
Guarantors on the Guaranteed L/C Obligations, the L/C Guarantors shall
be subrogated to the rights of the Lenders to receive payments or
distributions of cash, property or securities of the Borrower
applicable to the Guaranteed L/C Obligations; provided, that all such
rights of subrogation shall be subordinated and junior in right of
payment to the prior payment in full of all Obligations to the Lender.
10. The provisions of Sections 2 and 4.1 through 4.9, inclusive, of the
Guaranty Agreements of Messrs. Xxxxx, Xxxxxx and Lightstone are
incorporated by reference herein with regard to the Guaranteed L/C
Obligations as if set forth in their entirety therein.
Each of the Individual Guarantors, Media Equities International LLC ("MEI") and
the Lender hereby agree that upon the release of the Guaranteed L/C Obligations
from the Guaranty Agreements in accordance herewith, the Borrower may request a
Loan under the Credit Agreement in an amount equal to the L/C Exposure of the
Guaranteed L/C's and no further approval for the making of such Loan shall be
required by any Individual Guarantor, MEI or the Lender, including, without
limitation, approval under Section 2.2(c) of the Credit Agreement, any Guaranty
Agreement or any agreement between or among the Individual Guarantors.
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By signing where indicated below, the Lender hereby agrees to the consent
requested above.
Sincerely,
/s/ XXXXXXXX X. XXXXX
NEWSTAR MEDIA INC. ----------------------------------------
DOVE FOUR POINT, INC. Xxxxxxxx X. Xxxxx
XXXX ENTERTAINMENT, INC.
DOVE AUDIO, INC.
NEWSTAR WORLDWIDE INC. /s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
By /S/ XXXX XXXXXX
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Xxxx Xxxxxx
Vice President and Chief
Financial Officer
/S/ XXX XXXXXXXXXX
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Xxxxxx Xxxxxxxxxx
/S/ XXXX XXXXX
----------------------------------------
Xxxx Xxxxx
/S/ XXXXX XXXXXX
----------------------------------------
Xxxxx Xxxxxx
MEDIA EQUITIES INTERNATIONAL, LLC
By: /S/ XXX XXXXXXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Partner
AGREED AND ACKNOWLEDGED
THE CHASE MANHATTAN BANK
By: /s/ XXXX X. XXXXX
-----------------------------------
Name: Xxxx X. Xxxxx III
Title: Managing Director
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