Exhibit 10.13
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ING (U.S.) CAPITAL LLC
135 East 57th Street
New York, New York 10022-2101 L/C No.: G74184
Telephone # (212) 409-1610 Date: 12 JAN 99
IRREVOCABLE STANDBY LETTER OF CREDIT
Irrevocable Standby Letter of Credit No. G74184
Stated Amount: $3,000,000
Dated: January 12, 1999
The Chase Manhattan Bank
600 Fifth Avenue, 4th Floor
New York, New York 10020
Ladies and Gentlemen:
At the request and for the account of Matthews Studio Equipment Group, a
California corporation (the "Account Party"), we hereby establish in your favor
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this irrevocable standby Letter of Credit in the original stated amount of
$3,000,000 (THREE MILLION DOLLARS) (the "Stated Amount") in respect of any
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Obligations of the Account Party to you and the Lenders pursuant to the terms
and conditions of the Amended and Restated Credit Agreement dated as of April 1,
1998 (as amended or otherwise modified from time to time, the "Credit
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Agreement").
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SECTION 1. Definitions. The following terms when used in this Letter of
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Credit shall have the meanings set forth below. Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement,
which is attached as Exhibit A hereto, and such defined terms are hereby
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incorporated by reference.
"Beneficiary" and "you" means The Chase Manhattan Bank, a New York banking
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corporation, as Agent for the Lenders, and all direct and indirect transferees
and assigns thereof in their capacity as Agent for the Lenders as the
beneficiary of this Letter of Credit.
"Business Day" shall mean any day (other than Saturday or Sunday) on which
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commercial banks located in New York, New York are not required or authorized to
be closed.
"Leverage Ratio" with respect to any person at the end of any fiscal
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quarter shall mean the ratio of (i) total Funded Indebtedness of such person as
at the date of determination to (ii) EBITDA (adjusted to include the trailing
EBITDA of any person acquired by such
person as a Permitted Acquisition on a basis satisfactory to the Agent) of such
person for the four most recent consecutive fiscal quarters ending on or prior
to the date of determination.
"Responsible Officer" with respect to any entity shall mean the entity's
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President, Chief Financial Officer, Controller or any Vice President.
"Stated Amount" means, at any time, the original stated amount of this
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Letter of Credit set forth in the first paragraph, as such amount is reduced
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from time to time in accordance with Section 4.
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"Stated Expiry Date" means December 31, 2000.
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SECTION 2. Presentation. Drawings and funds under this Letter of Credit
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will be made available only to the Beneficiary, in lawful currency of the United
States of America, against receipt by us of the original signed counterpart of
the Beneficiary's written Certificate of Demand in the form of Annex 1 hereto,
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appropriately completed and purportedly executed by an authorized officer of the
Beneficiary accompanied by this originally executed Letter of Credit.
Presentation of each such certificate shall be made in person at our office (our
"Payment Office") located at 135 East 57th Street, New York, New York 10022,
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Attention: Mark LaGreca.
SECTION 3. Payments. (a) Drawings and funds under this Letter of Credit
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will be available to the Beneficiary only on the terms set forth in the
Certificate of Demand in the form of Annex 1 hereto. Drawings in respect of
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payments under this Letter of Credit shall not exceed the lesser of (x) all
amounts owed to the Lenders by the Account Party under the Loan Documents and
(y) the Stated Amount.
(b) Subject to Sections 2 and 3(a), a single demand for payment in lawful
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money of the United States of America may be made by you on any Business Day
under this Letter of Credit during our business hours at our Payment Office.
Partial drawings under this Letter of Credit are not permitted and any drawing
under this Letter of Credit shall reduce the Stated Amount to zero (0). If
demand for payment is made by you hereunder at or prior to 10:00 a.m., New York
time, on a Business Day, and provided that such demand for payment and the
documents presented in connection therewith strictly conform to the terms and
conditions hereof, payment shall be made to you of the amount demanded, in
immediately available funds, not later than 4:00 p.m., New York time, on the
same day. If demand for payment is made by you hereunder after 10:00 a.m., New
York time, on a Business Day, and provided that such demand for payment and the
documents presented in connection therewith strictly conform to the terms and
conditions hereof, payment shall be made to you of the amount demanded, in
immediately available funds, not later than 11:00 a.m., New York time, on the
next succeeding Business Day. If requested by you, payment under this Letter of
Credit will be made by wire transfer of same day funds to the account specified
in your demand for payment. If a demand for payment made by you hereunder does
not, in any instance, strictly conform to the terms and conditions of this
Letter of Credit, we shall give you prompt notice that the demand for payment
was not effected in accordance with the terms and conditions of this Letter of
Credit, stating the reasons therefor, and that we will (subject to your further
instructions) hold any documents which
have been delivered to us by you. Upon being notified that the demand for
payment was not effected in conformity with this Letter of Credit, you may
attempt to correct any such non-conforming demand for payment to the extent that
you are then entitled and able to do so.
SECTION 4. Reduction of Stated Amount. Upon any drawing being honored by
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us hereunder the Stated Amount shall be reduced to zero and there shall be no
reinstatement thereof. No demand for payment hereunder shall exceed the Stated
Amount in effect at such time.
SECTION 5. Discharge. Only the Beneficiary may make a demand for payment
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under this Letter of Credit. Upon the payment to the Beneficiary, to your
designee, or to your account of the amount demanded hereunder, we shall be fully
discharged of our obligation under this Letter of Credit and we shall not
thereafter be obligated to make any further payments under this Letter of
Credit. By paying to you, to your designee, or to your account any amount
demanded in accordance herewith, we make no representation as to the correctness
of the amount demanded.
SECTION 6. Termination. This Letter of Credit shall automatically
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terminate upon the earliest to occur of the following, provided, however, that
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if there is a continuing Event of Default at the time the event described in
Section 6(a) occurs, this Letter of Credit shall not terminate for so long as
such Event of Default continues:
(a) delivery of a compliance certificate from a Responsible Officer of
the Account Party to the Beneficiary, together with a schedule
demonstrating calculations to the reasonable satisfaction of the
Beneficiary to the effect that, at the end of the most recently completed
fiscal quarter (i) the Account Party and its Consolidated subsidiaries have
maintained a minimum Availability of $2,000,000 (excluding amounts
available under this Letter of Credit) for the preceding three months and
(ii) the Leverage Ratio of the Account Party and its Consolidated
subsidiaries is 4.50 or less, such calculation being deemed accepted by the
Beneficiary (and thereby terminating this Letter of Credit) unless
Beneficiary delivers to the Account Party and us a notice disputing the
Account Party's calculations within five Business Days following
Beneficiary's receipt thereof;
(b) the replacement of the credit facility extended to the Account
Party by the Lenders under the Credit Agreement;
(c) the making by us of the payment available to be made hereunder;
(d) the close of business at our Payment Office on December 31, 2000;
and
(e) the termination, payment or other satisfaction in full of all
Obligations to which this Letter of Credit relates.
Upon its termination, you shall promptly deliver the original counterpart of
this Letter of Credit to us for cancellation. Upon a termination pursuant to
subparagraph (a), (b) or (e) hereof, you shall deliver to us a Certificate of
Termination in the form of Annex 2 hereto,
purportedly signed by an authorized officer of the Beneficiary. ING (U.S.)
Capital LLC will not investigate the accuracy of the representation contained in
a Certificate of Termination delivered to us in the form of Annex 2, but will
rely on such Certificate of Termination on its face.
SECTION 7. Notices. Except as otherwise herein provided, all notices and
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other communications provided for herein shall be by facsimile, registered mail
or delivery in person, in each case to an officer of the intended recipient at
the following addresses or facsimile number:
(i) If to the Beneficiary, at:
The Chase Manhattan Bank
600 Fifth Avenue, 4th Floor
New York, New York 10020
Attention: Relationship Manager - Matthews Studio Equipment Group
Facsimile No.: 212-332-4297
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: Jeffrey M. Epstein
Facsimile No.: 212-836-6475
(ii) If to us, at:
ING (U.S.) Capital LLC
135 East 57th Street
New York, New York 10022
Attention: Mark LaGreca
Facsimile No.: 212-750-8934
with a copy to:
ING Equity Partners, L.P. I
520 Madison Avenue, 33rd Floor
New York, New York 10022
Attention: Benjamin P. Giess
Facsimile No.: 212-750-2970
and an additional copy to:
Mayer, Brown & Platt
1675 Broadway
New York, New York 10019
Attention: James B. Carlson
Facsimile No.: 212-262-1910
Except as otherwise herein provided, all notices and other communications
shall be deemed to have been duly given when received or, in the case of a
facsimile, when receipt is acknowledged.
SECTION 8. Governing Law. This Letter of Credit shall be subject to the
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Uniform Customs and Practices for Documentary Credits of the International
Chamber of Commerce Publication No. 500, as adopted or amended from time to time
(the "Uniform Customs"). This Letter of Credit shall be deemed to be issued
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under the internal laws of the State of New York and shall, as to matters not
governed by the Uniform Customs, be governed by and construed in accordance with
the laws of said State.
SECTION 9. Miscellaneous. This Letter of Credit sets forth in full our
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undertaking, and such undertaking shall not in any way be modified, amended,
amplified or limited by reference to any document, instrument or agreement
referred to herein, and any such reference shall not be deemed to incorporate
herein by reference any document, instrument or agreement except as set forth
above.
Very truly yours,
ING (U.S.) CAPITAL LLC
By:__________________________
Title: Authorized Signatory
ANNEX 1
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CERTIFICATE OF DEMAND FOR PAYMENT
[DATE]
ING (U.S.) Capital LLC
135 East 57th Street
New York, New York 10022
Attention: _______________
Re: Irrevocable Standby Letter of Credit No.
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The undersigned, a duly authorized officer of The Chase Manhattan Bank (the
"Beneficiary"), hereby certifies to ING (U.S.) Capital LLC (the "Issuer") as
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follows:
A. Unless otherwise defined, all capitalized terms used herein have
the meanings assigned thereto in the referenced Irrevocable Standby Letter
of Credit (the "Letter of Credit"), dated January __, 1999, issued by the
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Issuer at the request of Matthews Studio Equipment Group (the "Account
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Party").
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B. The undersigned is an authorized officer of the Beneficiary and is
duly authorized with all necessary power on behalf of the Beneficiary to
present this certificate and make a demand for payment under the Letter of
Credit.
C. Either /1/
(1) The Account Party has (A) voluntarily commenced a proceeding or
filed a petition seeking relief under Title 11 of the United States Code
or any other Federal, state or foreign bankruptcy, insolvency liquidation
or similar law, (B) consented to the institution of, or failed to
contravene in a timely and appropriate manner, any such proceeding or the
filing of any such petition, (C) applied for or consented to the
appointment of a receiver, trustee, custodian, sequestrator or similar
official for the Account Party or for a substantial part of its property or
assets, (D) filed an answer admitting the material allegations of a
petition filed against it in any such proceeding, (E) made a general
assignment for the benefit of creditors or (F) admitted in writing its
inability to pay its debts as they become due.
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/1/ Beneficiary shall delete the provisions of paragraph (c) that are not
applicable.
[or]
(2) An Event of Default has occurred and the Agent, in accordance
with the terms and conditions of the Credit Agreement and the other Loan
Documents, has served the Account Party with a notice of acceleration and
otherwise satisfied any notification requirements thereunder and declared
all amounts then owing to the Lenders by the Account Party under the Loan
Documents due and immediately payable.
D. Consequently, the Beneficiary is making a demand for payment in
lawful money of the United States of America under the Letter of Credit in
the amount of [$__________], which amount is the lesser of (1) all amounts
owed to the Lenders by the Account Party under the Loan Documents and (2)
the Stated Amount. The amount demanded hereby does not (and will not on
the date payment hereunder is required to be made), exceed the Stated
Amount.
E. Attached to this Demand for Payment is the originally executed
Letter of Credit.
F. [Beneficiary to insert disbursement instructions.]
G. No termination of the Letter of Credit shall have occurred.
IN WITNESS WHEREOF, the Beneficiary has caused its Authorized Officer to
execute and deliver this Certificate as of the _____ day of ______, ____.
THE CHASE MANHATTAN BANK
By:_________________________
Title:
ANNEX 2
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CERTIFICATE OF TERMINATION
[DATE]
ING (U.S.) Capital LLC
135 East 57th Street
New York, New York 10022
Attention: _______________
Re: Irrevocable Standby Letter of Credit No.
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The undersigned, a duly authorized officer of The Chase Manhattan Bank (the
"Beneficiary"), hereby certifies to ING (U.S.) Capital LLC (the "Issuer") as
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follows:
A. Unless otherwise defined, all capitalized terms used herein have
the meanings assigned thereto in the referenced Irrevocable Standby Letter
of Credit (the "Letter of Credit"), dated January __, 1999, issued by the
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Issuer at the request of Matthews Studio Equipment Group (the "Account
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Party").
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B. The undersigned is an authorized officer of the Beneficiary and is
duly authorized with all necessary power on behalf of the Beneficiary to
present this certificate.
C. Either /2/
(1) All Obligations to which the Letter of Credit relates have been
terminated, paid or otherwise satisfied in full.
[or]
(2) The credit facility extended to the Account Party by the Lenders
under the Credit Agreement has been replaced.
[or]
(3) The Account Party and its Consolidated subsidiaries have
maintained a minimum Availability of $2,000,000 (excluding amounts
available under the Letter of
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/2/ Beneficiary shall delete the provisions of paragraphs (c) and (d) that are
not applicable.
Credit) for the fiscal quarter ending _______________, 199__ and the
Leverage Ratio of the Account Party and its Consolidated subsidiaries as of
the end of such fiscal quarter is 4.50 or less, as demonstrated to our
reasonable satisfaction.
D. Consequently, the Letter of Credit has terminated pursuant to
Section 6 [(a),(b) or (e)] thereof.
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E. Attached to this Certificate of Termination is the originally
executed Letter of Credit.
IN WITNESS WHEREOF, the Beneficiary has caused its Authorized Officer to
execute and deliver this Certificate as of the _____ day of ______, ____.
THE CHASE MANHATTAN BANK
By:_________________________
Title: