Loan No.: 9677186330/042 Lin # T563
Co-Borrowers: Laser Pacific Media Corporation, and Pacific Video Inc.
Discounted Loan Payoff Agreement
(the "Agreement")
Date: December 2, 1998
To: Pacific Video, Inc.
Laser Pacific Media Corporation
809 N. Cahuenga Blvd
Hollywood, CA 90038
Attn: Mr. Robert McClain, CFO and Secretary
Dear Mr. McClain:
The undersigned, Bank of America National Bank and Savings Association,
successor by merger to Security Pacific National Bank (the "Bank"), on the one
hand, and Laser Pacific Media Corporation, a Delaware corporation ("LPMC"), and
Pacific Video, Inc., a Delaware corporation ("PVI") LPMC and PVI together,
collectively (the "Co-Borrowers"), on the other, hereby agree to and give you
notice of the following.
1. Existing Loan. The Co-Borrowers are the makers of that certain promissory
note in favor of the Bank (the "Note") secured by that certain deed of
trust (the "Deed of Trust") as set forth in Exhibit A attached hereto,
encumbering certain property (the "Subject Property"). The Note was
subsequently modified pursuant to a Modification Agreement dated as of
February 29, 1996. In connection with the Loan, PVI executed an Unsecured
Environmental Indemnity ("PVI Unsecured Indemnity").
2. Discounted Payoff Amount. The Co-Borrowers hereby agree to pay the Bank the
amount of $1,000,000.00 (the "Discounted Payoff Amount") plus accrued
interest on the then outstanding balance. The Bank agrees to accept the
same in full satisfaction of the Co-Borrowers' obligations under the Note,
provided that each of the conditions set forth in paragraph 3 below is
satisfied on or before December 4, 1998 (the "Discounted Loan Payoff
Deadline").
3. Conditions. As a condition of the Bank accepting the discounted amount set
forth above, the Co-Borrowers shall deliver to the Bank the following:
(a) a duly executed original of this Agreement,
(b) the sum of $1,000,000.00, by wire transfer of funds. (See Exhibit
B for wiring instructions), plus accrued interest of $342.89 per diem.
(c) A duly executed Release in the form set forth in Exhibit C hereto.
(d) A duly executed Reaffirmation of Environmental Indemnity set forth
as Exhibit D.
(e) No event of default exists under the Note, and,
(f) This Agreement shall terminate and be not of further force or
effect at the end of business date on the Discounted Note Payoff Deadline.
4. Satisfaction of Note. If the conditions set forth in paragraph 3 above are
fully and timely satisfied, then the Bank will cause its Trustee to issue a
Full Deed of Reconveyance. The Full Deed of Reconveyance will be forwarded
(via Airborne Express) within 14 days to Mr. Robert McClain to the above
address for recording in the County in which the subject property is
located. Additionally, we will include the original (or certified copy)
Note stamped "Satisfied". The Co-Borrowers' obligations under the Note
shall thereafter be deemed satisfied.
5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
6. Confidentiality. Each of the parties hereto and their respective attorneys
agrees to keep the terms of this Agreement confidential, and not to
disclose the same to any other parties except to the extent necessary to
implement the terms of this Agreement or as may be required by the state or
federal law, or by an other rule or regulation to which the parties are
subject, or as may otherwise be agreed to by both parties in writing.
7. Arbitration
(a) Any controversy or claim between the Co-Borrowers and Bank,
including but not limited to those arising out of or relating or
incidental to this Agreement or any agreements or instruments
relating hereto or delivered in conjunction herewith, whether in
contract or tort, shall at the request of any party be determined
by arbitration, which shall be held in Los Angeles, California.
The arbitration shall be in accordance with the Commercial
Arbitration Rules of the American Arbitration Association ("AAA")
and, to the extent not inconsistent therewith and notwithstanding
any choice of law provision in the Agreement, in accordance with
United States Arbitration Code (Title 9, U.S. Code). The
arbitrator shall give effect to statutes of limitation in
determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator.
Judgement upon the arbitration award may be entered in any court
having jurisdiction. The institution and maintenance of an action
for judicial relief or pursuit of a provisional or ancillary
remedy shall not constitute a waiver of the right of any party,
including the plaintiff, to submit the controversy or claim to
arbitration if any party contests such action for judicial
relief. This Section 7 shall not limit the right of either party
to this Agreement to exercise self-help remedies such as setoff
or to obtain provisional or ancillary remedies from a court of
competent jurisdiction before, after, or during the pendency of
any arbitration or other proceeding. The exercise of a remedy
does not waive the right of either party to resort to
arbitration.
(b) Without limiting the generality of the preceding Section 7(a),
each of the parties agrees that money damages would not be a
sufficient remedy for any breach or threatened breach of this
Agreement by the Co-Borrowers, and agrees that in addition to all
other remedies, the arbitrator may award specific performance and
injunctive or other equitable relief as a remedy for any such
breach or threatened breach.
(c) Where the arbitrator determines that there is a prevailing party
in the arbitration, the arbitrator shall assess against the
non-prevailing party all expenses of the arbitration as well as
other reasonable out-of-pocket-expenses of the prevailing party.
In witness whereof, the parties hereto have executed this agreement as
of the date first above written.
CO-BORROWERS:
LASER-PACIFIC MEDIA CORPORATION,
A Delaware corporation
By: /s/ Robert McClain
Name: Robert McClain
Title: Chief Financial Officer and Secretary
PACIFIC VIDEO, INC.
A Delaware corporation
By: /s/ Robert McClain
Name: Robert McClain
Title: Chief Financial Officer and Secretary
BANK:
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
a national banking association
By: /s/ Michelle Chen
Name: Michelle Chen
Title: Vice President
EXHIBIT A
TO DISCOUNTED LOAN PAYOFF AGREEMENT
Loan Date Co-Borrowers Original Principal Deed of Trust (Complete
No. Amount of Note Info)
9677186330/042 05/12/89 LPMC & PVI $2,100,000.00 Dated: 05/12/89
Recorded: 06/06/89
County: Los Angeles
State: California
Instrument 89-912702
No.:
Executed By: PVI
Trustee: Equitable De
Exhibit B
BANK OF AMERICA WIRING INSTRUCTIONS
Loan Accounting Department #1503
333 South Beaudry Avenue, 26th Floor
Los Angeles, CA 90017
Attention: Johnny McMillan (213) 345-7405
ABA # 121-000-358
Account # 15036-00457
Reference Loan #: 9677186330/042
Borrower: Pacific Video, Inc.
EXHIBIT C
RELEASE AGREEMENT
To induce Bank of America National Trust and Savings Association, a
national banking association ("Bank"), to enter into that certain
Discounted Loan Payoff Agreement, dated as of December 2, 1998- (the
"Agreement"), and to satisfy one of the conditions precedent set forth in
the Agreement, each of the undersigned (each a "Releasor"), on behalf of
itself and each of its successors and assigns, does hereby forever release,
discharge and acquit Bank, and its parent, subsidiary and affiliate
corporations, and their officers, directors, shareholders, agents and
employees, and their successors, heirs and assigns, and each of them
(collectively and severally, "Releasees") of and from any and all
liabilities, indebtedness, breaches of contract, breaches of duty or any
relationship, acts, omission, misfeasance, malfeasance, actions or causes
of action, debts, sums of money, accounts, compensations, contracts,
controversies, promises, damages, costs, losses and expenses, of every
type, kind, nature description or character, and irrespective of how, why
or by reason of what facts, whether heretofore, now existing or hereafter
arising, or which could, might, or may be claimed to exist, or whatever
kind or name, whether known or unknown, though fully set forth herein at
length, which in any way arise out of, are connected with or relate to the
Agreement and the transactions contemplated thereby, the Note, Deed of
Trust and/or the Subject Property and any and all guaranties of the
indebtedness evidenced by the Note or Deed of Trust and with respect to the
credit relationship involved therewith; provided, however, that nothing
contained herein shall release Bank from its obligation to observe and
perform the express terms and condition binding upon Bank under the
Agreement.
As further consideration for the herein release contained, Releasor
hereby agrees, represents and warrants that the matters released herein are
not limited to matters which are known or disclosed, and Releasor hereby
waives and any all rights and benefits which Releaser now has, or in the
future may have, conferred upon Releasor by virtue of the provision of
Section 1542 of the Civil Code of the State of California which provides as
follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT
WITH THE DEBTOR.
In this connection, Releasor hereby agrees, represents, and warrants
that it realizes and acknowledges that factual matters now unknown to
Releasor may have given or may hereafter give rise to causes of action,
claims, demands, debts, controversies, damages, costs, losses and expenses
which are presently unknown, unanticipated and unsuspected, and Releasor
further agrees, represents and warrants that his Release has been
negotiated and agreed upon in light of that realization and the Releasor
nevertheless hereby intents to release, discharge and acquit the Releasees
from any such unknown claims which would be Claims if known on the date
hereof.
It is hereby further understood and agreed that the acceptance of
delivery of this Release Agreement by Releasees shall not be deemed or
construed as an admission of liability by any Releasee, and each Releasee
by accepting this Release Agreement expressly denies liability of any
nature whatsoever arising from or relating to the subject of this release
Agreement.
Releasor hereby agrees, represents and warrants that Releasor has had
advice of counsel of Releasor's own choosing in negotiations for and the
preparation of this Release Agreement and that Releasor has had this
Release Agreement fully explained by such counsel and is fully aware of its
contents and legal effect.
Releasor hereby agrees that this Release Agreement shall be governed
by and construed in accordance with the internal laws of the State of
California.
DATED: December 2, 1998.
LASER PACIFIC MEDIA CORPORATION
A Delaware corporation.
By: /s/ Robert McClain
Name: Robert McClain
Title: Chief Financial Officer and Secretary
Pacific Video, Inc.,
A Delaware corporation and a wholly-owned
Subsidiary of LPMC.
By: /s/ Robert McClain
Name: Robert McClain
Title: Chief Financial Officer and Secretary
Certification of Counsel
I have advised the Releasor under the above Release Agreement of the
meaning and effect of the provisions of Section 1542 of the California
Civil Code and that Releasor, acting as its authorized agents, has
voluntarily waived any rights Releasor may have thereunder, as well as
under any other statutes or common law principles of similar effect.
________________________________________________
Attorney for Releasor
PLEASE SIGN BELOW IF CERTIFICATION OF COUNSEL IS WAIVED
LASER PACIFIC MEDIA CORPORATION
A Delaware corporation.
By: /s/ Robert McClain
Name: Robert McClain
Title: Chief Financial Officer and Secretary
Pacific Video, Inc.,
A Delaware corporation and a wholly-owned
Subsidiary of LPMC.
By: /s/ Robert McClain
Name: Robert McClain
Title: Chief Financial Officer and Secretary
EXHIBIT D
REAFFIRMATION OF ENVIRONMENTAL INDEMNITY
(Discounted Loan Payoff Agreement)
This Reaffirmation of Environmental Indemnity is made and dated as of
December 2, 1998 by the undersigned ("Indemnitor") for the benefit of Bank
of America national trust and Savings Association, a notional banking
association, as successor in interest by merger to Security Pacific
National Bank (the "Bank").
RECITALS
A. Indemnitor executed and delivered to the Bank that certain
Environmental Indemnity dated May 12, 1989, as amended by a Modified
Unsecured Indemnity Agreement dated February 26, 1996 (the "Existing
Indemnity").
B. Pursuant to that certain Discount Loan Payoff Agreement dated as of
December 2, 1998, (the "Agreement"), the Bank has agreed to accept a payoff
of the loan made to the Co-Borrowers, which loan is secured by the real
property which is the subject of the Existing Indemnity on the terms and
subject to the conditions set forth more particularly in the Agreement.
C. One such condition is the requirement that Indemnitor reaffirm the
Existing Indemnity.
Now, therefore, in order to induce the Bank to consummate the
transaction contemplated by the Agreement and for other good and valuable
consideration, the Indemnitor hereby agrees as follows:
AGREEMENT
The Existing Indemnity and all of the obligations of Indemnitor and
all the rights, powers, remedies of the Bank therein and thereunder shall
survive the consummation of the transactions contemplated by the Agreement
and shall continue in full force and effect in accordance with its terms.
Dated as of the day and year first above written.
Pacific Video, Inc.,
A Delaware corporation and a wholly-owned
Subsidiary of LPMC.
By: /s/ Robert McClain
Name: Robert McClain
Title: Chief Financial Officer and Secretary