June 15, 1998
Laser-Pacific Media Corporation
Laser Edit Inc.
PDS Video Productions, Inc.
Spectra Systems, Inc.
Pacific Film Laboratories Inc.
Pacific Video, Inc.
000 Xxxxx Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx, Chief Executive Officer
Re: Loan and Security Agreement with the CIT Group / Credit Finance, Inc.
Amendment No. 7
Gentleman:
Reference is made to your respective Loan and Security Agreements
wherein each of you is a "Borrower" and the CIT Group / Credit Finance,
Inc. is the "Lender", all of which Loan and Security Agreements are dated
August 3, 1992 (the "Agreements"). Lender and each Borrower have agreed to
amend the Agreements as follows effective immediately. Except as amended
herein, the Agreements shall remain unchanged and in full force and effect.
1. Annual appraisals.
Section 2.2 of each of the agreements is hereby amended to eliminate
the requirement for annual appraisals, provided Borrower is not in Default
to Lender. However, Lender may conduct appraisals at any time upon prior
notice to Borrower and at Lender's expense.
2. Extension of Term.
Section 9.1 of each of the Agreements is hereby amended to read as
follows:
"This Agreement shall continue in full force and effect through August
3, 12001 and shall be deemed automatically renewed for successive terms of
two (2) years thereafter unless terminated as of August 3, 2001 or as of
the end of any renewal term (each a "Term") by either party giving the
other written notice at least sixty (60) days prior to the end of the
then-current Term."
3. Early Termination Fee Reduction.
Section 9.2(a) of each of the Agreements is hereby amended to read as
follows:
"(a) one and one-half percent (1.50%) of the Maximum Credit if
termination occurs during the current Term or any renewal Term of the
agreement."
4. Minimum Borrowing Reduction.
Section 10.1(e) of each of the Agreements is hereby amended to
decrease the Minimum Borrowing from $4,000,000.00 to $2,500,000.00.
5. Term Loan.
Section 10.2 of each of the Agreements is hereby amended to read as
follows:
"10.2 Existing Equipment Term Loan: 100% of a current appraised
auction value of unencumbered equipment as per appraisal conducted by
appraiser acceptable to Lender, not to exceed $5,370,000.00, subject to the
provisions of Section 2.2 hereof and to be amortized over 60 months with no
payments in June, July and August of each year.
New Equipment Term Loan: 100% of auction value of appraisals
acceptable to CIT, not to exceed $500,000.00 per year in aggregate."
6. Interest Rate Reduction.
Section 10.4(a) of each of the Agreements is hereby amended to read as
follows:
"(a)(1) Interest Rate for Revolving Loans: Prime Rate plus 1.5% over a
360-day year
(a)(2) Interest Rate for Term Loans: 10.5% over a 360-day year"
7. Facility Fee Reduction.
Section 10.4(b) of each of the Agreements is hereby amended to read as
follows:
"(b) Facility Fee $70,000.00"
8. Annual Special Advance.
Provided Borrowers are not in default to Lender at such time and
Borrower's annual cash flow projections are acceptable to Lender in its
sole discretion, lender agrees to make an advance of up to $500,000.00 in
excess of the loans available under Borrower's lending formulas on May 1 of
each year. Such advance shall be repaid in equal installments commencing on
September 15 until October 31 of each year at which time the full amount of
the Special Advance must be repaid in full.
9. Extension of Stock Option.
Borrower agrees to extend the expiration date of the Warrant with a
Date of Grant of August 3, 1992 to August 3, 2001, and to effectuate said
extension, agrees to sign any and all amendments or other documents Lender
may deem necessary to accomplish same.
If all of the foregoing correctly sets forth our understanding, will
each of you please sign a copy of this letter where indicated below and
return the original of this document to the undersigned.
Very truly yours,
THE CIT GROUP/Credit Finance, Inc.
Xxxxxxx Xxxxxx
Vice President
All of the foregoing is hereby agreed to.
Laser-Pacific Media Corporation Laser Edit, Inc.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
Title: C.E.O. Title: C.E.O.
PDS Video Productions Spectra Systems, Inc.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
Title: C.E.O. Title: C.E.O.
Pacific Film Laboratories, Inc. Pacific Video, Inc.
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
Title: C.E.O. Title: C.E.O.
