FIRST AMENDMENT TO STANDARD LOAN AGREEMENT
FIRST
AMENDMENT TO STANDARD LOAN AGREEMENT
THIS
FIRST AMENDMENT
TO STANDARD LOAN AGREEMENT (this “Amendment”),
dated
as of March __, 2007, is entered into by and between BANK OF AMERICA, N.A.
(the
“Bank”) and POINT.360, INC., a California corporation (the “Borrower”), with
reference to the following facts:
RECITALS
A. The
Bank
and the Borrower are parties to a Standard Loan Agreement, dated as of March
29,
2006 (the “Loan Agreement”), pursuant to which the Bank has provided a revolving
line of credit to the Borrower.
B. The
Borrower desires to acquire the business or assets of Eden FX and Wilshire
Stages (collectively, the “Acquisitions”) and to finance the Acquisitions in
part with secured purchase-money financing from General Electric Capital
Corporation (“GECC”).
C. Pursuant
to the terms of the Loan Agreement, the Borrower may not complete the
Acquisitions or incur secured purchase-money financing from GECC for the
Acquisitions without the Bank’s prior written consent.
D. The
Bank
is willing to consent to the Borrower’s consummation of the Acquisitions and
incurrence of secured purchase-money financing from GECC to facilitate the
Acquisitions as set forth below.
NOW,
THEREFORE, the parties hereby agree as follows:
1. Defined
Terms.
Any and
all initially-capitalized terms used in this Amendment without definition
shall
have the respective meanings assigned thereto in the Loan
Agreement.
2. Consent
to Incurrence of Additional Indebtedness to GECC.
Notwithstanding anything to the contrary set forth in Section
9.7(c)
of the
Loan Agreement, the Bank hereby agrees that the Borrower may obtain additional
term loan financing from GECC in an aggregate principal amount of up to Two
Million Five Hundred Thousand Dollars ($2,500,000), provided
that
such additional term loan financing shall not cause the aggregate principal
amount of the Borrower’s term loan obligations to GECC outstanding at any time
to exceed Seven Million Dollars ($7,000,000). The Borrower shall use all
of the
proceeds of such additional term loan financing from GECC solely for the
purpose
of financing the purchase price payable in connection with the Acquisitions
and
associated transaction costs and expenses.
3. Consent
to Additional Purchase-Money Liens.
Notwithstanding anything to the contrary set forth in Section
9.8(d)
of the
Loan Agreement, the Bank hereby agrees that the Borrower may grant
purchase-money security interests in favor of GECC in the assets acquired
by the
Borrower in connection with the Acquisitions, provided
that
after giving effect to such additional purchase-money security interests,
the
total outstanding principal amount of indebtedness secured by purchase-money
security interests in the assets of the Borrower shall not exceed Two Million
Dollars ($2,000,000).
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4. Increase
in Acquisition Basket.
Section
9.14(b)
of the
Loan Agreement is hereby amended to read in full as follows:
“(b)
Acquire or purchase a business or its assets for total purchase consideration
of
more than (i) Three Million Dollars ($3,000,000) in the Borrower’s fiscal year
2007 or (ii) Two Million Dollars ($2,000,000) in the Borrower’s fiscal year
2008, or acquire or purchase a business or its assets irrespective of the
amount
of total purchase consideration if the Borrower cannot demonstrate to the
Bank’s
reasonable satisfaction that the Borrower would be in pro forma compliance
with
the financial and other covenants set forth in this Agreement after giving
effect to such acquisition or purchase.”
5. Conditions
Precedent.
The
effectiveness of this Amendment shall be contingent upon the satisfaction
of
each of the following conditions:
(a) This
Amendment.
The
Bank shall have received this Amendment duly executed by an authorized officer
of the Borrower; and
(b) The
Guarantor’s Acknowledgment.
The
Acknowledgment of Guarantor attached to the end of this Amendment shall have
been executed by a duly authorized officer of International Video Conversions,
Inc.
6. Reaffirmation
and Ratification.
The
Borrower hereby reaffirms, ratifies and confirms its obligations to the Bank
under the Loan Agreement, acknowledges that all of the terms and conditions
in
the Loan Agreement, as amended hereby, remain in full force and effect, and
further acknowledges that the security interest granted to the Bank in the
Collateral described in the Security Agreement dated as of March 29, 2006
by and
between the Borrower and the Bank is valid and perfected.
7. Integration.
This
Amendment constitutes the entire agreement of the parties in connection with
the
subject matter hereof and cannot be changed or terminated orally. All prior
agreements, understandings, representations, warranties and negotiations
regarding the subject matter hereof, if any, are merged into this
Amendment.
8. Counterparts.
This
Amendment may be executed in multiple counterparts, each of which when so
executed and delivered shall be deemed an original, and all of which, taken
together, shall constitute but one and the same agreement.
9. Governing
Law.
This
Amendment shall be governed by, and construed and enforced in accordance
with,
the internal laws (as opposed to the conflicts of law principles) of the
State
of California.
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IN
WITNESS WHEREOF, the Borrower and the Bank have executed this Amendment by
their
respective duly authorized officers as of the date first above
written.
| BANK OF AMERICA, N.A. | ||
| |
|
|
| By: | ||
|
Xxxxxx
X. Xxxxxxx
Vice
President
|
||
|
POINT.360,
a
California corporation
|
||
| |
|
|
| By: | ||
|
Xxxx
X. Steel
Executive
Vice President, Finance
and
Administration and Chief Financial Officer
|
||
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ACKNOWLEDGMENT
OF GUARANTOR
The
undersigned (the "Guarantor") hereby acknowledges and agrees to the amendment
of
the Loan Agreement contained in the attached Amendment, acknowledges and
reaffirms its obligations owing to the Bank under its Continuing and
Unconditional Guaranty dated as of March 29, 2006, and agrees that such guaranty
is and shall remain in full force and effect, notwithstanding the Amendment.
Although the Guarantor has been informed of the matter set forth herein and
has
acknowledged and agreed to the same, the Guarantor understands that the Bank
has
no obligation to inform the Guarantor of such matter in the future or to
seek
the Guarantor’s acknowledgement or agreement to future amendments to the Loan
Agreement, and nothing herein shall create such a duty.
Dated:
As
of March __, 2007
INTERNATIONAL
VIDEO CONVERSIONS, INC.,
a
California corporation
By:
Xxxx
X.
Steel
Chief
Financial Officer
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