FOURTH AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment") is made and dated as of the 25th day of January, 2000, by and among
SANWA BANK CALIFORNIA ("Sanwa") and IMPERIAL BANK, as the current Lenders under
the Credit Agreement referred to below (and as the term "Lenders" and
capitalized terms not otherwise defined herein are used in the Credit
Agreement), SANWA, in its capacity as Agent for the Lenders, and EQUITY
MARKETING, INC., a Delaware corporation (the "Company").
RECITALS
A. Pursuant to that certain Amended and Restated Credit Agreement
dated as of December 10, 1998, by and among the Agent, the Lenders and the
Company (as amended from time to time, the "Credit Agreement"), the Lenders
agreed to extend credit to the Company on the terms and subject to the
conditions set forth therein.
B. The Company, the Agent and the Lenders desire to modify the Credit
Agreement in certain respects as set forth more particularly below.
NOW, THEREFORE, in consideration of the foregoing Recitals and for other
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:
AGREEMENT
1. WAIVER OF FAILURE TO COMPLY WITH REPORTING REQUIREMENT. The
Lenders hereby waive any Event of Default which may exist as a result of the
failure of the Company to have delivered certain Abbreviated Borrowing Base
Certificates as required under Paragraph 7(b)(5) prior to February 1, 2000.
Nothing contained herein shall in any manner or to any extent constitute any
agreement by the Agent or the Lenders to waive any other Event of Default which
may now or in the future exist under the Loan Documents, whether such Event of
Default is similar to that expressly waived hereunder or otherwise.
2. INCREASE IN PERMITTED STOCK REPURCHASES. To reflect the agreement
of the parties to increase the dollar amount of acquisitions, purchases,
redemptions and retirements of the Company's capital stock, the parties hereto
hereby agree that effective as of the Effective Date the dollar amount
"$1,000,000.00" appearing in line 6 of Paragraph 8(f) of the Credit Agreement is
hereby replaced by the dollar amount "$2,500,000.00".
3. MODIFICATION OF FINANCIAL COVENANT. To reflect the agreement of
the parties to modify the financial covenant set forth in Paragraph 8(j) of the
Credit Agreement, the parties
hereto hereby agree that effective as of the Effective Date Paragraph 8(j) of
the Credit Agreement is hereby amended to read in its entirety as follows:
"8(j) RATIO OF TOTAL LIABILITIES TO TANGIBLE NET WORTH. Permit
the Company's ratio of consolidated Total Liabilities to consolidated
Tangible Net Worth to be more than (1) as of December 31, 1999,
3.50:1.00, and (2) thereafter, 2.25:1.00."
4. REAFFIRMATION OF SECURITY AGREEMENT. The Company hereby affirms
and agrees that: (a) the execution and delivery by the Company of and the
performance of its obligations under this Amendment shall not in any way amend,
impair, invalidate or otherwise affect any of the obligations of the Company or
the rights of the Secured Parties under the Security Agreement or any other
document or instrument made or given by the Company in connection therewith,
(b) the term "Obligations" as used in the Security Agreement includes, without
limitation, the Obligations of the Company under the Credit Agreement as amended
hereby and (c) the Security Agreement remains in full force and effect.
5. EFFECTIVE DATE. This Amendment shall be effective as of the date
(the "Effective Date") that the Agent receives the following:
(a) Duly executed signature pages for this Amendment from each
party hereto;
(b) A reaffirmation of guaranty and security agreement in form
and substance acceptable to the Agent and the Lenders, duly executed by each of
Corinthian Marketing, Inc. and Equity Marketing Hong Kong, Ltd.;
(c) A copy of corporate resolutions from the Company, certified
by a Secretary or an Assistant Secretary of the Company, authorizing the
execution, delivery and performance of this Amendment by the Company, and an
incumbency certificate identifying the officers of the Company authorized to
execute this Amendment on behalf of the Company; and
(d) Such other resolutions, incumbency certificates, good
standing certificates or other documents as the Agent may reasonably request.
6. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Agent and the Lenders as follows:
(a) The Company has the corporate power and authority and the
legal right to execute, deliver and perform this Amendment and has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Amendment. This Amendment has been duly executed and delivered on
behalf of the Company and constitutes the legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms,
subject to the effect of applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting the rights of creditors generally
and the effect of equitable principles whether applied in an action at law or a
suit in equity.
(b) At and as of the date of execution hereof and at and as of
the Effective Date of this Amendment and both prior to and after giving effect
hereto: (i) the representations and warranties of the Company contained in the
Credit Agreement and the other Loan Documents are accurate and complete in all
material respects, and (ii) there has not occurred an Event of Default or
Potential Default other than such as is expressly waived hereunder.
7. NO OTHER AMENDMENT. Except as expressly amended hereby, the Loan
Documents shall remain in full force and effect as written and amended to date.
8. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first above written.
EQUITY MARKETING, INC.,
a Delaware corporation
By: /s/ Teresa Covington
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Name: Teresa Covington
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Title: Vice President, Finance
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SANWA BANK CALIFORNIA, as Agent and as
a Lender
By /s/ Judy Tu
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Name: Judy Tu
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Title: Commercial Banking Officer
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IMPERIAL BANK, as a Lender
By /s/ Jennifer Huang
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Jennifer Huang, Commercial Loan
Officer