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EXHIBIT 10.59
MULTI-AGREEMENT AMENDMENT NO. 5
This Multi-Agreement Amendment, dated as of June 1, 1997 by and among
XXXXXX COMICS, INC., a New York corporation ("BORROWER") and CITY NATIONAL
BANK, N.A. ("BANK"). For good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
1. Recital of Certain Facts:
(a) Borrower and Bank are parties to that certain
Revolving Loan and Security Agreement, dated as of October 27, 1993 (the
"ORIGINAL LOAN AGREEMENT"), and as amended by that certain Multi-Agreement
Amendment, dated August 30, 1994 (the "FIRST AMENDMENT"), that certain
Multi-Agreement Amendment No. 2, dated as of November 1, 1994 (the "SECOND
AMENDMENT"), that certain Multi-Agreement Amendment No. 3, dated as of
September 1, 1995 (the "THIRD AMENDMENT"), and that certain Multi-Agreement
Amendment No. 4, dated as of June, 1996 (the "FOURTH AMENDMENT"). The Original
Loan Agreement, the First Amendment, the Second Amendment, the Third Amendment
and the Fourth Amendment are hereinafter collectively referred to as the "LOAN
AGREEMENT." Capitalized terms not otherwise defined herein shall have the same
meaning as set forth in the Loan Agreement.
(b) Borrower has requested that the Commitment
Termination Date be extended and that the amount available for borrowings be
increased from $2,500,000 to $5,000,000.
(c) Bank has agreed to (i) increase the Commitment
Amount and (ii) extend the Commitment Termination Date to June 1, 1998 as
herein provided, subject to the terms of this Agreement.
2. Amendment to Loan Agreement and Revolving Note:
2.1 Increase in Commitment Amount. The term "Commitment"
is hereby restated to mean the commitment of Lender to make Loans, on the terms
and conditions herein obtained from the date hereof through the Commitment
Termination Date in an aggregate principal amount at one time outstanding not
in excess of Five Million Dollars ($5,000,000.00).
2.2 Extension of Commitment Termination Date. Bank and
Borrower agree that the Commitment Termination Date shall be extended to June
1, 1998. The Revolving Note shall also be deemed amended so that the payment
due date contained in the fourth paragraph thereof shall be changed to June 1,
1998. Except as specifically amended hereby, all other provisions of the Loan
Agreement and the Collateral Documents shall remain in full force and effect.
2.3 Borrower Base. Bank and Borrower agree that all
further Advances shall be the application of a Borrowing Base formula as set
forth below.
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23.1 Notwithstanding anything in this Loan Agreement to the
contrary, in no event may the aggregate principal amount of the Revolving Loan
outstanding exceed the Borrowing Base. The Borrowing Base shall include the
aggregate value of the following:
(a) 50% of the aggregate dollar value of all Eligible
Accounts Receivables; and
(b) The Library Value.
2.3.2 The calculation of the Borrowing Base shall be made as of
the end of each quarter that a Revolving Loan hereunder is outstanding and in
which the amount of Indebtedness hereunder is in excess of the Library Value,
and shall be delivered, in the form attached as Exhibit 1 hereto (the "BORROWING
BASE STATEMENT"), to Bank no later than fifteen (15) days following the end of
each such fiscal quarter. The Borrowing Base Statement shall set forth the
amount of each component included and to be included in the Borrowing Base (by
reference to this Section 2.3.2 and as of the last Business Day of the
preceding quarter, attached to which shall be detailed information including
the calculation of the Eligible Accounts, as well as such other information as
reasonably may be requested by the Bank with respect thereto.
2.3.3 The Bank shall have the sole discretion as to accept or
reject any such Account which is proposed to be included in the Borrowing Base
and to reject an Account which was previously included therein.
2.3.4 For purposes of the Loan Agreement, the following terms
shall have the meanings set forth below:
Account Debtor shall be any Person who is or who may become
obligated to Borrower under, with respect to, or on account of an Account.
Eligible Account Receivables shall be those Eligible Domestic
Accounts or Eligible Foreign Accounts excluding each of the following:
(i) the particular amounts to be paid in respect of any
Accounts the payment date of which exceeds 24 months from the date of applicable
Borrowing Base;
(ii) the particular amounts to be paid in respect of any
Accounts for invoiced balances which extend beyond one (1) month past due;
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(iii) all amounts to be paid in respect of any Account
Debtor if any invoiced balances for such Account Debtor if any invoiced
balances for such Account Debtor extends beyond ninety (90) days past due;
(iv) any intercompany receivable;
(v) any Account considered to be a risk in the sole
discretion of Bank based on country;
(vi) any Account generated as a result of a default or
cancellation by another Account Debtor; and
(vii) any other Account which Bank has rejected pursuant to
Section 2.3.3 of Amendment No. 5.
Eligible Domestic Accounts shall consist of Eligible Account
Receivables with Account Debtors domiciled in the United States, which Account
Debtors are acceptable to Bank in Bank's sole and absolute discretion, which
relate to (i) the sale or license of completed Film Assets which are available
for delivery, have been delivered and/or have been accepted by such Account
Debtors, or (ii) relate to license fees or other royalty payments regarding the
use of assets of the Borrower, the amount of which is either guaranteed or
subject to verification by reference to sales numbers or other similar data.
Eligible Foreign Account shall consist of Accounts with Account
Debtor who are domiciled outside the United States, which Account Debtors are
acceptable to Bank in Bank's sole and absolute discretion, which relate to the
sale or license of completed Film Assets which are available for delivery, have
been delivered and/or have been accepted by such Account Debtors, or (ii)
relate to license fees or other royalty payments regarding the use of assets of
the Borrower, the amount of which is either guaranteed or subject to
verification by
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reference to sales numbers or other similar data. Notwithstanding the
foregoing, no Account may be considered to be an Eligible Foreign Account
unless it is to be paid in U.S. Dollars.
Library Value shall mean the sum of $2,500,000.
2.4 Amendment to Covenants. Sections 6.5 and 6.6 of the Loan
Agreement are hereby restated in their entirety as follows:
"6.5 Net Worth. Borrower shall not permit its Net Worth to fall
below $17,000,000 for any quarter or at any fiscal year end.
6.6 Current Ratio. Borrower shall not permit its Current Ratio
to be less than 1.0 to 1.0 at any quarter or at any fiscal year end."
2.5 Inclusion of Additional Covenants. Borrower agrees that it will
not use any proceeds of any advance hereunder for any acquisition, business
combination, or other merger without the express written consent of the Bank,
which consent may be withheld by the Bank in its sole and absolute discretion.
2.6 Amendment to Notice Provisions. Section 9.11 of the Loan
Agreement is hereby restated in its entirety as follows:
"9.11 Notice. Except as otherwise provided herein, any notice
required hereunder shall be in writing, and shall be deemed to have been
validly served, given or delivered upon deposit in the United States mails,
with proper postage prepaid, and addressed to the party to be notified at the
following addresses (or such other address(es) as a party may designate for
itself by like notice):
(A) If to Lender, at
CITY NATIONAL BANK
Entertainment Department
000 X. Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxx
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With a copy to:
XXXXX XXXXXX XXXXX & XXXX
1900 Avenue of the Stars, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx, Esq.
(B) If to Borrower, at
XXXXXX COMICS, INC.
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxx Xxxxxxxxxx
with a copy to:
THE XXXXXX ENTERTAINMENT COMPANY
1999 Avenue of the Stars
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Mr. Xxxx Xxxxxxxxxx
3. Consents: Each of the parties hereto consents to the foregoing
amendments to the extent the consent of any such party is required under the
Loan Agreement's current notice provisions.
4. Representations and Warranties of Borrower: In order to induce Bank
to enter into this Agreement, Borrower represents and warrants to Bank that:
(a) Borrower has the power and authority and has taken all
action necessary to execute, deliver and perform this Agreement and all other
agreements and instruments executed or delivered to be executed or delivered in
connection herewith and therewith and this Agreement and such other agreements
and instruments constitute the valid, binding and enforceable obligations of
Borrower.
(b) The representations and warranties contained in the Loan
Agreement are true and correct in all respects on and as of the date hereof as
though made on and as of the date hereof and no Event or Default (as said term
is defined in the Loan Agreement) or event which with the passage of time or
the giving or notice or both would constitute an Event of Default has occurred
and is continuing as of the date hereof.
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(c) Since the date of the most recent financial statements, if
any, furnished by Borrower to Bank, there has been no material adverse change in
the business or assets or in the financial condition of Borrower.
5. Representations and Warranties of Guarantor. The Guaranty of Borrower
remains in full force and effect and Guarantor provides that as of the date of
this Agreement, it has not offsets, claims or defenses against any of its
obligations under the Guaranty.
6. Acknowledgment of Borrower: Borrower acknowledges and agrees that as
of the date of this Agreement, it has no offsets, claims or defenses whatsoever
against any of its obligations under the Revolving Note, or its obligations
under the Loan Agreement, the Collateral Documents, or any other agreements,
documents or instruments securing or pertaining to the Revolving Note or the
Loan Agreement.
7. Fee: As an additional consideration for the extension contemplated
under this Agreement, Borrower shall concurrently pay to (i) Bank, the sum of
$37,500 as additional loan fees, and to (ii) XXXXX XXXXXX, XXXXX & XXXX, the
Bank's counsel, such sums as may be owing in respect of the preparation of
this amendment and the filing fees related thereto.
8. Full Force and Effect: Each of the Collateral Documents, and all
other documents, agreements and instruments relating to thereto remain in full
force and effect.
9. Governing Law: This Agreement and the rights and obligations of the
parties hereunder shall be governed by, construed and enforced in accordance
with the laws of the State of California applicable to agreements executed and
to be wholly performed therein.
10. Counterparts: This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which when
taken together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the date first above
written.
XXXXXX COMICS, INC.
By: /s/
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Its:
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THE XXXXXX ENTERTAINMENT COMPANY
By: /s/
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Its:
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CITY NATIONAL BANK, N.A.
By: /s/
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Its: VICE PRESIDENT
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EXHIBIT 1
BORROWING BASE SCHEDULE
Outstanding Indebtedness $__________
Borrowing Base
Library Value $__________
Eligible Accounts (see Attachment 1) X 50% $__________
Total Borrowing Base $__________
The undersigned, the Chief Financial Officer of Borrower, certifies
that the foregoing is true and correct as of the date hereof.
Xxxxxx Comics, Inc.
By: __________
Its: _________
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