SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 10.27.6
SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Seventh Amendment to Loan and Security Agreement (this “Amendment”) is dated as of the
13th day of July, 2009, by and among XXXXXXX RADIO CORP. (“ERC US”), a Delaware corporation,
XXXXXXX RADIO MACAO COMMERCIAL OFFSHORE LIMITED (“ER Macao”), a Macao corporation, MAJEXCO
IMPORTS, INC. (“MI”), a California corporation,
XXXXXXX RADIO (HONG KONG) LIMITED (“ER Hong Kong”),
a Hong Kong corporation, and XXXXXXX RADIO INTERNATIONAL LTD. (“ER BVI”), a British Virgin Island
company, jointly and severally as co-borrowers and co-obligors, except as set forth in Section
11.8 of the Loan Agreement, as defined below (collectively, the
“Borrowers” and each is
referred to individually herein as a “Borrower”), and WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (together with its successors and assigns, “Bank”).
BACKGROUND
A. Borrowers and Bank are parties to a certain Loan and Security Agreement
dated as of December 23, 2005 (as the same has been and may be amended or otherwise modified
from time to time, the “Loan Agreement”), and the other Loan Documents (as defined in the Loan
Agreement), Capitalized terms used herein and not otherwise defined shall have the respective
meanings set forth in the Loan Agreement.
B. Borrowers have informed Bank that certain Events of Default exist under
the Loan Agreement as a result of failing to comply with Section 7.3 of the Loan Agreement for the
calendar quarters ending December 31, 2008 and March 31,
2009. Such Events of Default are referred to herein as the “Existing Defaults”.
C. Borrowers have requested and Bank has agreed to (i) waive the Existing
Defaults and (ii) amend certain terms of the Loan Agreement,
subject to the terms, conditions and provisions of this Amendment.
NOW, THEREFORE, with the foregoing Background hereinafter deemed incorporated by this
reference, the parties hereto, intending to be legally bound, promise and agree as follows:
1. AMENDMENTS TO LOAN AGREEMENT
Upon the effectiveness of this Amendment, the Loan Agreement is amended as follows:
1.1 Definitions. The following definitions in Section 1.1 of the Loan Agreement are
amended and restated as follows:
“Applicable Margin” means (a) prior to the Applicable Margin
Adjustment Date (A) for any Prime Rate Loan, 1.25% and (B) for any
LIBOR Loan, 2.75% and (b) on the Applicable Margin Adjustment Date
and thereafter, the per annum rate of interest as determined
pursuant to Section 2.2.5 hereof.
“Borrowing Base” means, on any date of determination thereof, an
amount equal to:
(i) the sum of (a) 85% of the total amount of Eligible Accounts plus (b) the
lesser of (i) 85% of the total amount of Eligible Government Accounts and (ii) $500,000; provided
that, such percentages shall be reduced on a point-for-point basis to the extent ERC US’s Dilution
Rate exceeds 5.0%, plus
(ii) 70% of the total amount of Eligible Special Accounts; provided that, the percentage
shall be reduced on a point-for-point basis to the extent ERC US’s Dilution Rate exceeds 20%,
plus
(iii) the lesser of (a) the Inventory Sublimit and (b) the sum of (i) the lesser of (A) 85% of
the NOLV of Eligible Inventory and (B) (x) during each period commencing on February 1 and
continuing through August 31 of each calendar year, 60% and (y) during each period commencing on
September 1 and continuing through January 31 of each calendar year, 55% of the total amount of
Eligible Inventory, plus (ii) the lesser of (A) 85% of the NOLV of Eligible In-Transit
Inventory, and (B) (x) during each period commencing on February 1 and continuing through August 31
of each calendar year, 60% and (y) during each period commencing on September 1 and continuing
through January 31 of each calendar year, 55% of the total amount of Eligible In-Transit Inventory
and (C) $18,000,000, plus (iii) the lesser of (A) 85% of the NOLV of Eligible Licensed
Inventory, and (B) (x) during each period commencing on February 1 and continuing through August 31
of each calendar year, 60% and (y) during each period commencing on September 1 and continuing
through January 31 of each calendar year, 55% of the total amount of Eligible Licensed Inventory
and (C) (x) $3,000,0000 through and including December 31, 2009, (y) $2,000,000 commencing January
1, 2010 through and including December 31, 2010 and $0 at all time thereafter, plus (iv)
the lesser of (A) 85% of the NOLV of Eligible LC Inventory, and (B) (x) during each period
commencing on February 1 and continuing through August 31 of each calendar year, 60% and (y) during
each period commencing on September 1 and continuing through January 31 of each calendar year, 55%
of the total amount of Eligible LC Inventory, plus
(iv) 100% of the cash proceeds received by ER Hong Kong in connection with the Subsidiary
Sale and which proceeds are maintained at all times by ER Hong Kong in a Deposit Account at Bank
pursuant to Section 5.15(a) hereof, plus
(v) 100% of cash of Borrowers maintained in Deposit Account #2000018631676 and #2000030536885
with Bank (and such other Deposit Accounts agreed to by Borrowers and Bank);
minus
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(vi) $3,000,000; minus
(vii) any Reserves.
“Borrowing Base Certificate” means Borrowing Base Certificate in the form attached hereto
as Exhibit 5.6(a) (a “Borrowing Base Certificate”), and to which Borrowers shall
attach the following, which shall be certified by the chief financial officer, controller or
president of Borrower Agent to be accurate and complete and in compliance with the terms of the
Loan Documents: (i) a report listing all Accounts of Borrowers as of the last day of the prior
calendar month or calendar week if Borrowers are required to provide such Borrowing Base
Certificate more frequently than monthly (an “Accounts Receivable Report”) which shall
include the amount and age of each Account on a due date aging basis, a detailing of all Accounts
which do not constitute Eligible Accounts, Eligible Government Accounts or Eligible Special
Accounts and such other information as Bank may require in order to verify the Eligible Accounts,
Eligible Government Accounts and Eligible Special Accounts, all in reasonable detail and in form
acceptable to Bank, (ii) a detailed summary report listing all Inventory, all Eligible Inventory,
all Eligible In-Transit Inventory, Eligible LC Inventory and all Eligible Licensed Inventory of
Borrowers by location as of the last day of the prior calendar month or calendar week if Borrowers
are required to provide such Borrowing Base Certificate more frequently than monthly, the cost
thereof and all Inventory which has not been timely sold by Borrowers in the ordinary course of
business, and such other information as Bank may require relating thereto, all in form acceptable
to Bank (an “Inventory Report”), (iii) a listing of all accounts payable of ERC US and MI, (iv) a
listing of the amount of royalty payments owing to each licensor with respect to Inventory subject
to a License Agreements sold by US Borrowers and which would be owing to each licensor with respect
to Inventory subject to a License Agreement (including Eligible Licensed Inventory) and (v) any
other report as Bank may from time to time require in its reasonable discretion, each prepared with
respect to such periods and with respect to such information and reporting as Bank may require
“Excess Availability” means at a particular date, an amount equal to (a) the lesser of (i)
the Revolver Commitment or (ii) the Borrowing Base (without deducting the amount set forth in
clause (vi) thereof), minus (b) the sum of (i) the outstanding amount of Loans plus (ii) Letter of
Credit Obligations, plus (iii) all amounts due and owing to Borrowers’ trade creditors which are
outstanding beyond normal trade terms except for those Properly Contested, plus (iv) fees and
expenses for which Borrowers are liable under this Agreement but which have not been paid, plus
(v) all taxes due and owing to any federal, state or local governmental body except for those
Properly Contested.
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1.2
New Definitions. The following new definitions are hereby added to Section 1.1 of the Loan Agreement:
“Applicable Margin Adjustment Date” means the later of (i)
December 31, 2009 or (ii) the first day of the calendar month of the
required delivery date for the financial statements delivered to
Bank pursuant to Section 5.6(b) (other than with respect to the
calendar month ending December 31, 2009) or Section 5.6(c)(ii) which
evidences that Borrowers maintained a Fixed Charge Coverage Ratio of
not less than 1.00 to 1.00 for a period of four (4) consecutive,
trailing calendar quarters.
“Eligible LC Inventory” means all finished goods Inventory
otherwise constituting Eligible Inventory which is supported by a
Purchase Order Supported Letter of Credit. For the avoidance of
doubt, Eligible LC Inventory shall not be considered Eligible
Inventory.
“Inventory Loan Reliance” means the positive difference, if
any, between (a) the outstanding principal balance of Obligations
and the face amount of all outstanding Letters of Credit and (b) the
Borrowing Base (without including the amount determined pursuant to
clause (iii) thereof) (as determined by Bank and whose determination
shall be final and binding absent manifest error).
“Inventory Loan Reliance Percentage” means (a) the Inventory
Loan Reliance divided by (b) the outstanding principal balance of
Obligations and the face amount of all outstanding Letters of Credit
(as determined by Bank and whose determination shall be final and
binding absent manifest error).
“Purchase Order Supported Letters of Credit” means a
documentary Letter of Credit issued by Bank supported by a confirmed
purchase order for Eligible Inventory from a customer of a Borrower
(confirmed in a manner acceptable to Bank in its sole discretion)
which will be paid by a letter of credit in form and substance, and
issued by a financial institution, acceptable to Bank in its sole
discretion.
1.3 Adjustment of Interest Rate. Section 2.2.5 of the Loan Agreement is
amended and restated in its entirety and shall read as follows:
2.2.5 Adjustment of Interest Rate. Commencing on the
Applicable Margin Adjustment Date (based upon prior calendar
quarter’s average Excess Availability (as determined by Bank whose
determination shall be final and binding absent manifest error)) and
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thereafter on the first day of each succeeding Interest
Adjustment Period, the interest rate for all Loans for each
applicable Interest Adjustment Period shall be determined based upon
the prior calendar quarter’s average Excess Availability (as
determined by Bank whose determination shall be final and binding
absent manifest error), in accordance with the following matrix:
| Applicable Margin | Applicable Margin | |||||||
| Excess Availability | for Prime Rate Loans | for LIBOR Loans | ||||||
Less than $5,000,000 |
1.50 | % | 3.00 | % | ||||
Greater than or equal to
$5,000,000 but less
than $15,00,000 |
1.25 | % | 2.75 | % | ||||
Greater than or equal
$15,000,000 |
1.00 | % | 2.50 | % | ||||
For purposes of the foregoing no downward rate adjustment shall
occur if an Event of Default has occurred and is continuing on the
applicable Interest Adjustment Date, such adjustment to take effect
only upon the cure or waiver in writing (if any) of such Event of
Default. In addition to the foregoing and in addition to Bank’s
other rights and remedies hereunder, if during an Interest
Adjustment Period it is determined that an Event of Default exists
upon Bank’s receipt of Borrowers’ quarterly financial statements and
compliance certificate for such fiscal quarter, then the interest
rate for all Loans shall be retroactively reset as of the first day
of such Interest Adjustment Period to the interest rate as of the
last day of the immediately preceding Interest Adjustment Period (if
such interest rate was higher).
1.4 Letters of Credit. Clause (i) of Section 2.10.1 of the Loan Agreement is
amended and restated in its entirety and shall read as follows:
(i) the aggregate face amount of Letters of Credit issued by Bank
which are outstanding at any one time shall not exceed $36,000,000
and of such amount the aggregate face amount of Purchase Order
Supported Letters of Credit issued by Bank which are outstanding at
any one time shall not exceed $10,000,000;
1.5 Purchase Order Supported Letters of Credit. The following new Section
2.10.3 is hereby added to the Loan Agreement:
2.10.3 Purchase Order Supported Letters of Credit. In
addition to the other requirements and conditions contained herein,
as a condition to Bank’s obligation to issue a Purchase Order
Supported Letters of Credit, Borrowers shall deliver to Bank the
following (each in form and substance satisfactory to Bank): (a) the
reference
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number of the letter of credit supporting the confirmed
purchase order in the application for the Letter of Credit; (b) a
copy of the confirmed purchase order and letter of credit supporting
the purchase order which letter of credit shall include the
following: “Issuer acknowledges and consents to the security
interest of Wachovia Bank, National Association (and its successors
and assigns) (“Wachovia”) in and to the proceeds of this letter of
credit, and agrees to pay the proceeds hereof to Wachovia upon
receipt of written instructions of Wachovia, without the consent of
beneficiary”, and (c) the letter of credit supporting the confirmed
purchase order shall be advised to a Borrower through Wachovia Bank,
National Association and payable to a Borrower to Borrowers’
collateral account number 2000018631676 at Bank.
1.6 Commitment Fee. Section 2.11.2 of the Loan Agreement is amended and
restated in its entirety and shall read as follows:
2.11.2
Commitment
Fee. Borrowers shall pay to Bank a Revolver
Commitment fee for each day equal to the product of (i) 0.375% on a
per annum basis multiplied by (ii) the difference between (A) the
then existing Revolver Commitment and (B) the aggregate outstanding
amount of the Revolver Loans and Letter of Credit Obligations on
such day, payable monthly on the first day of each month with
respect to the immediately preceding month.
1.7
Letter of Credit Fees. Section 2.11.3 of the Loan Agreement is amended and
restated in its entirety and shall read as follows:
2.11.3
Letter of Credit Fees. Borrowers shall pay to Bank, at such
times as Bank shall require, Bank’s normal scheduled fees and
charges in connection with Letters of Credit, as in effect from time
to time, and (a) with respect to standby Letters of Credit, at the time
of issuance and renewal of each such Letter of Credit, a fee equal to
the Applicable Margin for LIBOR Loans on a per annum basis on the
face amount of the Letter of Credit for the period of time the Letter
of Credit will be outstanding; (b) with respect to documentary
Letters of Credit (other than Purchase Order Supported Letters of Credit),
monthly in arrears on the first day of each calendar month, a fee
equal to the Applicable Margin for LIBOR Loans minus 0.75%
multiplied by the average daily maximum face amount of all
outstanding documentary Letters of Credit computed at a per annum
rate for each day; and (c) with respect to Purchase Order Supported
Letters of Credit, monthly in arrears on the first day of each
calendar month, a fee equal to the Applicable Margin for LIBOR Loans minus
1.25% multiplied by the average daily maximum face amount of all
outstanding documentary Letters of Credit computed at a per annum
rate for each day.
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1.8
Inspection of Books and Records and Field Examinations. Section 5.5 of the
Loan Agreement is amended and restated in its entirety and shall read as follows:
5.5 Inspection of Books and Records and Field Examinations.
Shall permit inspections of the Collateral and the records of
such Person pertaining thereto and verification of the Accounts, at
such times and in such manner as may be required by Bank (which
except upon the occurrence and during the continuance of any Event
of Default, shall be upon reasonable notice and during reasonable
business hours) and shall further permit such inspections,
collateral appraisals, reviews and field examinations of its other
books and records and properties (with such frequency and at such
times as Bank may desire) by Bank as Bank may deem necessary or
desirable from time to time. The cost of such field examinations,
reviews, verifications, collateral appraisals, and inspections shall
be borne by Borrowers at Bank’s then current rate (currently at a
rate of $850 per examiner per day), plus Bank’s reasonable
out-of-pocket expenses. Notwithstanding the foregoing, so long as no
Event of Default then exists, Borrowers shall be responsible for
costs and expenses associated with a maximum of two (2) examinations
per year, two (2) examiners per examination and eight (8) days
maximum per examination; provided, however, so long as the
Inventory Loan Reliance Percentage was less than 30% (as determined
by Bank on a quarterly basis for the sixth (6) month period ending
on the date of determination and whose determination shall be final
and binding absent manifest error) and so long as no Event of
Default then exists, Borrowers shall be responsible for costs and
expenses associated with a maximum of one (1) examinations per year,
two (2) examiners per examination and eight (8) days maximum for one
examination and five (5) days maximum for the second examination. In
addition to the foregoing, Bank anticipates conducting Inventory
appraisals (at Borrower’s sole cost and expenses) on a semi-annual
basis or in each case on a more frequent basis as Bank may determine
in its reasonable discretion.
1.9 Borrowing Base Reporting Monthly and Annual Financial Statements.
Section 5.6(a), Section 5.6(b) and Section 5.6(c) of the Loan Agreement is amended and
restated in its entirety and shall read as follows:
(a) Periodic Borrowing Base Information. No later than 12:00
noon on the applicable Borrowing Base Reporting Date (or more
frequently if required by Bank), Borrowers shall deliver to Bank a
completed Borrowing Base Certificate certified by the chief
financial officer, controller or president of Borrower Agent to be
accurate and complete and in compliance with the terms of the Loan
Documents, For purposes hereof, “Borrowing Base Reporting Date”
shall mean:
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(i) tenth (10th) Business Day of the calendar month following a calendar
month for which the outstanding principal balance of Obligations and the face amount of all
outstanding Letters of Credit at all times during such calendar month was less than or equal to
the aggregate amount determined pursuant to clauses (iv) and (v) of the definition of Borrowing
Base; or
(ii) the third (3rd) Business Day of every other calendar week following the
Inventory Loan Reliance Percentage being less than 30% for three (3) consecutive Business Days
until such time as the outstanding principal balance of Obligations and the face amount of all
outstanding Letters of Credit was less than or equal to the aggregate amount determined pursuant
to clauses (iv) and (v) of the definition of Borrowing Base for thirty (30) consecutive days and
at such time Borrowers shall resume delivery of Borrowing Base Certificates on a monthly basis
(i.e., no later than 12:00 noon on tenth
(10th) Business Day of each calendar month);
or
(iii)
the third (3rd) Business Day of every calendar week following either (A) the
Inventory Loan Reliance Percentage being equal to or greater than 30% for three (3) consecutive
Business Days or (B) Borrowers’ Excess Availability is equal to or less than $5,000,000 at all
times during the prior calendar month (as determined by Bank in its reasonable discretion) until
such time as, the Inventory Loan Reliance Percentage is less than 30% for thirty (30) consecutive
days or Borrowers’ Excess Availability exceeds $5,000,000 for thirty (30) consecutive days (as
determined by Bank in its reasonable discretion), as applicable, and at such time Borrowers shall
resume delivery of Borrowing Base Certificates on a monthly basis
(i.e., no later than 12:00 noon
on tenth (10th) Business Day of each calendar month).
(b) Interim Statements. Within thirty (30) days after the end of each calendar month (other
than calendar months ending March 31, June 30, September 30 or December 31) and within fifty (50)
days after the end of each calendar month ending March 31, June 30, September 30 or December 31, a
consolidated and consolidating balance sheet of Borrowers at the end of that period and a
consolidated and consolidating income statement, and a statement of cash flows on a consolidated
basis, for that period (and for the portion of the fiscal year ending with such period), setting
forth in comparative form the figures for the same period of the preceding fiscal year. The
foregoing statements shall be certified by the chief financial officer of Borrower Agent as true
and correct and fairly representing the financial condition of Borrowers and their Subsidiaries and
that such statements are prepared in accordance with GAAP, except without footnotes and subject to
normal year-end audit adjustments.
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(e)
Annual Statements. (i) Within seventy five (75) days after the end of each fiscal year,
a consolidated financial report of Borrowers and their Subsidiaries containing a consolidated and
consolidating balance sheet at the end of that period and a consolidated and consolidating income
statement and statement of cash flow for that period, setting forth in comparative form the figures
for the preceding fiscal year, together with footnotes with the foregoing statements shall be
certified by the chief financial officer of Borrower Agent as true and correct and fairly
representing the financial condition of Borrowers and their Subsidiaries and that such statements
are prepared in accordance with GAAP and (ii) within one hundred ten (110) days after the end of
each fiscal year, an audited consolidated financial report of Borrowers and their Subsidiaries
containing a consolidated balance sheet at the end of that period and a consolidated income
statement and statement of cash flow for that period, setting forth in comparative form the figures
for the preceding fiscal year, together with footnotes, and containing an unqualified audit opinion
of independent certified public accountants acceptable to Bank that the financial statements were
prepared in accordance with GAAP. Borrowers shall obtain such written acknowledgments from
Borrowers’ independent certified public accountants with respect to the financial statements
described in caluse (ii) above.
1.10 Excess Availability. Section 6.17 of the Loan Agreement is amended and restated
in its entirety and shall read as follows:
6.17 RESERVED
1.11 Fixed Charge Coverage Ratio. Section 7.1 of the Loan Agreement is amended and
restated in its entirety and shall read as follows:
7.1 Fixed Charge Coverage Ratio.
Borrowers shall maintain a Fixed Charge Coverage Ratio of not less than 1.25 to 1.00 as of the end
of each calendar quarter commencing with the calendar quarter ending
June 30, 2009. As used herein,
“Fixed Charge Coverage Ratio” means (i) EBITDA, less the sum of (A) all unfinanced Capital
Expenditures made in the Applicable Fiscal Period, and (B) any dividends, distributions or stock
purchases permitted in Section 6.3 hereof paid in the Applicable Fiscal Period, and (C) cash taxes
paid in the Applicable Fiscal Period (without benefit of any refunds unless related to periods
prior to the date hereof), divided by (ii) the sum of (A) the current portion of scheduled
principal amortization on Funded Debt for the Applicable Fiscal period, plus (B) cash
interest payments (including payments made in cash with respect to letter of credit fees) paid in
the Applicable Fiscal Period. As used herein, (i) “EBITDA” means the
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sum of (A) consolidated net income of Borrowers and their Subsidiaries in the Applicable Fiscal
Period (computed without regard to any extraordinary or other non-recurring or non-operating items
of gain or loss) plus (B) to the extent deducted from revenue in computing consolidated net
income for such period, the sum of (1) interest expense (including expenses related to letter of
credit fees), (2) income tax expense, and non-cash charges and (3) depreciation and amortization;
(ii) “Capital Expenditures” means for any period the aggregate cost of all capital assets
acquired by Borrowers and their Subsidiaries during such period, as determined in accordance with
GAAP; (iii) “Applicable Fiscal Period” means the calendar year to date period for the
calendar quarters on June 30, 2009, September 30, 2009, December 31, 2009 and March 31, 2010 and
thereafter a period of four (4) consecutive, trailing calendar quarters ending at the end of each
prescribed calendar quarter and (iv) “Funded Debt” means (A) debt for borrowed funds (other than
(x) the debt associated with the term loan provided by PNC Bank, National Association in the
original principal amount of $7,500,000 and (y) the ERC Intercompany Payable), (B) debt for the
deferred payment by one (1) year or more of any purchase money obligation, and (C) any subordinated
debt.
1.12 Advanced Sound and Image, LLC. Pursuant to that certain Fifth
Amendment to Loan and Security Agreement dated as of February 28, 2008 among Borrowers and Bank
(the “Fifth Amendment”), Bank consented to Borrowers entering into and consummating the ADCOM
Transactions (as defined in the Fifth Amendment). Borrowers have informed Bank that they intend to
terminate the ADCOM Transactions in their entirety in exchange for a $200,000 distribution from
Advanced (as defined in the Fifth Amendment) to ERC US while writing off the remaining investment
in and loan to Advanced (the “JV Termination”) and Borrowers have requested that Bank consent to
the JV Termination. Upon the effectiveness of this Amendment, Bank consents to the JV Termination.
1.13 Purchase of OLEVIA Trademark. Borrowers have informed Bank that a Borrower or
an Affiliate of a Borrower intends to purchase that certain intellectual property in connection
with the OLEVIA brand name and/or trademark (the “OLEVIA Purchase”) and Borrowers have requested
that Bank consent to the OLEVIA Purchase. Upon the effectiveness of this Amendment, Bank consents
to the OLEVIA Purchase so long as the (a) aggregate purchase price does not exceed $1,400,000 and
(b) the documents, instruments and agreements evidencing the OLEVIA Purchase and the terms and
conditions contained therein are acceptable to Bank in its sole discretion
1.14 Purchase of Real Property. Borrowers have informed Bank that a Borrower or an
Affiliate of a Borrower intends to purchase that certain parcel of
real property (the “Real Estate Purchase”) commonly
known as 00 Xxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx (the “Target Real Property”) and Borrowers have requested that Bank consent to the Real Estate Purchase and
either consent to financing from a financial institution (“Real Estate Financing”) or otherwise
provide the financing in connection therewith upon terms, conditions and documentation acceptable
to Bank in its sole discretion. Upon the effectiveness of this Amendment, Bank consents to the
Real Estate
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Purchase so long as the (a) aggregate purchase price does not exceed $2,850,000 and (b) the
documents, instruments and agreements evidencing the Real Estate Purchase and the terms and
conditions contained therein are acceptable to Bank in its sole
discretion. Upon the effectiveness
of this Amendment, Bank consents to the Real Estate Financing so long as the (a) aggregate
indebtedness incurred with respect thereto does not exceed $1,850,000, (b) the financial
institution is acceptable to Bank in its sole discretion, (c) the Real Estate Financing in secured
solely by the Target Real Property, (d) the financial institution providing the Real Estate
Financing executes and delivers to Bank a Third Party Waiver and (e) the documents, instruments and
agreements evidencing the Real Estate Financing and the terms and conditions contained therein are
acceptable to Bank in its sole discretion. Borrowers agree to provide Bank final documents
evidencing the Real Estate Purchase and Real Estate Financing at least five (5) Business Days prior
to the effectiveness of each such transaction.
2. WAIVER
Upon
the effectiveness of this Amendment, Bank hereby waives the Existing Defaults. The waiver
of the Existing Defaults shall not constitute a waiver of any other Default or Event of Default.
Nothing contained herein shall obligate Bank to grant any future waiver of any other Default or
Event of Default or be deemed to constitute a course of conduct or course of dealing (whether
similar or dissimilar).
3. CONFIRMATION OF INDEBTEDNESS
Each
Borrower hereby confirms and agrees that, as of the close of business on June 30, 2009,
the total principal amount of outstanding Revolver Loans under the Loan Agreement is $0, and the
face amount of all outstanding Letters of Credit is $8,181,750 and that each Borrower is
unconditionally liable to Bank for such amounts, together with all accrued and unpaid interest and
expenses through the date hereof, without any set-off, deduction, counterclaim or defense.
4. FURTHER ASSURANCES
Each Borrower hereby agrees to take all such actions and to execute and/or deliver to Bank all
such agreements, instruments, certificates, assignments, financing statements and other documents,
as Bank may reasonably require from time to time, to effectuate and implement the purposes of this
Amendment. On or before August 15, 2008, Borrowers shall deliver to Lender authorizing resolutions
authorizing each Borrower’s execution, delivery and performance of this Amendment.
5. CONFIRMATION OF COLLATERAL
Each Borrower covenants, confirms and agrees that as security for the repayment of the
Obligations, Bank has, and shall continue to have, and is hereby granted a continuing lien on and
security interest in the Collateral (including the Xxxxx Xxxxxx Securities), all whether now owned
or hereafter acquired, created or arising, including all proceeds thereof. Each Borrower
acknowledges and agrees that nothing herein contained in any way impairs Bank’s existing rights and
priority in the Collateral.
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6. REPRESENTATIONS AND WARRANTIES
Each Borrower warrants and represents to Bank that:
6.1 By execution of this Amendment, Borrowers confirm that all representations and warranties
made by Borrowers to Bank shall be true and correct in all material respects, with the same effect
as though the representations and warranties had been made on and as of the date hereof, except to
the extent such representation and warranty are made as of a specific
prior date.
6.2 The execution and delivery by each Borrower of this Amendment and the performance of the
transactions herein contemplated (i) are and will be within its power, (ii) have been authorized by
all necessary action, and (iii) are not and will not be in contravention of any order of court or
other agency of government, of law, of any organization document of such Borrower or of any
indenture, agreement or undertaking to which such Borrower is a party or by which the property of
such Borrower is bound, or be in conflict with, result in a breach of or constitute (with due
notice and/or lapse of time) a default under any such indenture, agreement or undertaking, or
result in the imposition of any lien, charge or encumbrance of any nature on any of the properties
of such Borrower.
6.3 This Amendment and any assignment or other instrument, document or agreement executed and
delivered in connection herewith, will constitute the legal, valid and binding obligations of each
Borrower, enforceable in accordance with their respective terms, subject only to bankruptcy and
similar laws affecting creditors’ rights generally.
6.4 After giving effect to Section 2 of this Amendment, there are no outstanding Defaults or
Events of Default under any of the Loan Documents.
6.5 There has been no change which could have a Material Adverse Effect on any Borrower since
the date of the most recent financial statements of such Borrower delivered to Bank from time to
time.
7. EFFECTIVENESS CONDITIONS
This Amendment shall not be effective until the following conditions have been met to the sole
satisfaction of Bank (which satisfaction shall be evidenced by Bank’s counter-execution and
delivery to ERC US of a fully executed counterpart of this Amendment):
(i) Borrowers shall have executed and delivered to Bank this Amendment.
(ii) Borrowers shall have paid to Bank, in immediately available funds, a non-refundable
waiver and amendment fee in an amount equal to $50,000, which fee is fully earned by Bank upon the
execution of this Amendment.
8. PAYMENT OF EXPENSES
Borrowers shall pay or reimburse Bank for all reasonable attorneys’ fees and expenses and all
reasonable out of pocket costs in connection with the analysis, preparation, negotiation and
execution of this Amendment and all agreements, instruments and documents provided for herein or
related hereto.
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9. REAFFIRMATION
This Amendment shall be incorporated into and made part of the Loan Agreement. Except as
expressly modified by the terms hereof, all of the terms and conditions of the Loan Agreement, and
all of the other Loan Documents, are hereby reaffirmed and shall continue in full force and effect
as therein written.
10. RELEASE
As further consideration for the agreement of Bank to enter into this Amendment, each Borrower
hereby waives, releases, and discharges Bank, all affiliates of Bank and all of the directors,
officers, employees, attorneys and agents of Bank and all affiliates of such Persons, from any and
all known claims, demands, actions or causes of action existing as of the date hereof, arising out
of or in any way relating to this Amendment, the Loan Agreement, the Loan Documents and/or any
documents, agreements, instruments, dealings or other matters connected with this Amendment, the
Loan Agreement, the Loan Documents or the administration thereof.
11. MISCELLANEOUS
11.1 Integrated Agreement. The Loan Documents and this Amendment shall be construed as
integrated and complementary of each other, and as augmenting and not restricting Bank’s rights,
remedies and security. If, after applying the foregoing, an inconsistency still exists, the
provisions of this Amendment shall control.
11.2 Severability. Any provision hereof, or of the Loan Agreement or any other Loan
Document that is prohibited or unenforceable in any jurisdiction shall be, as to such jurisdiction,
ineffective to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
11.3 Non-Waiver. No omission or delay by Bank in exercising any right or power under
this Amendment, or the Loan Documents or any related agreement will impair such right or power or
be construed to be a waiver of any Default or Event of Default or an acquiescence therein, and any
single or partial exercise of any such right or power will not preclude other or further exercise
thereof or the exercise of any other right, and no waiver will be valid unless in writing and
signed by Bank and then only to the extent specified. Bank’s rights and remedies are cumulative and
concurrent and may be pursued singly, successively or together.
11.4 Headings. The headings of any paragraph of this Amendment are for convenience
only and shall not be used to interpret any provision of this
Amendment.
11.5 Survival. All warranties, representations and covenants made by Borrowers herein,
or in any agreement referred to herein or on any certificate, document or other instrument
delivered by it or on its behalf under this Amendment, shall be considered to have been relied upon
by Bank. All statements in any such certificate or other instrument shall constitute warranties and
representations by Borrower hereunder. All warranties, representations, and covenants made by
Borrowers hereunder or under any other agreement or instrument shall be deemed continuing until
the Obligations are indefeasibly paid and satisfied in full.
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11.6 Successors and Assigns. This Amendment shall be binding upon and shall inure to
the benefit of Borrowers and Bank, and their respective successors and assigns; provided, that
Borrowers may not assign any of its rights hereunder without the prior written consent of Bank, and
any such assignment made without such consent will be void.
11.7 Governing Law. This Amendment, the Loan Agreement and the Loan Documents shall be
deemed contracts made under the laws of the State of the Jurisdiction and shall be governed by and
construed in accordance with the laws of said state (excluding its conflict of laws provisions if
such provisions would require application of the laws of another jurisdiction) except insofar as
the laws of another jurisdiction may, by reason of mandatory provisions of law, govern the
perfection, priority and enforcement of security interests in the Collateral.
11.8 WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER BY EXECUTION HEREOF
AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT, THE LOAN AGREEMENT, THE LOAN DOCUMENTS
OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION WITH THIS AMENDMENT OR THE LOAN
AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO
ENTER INTO AND ACCEPT THIS AMENDMENT.
11.9 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 an original and all of which when taken together shall constitute but one and the
same instrument. Any signature delivered by a party by facsimile transmission or pdf shall be
deemed to be an original signature hereto.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered by
their duly authorized officers as of the date first above written.
| BORROWERS: | XXXXXXX RADIO CORP. |
|||
| By: | /s/ Greenfield Xxxxx | |||
| Name: | Greenfield Xxxxx | |||
| Title: | Group CFO, EVP | |||
| XXXXXXX RADIO MACAO COMMERCIAL OFFSHORE LIMITED |
||||
| By: | /s/ Xxx Ho Kit, Xxxx | |||
| Name: | XXX HO KIT, XXXX | |||
| Title: | CFO-ASIAN OPERATIONS | |||
| MAJEXCO IMPORTS, INC. |
||||
| By: | /s/ Greenfield Xxxxx | |||
| Name: | Greenfield Xxxxx | |||
| Title: | Group CFO, EVP | |||
 |
SIGNED, SEALED and DELIVERED | ) | ||||||||
| as a Deed for and in the name of | ) | |||||||||
| XXXXXXX RADIO (HONG KONG) LIMITED | ) | |||||||||
| by its attorney | /s/ Xxx Ho Kit, Xxxx
|
) | ||||||||
| Name: XXX HO KIT, XXXX | ) | |||||||||
| in the presence of | ) | |||||||||
| Witness: Name: AU XXX XX, ANGEL |
||||
| Signature: | /s/ Au Xxx Xx, Xxxxx | |||
| XXXXXXX RADIO INTERNATIONAL LTD. |
||||
| By: | /s/ Xxx Ho Kit, Xxxx | |||
| Name: | XXX HO KIT, XXXX | |||
| Title: | CFO-ASIAN OPERATIONS | |||
[SIGNATURE PAGE TO SEVENTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
TO LOAN AND SECURITY AGREEMENT]
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BANK:
|
WACHOVIA BANK, NATIONAL ASSOCIATION | |||||
| By: | /s/ Georglos C. Kyvetnitis
|
|||||
| Name: | Georglos C. Kyvetnitis | |||||
| Title: | Director | |||||
[SIGNATURE PAGE TO SEVENTH AMENDMENT
TO LOAN AND SECURITY AGREEMENT]
TO LOAN AND SECURITY AGREEMENT]
S-2
