EXHIBIT 10.2
REVOLVING CREDIT NOTE
$5,000,000.00 SEPTEMBER 30, 2004
FOR VALUE RECEIVED, the undersigned borrower (the "BORROWER"), promises to
pay to the order of U.S. BANK N.A. (the ("BANK"), the principal sum of FIVE
MILLION AND NO/100 Dollars ($5,000,000.00), payable SEPTEMBER 5, 2005 (the
"MATURITY DATE").
Interest.
The unpaid principal balance will bear interest at an annual rate
described in the Interest Rate Rider attached to this Note.
Payment Schedule.
Interest is payable beginning NOVEMBER 5, 2004, and on the same date
of each CONSECUTIVE month thereafter (except that if a given month
does not have such a date, the last day of such month), plus a final
interest payment with the final payment of principal.
Interest will be computed for the actual number of days principal is
unpaid, using a daily factor obtained by dividing the stated interest rate by
360.
Notwithstanding any provision of this Note to the contrary, upon any
default or at any time during the continuation thereof (including failure to pay
upon maturity), the Bank may, at its option and subject to applicable law,
increase the interest rate on this Note to a rate of 5% per annum plus the
interest rate otherwise payable hereunder. Notwithstanding the foregoing and
subject to applicable law, upon the occurrence of a default by the Borrower or
any guarantor involving bankruptcy, insolvency, receivership proceedings or an
assignment for the benefit of creditors, the interest rate on this Note shall
automatically increase to a rate of 5% per annum plus the rate otherwise payable
hereunder.
In no event will the interest rate hereunder exceed that permitted by
applicable law. If any interest or other charge is finally determined by a court
of competent jurisdiction to exceed the maximum amount permitted by law, the
interest or charge shall be reduced to the maximum permitted by law, and the
Bank may credit any excess amount previously collected against the balance due
or refund the amount to the Borrower.
Subject to applicable law, if any payment is not made on or before its due
date, the Bank may collect a delinquency charge of 5.00% of the unpaid amount.
Collection of the late payment fee shall not be deemed to be a waiver of the
Bank's right to declare a default hereunder.
Without affecting the liability of any Borrower, endorser, surety or
guarantor, the Bank may, without notice, renew or extend the time for payment,
accept partial payments, release or impair any collateral security for the
payment of this Note, or agree not to sue any party liable on it.
This Revolving Credit Note constitutes the Note issued under a Revolving
Credit Agreement dated as of the date hereof between the Borrower and the Bank,
to which Agreement reference is hereby made for a statement of the terms and
conditions under which loans evidenced hereby were or may be made and a
description of the terms and conditions upon which the maturity of this Note may
be accelerated, and for a description of the collateral securing this Note.
This Note is a "transferable record' as defined in applicable law relating
to electronic transactions. Therefore, the holder of this Note may, on behalf of
Borrower, create a microfilm or optical disk or other electronic image of this
Note that is an authoritative copy as defined in such law. The holder of this
Note may store the authoritative copy of such Note in its electronic form and
then destroy the paper original as part of the holder's normal business
practices. The holder, on its own behalf, may control and transfer such
authoritative copy as permitted by such law.
ALL DOCUMENTS ATTACHED HERETO, INCLUDING ANY APPENDICES, SCHEDULES, RIDERS
AND EXHIBITS TO THIS REVOLVING CREDIT NOTE, ARE HEREBY EXPRESSLY INCORPORATED BY
REFERENCE.
The Borrower hereby acknowledges the receipt of a copy of this Note.
(Individual Borrower) OUTDOOR CHANNEL HOLDINGS, INC.
----------------------------------------
Borrower Name (Organization)
a DELAWARE Corporation
Borrower Name N/A By /s/ William A. Owen
Name and Title WILLIAM A. OWEN, CFO
By
Borrower Name N/A Name and Title
INTEREST RATE RIDER
This Rider is made part of the Revolving Credit Note (the "NOTE") in the
original amount of $5,000,000.00 by the undersigned borrower (the "BORROWER")
in favor of U.S. BANK N.A. (the "Bank") as of the date identified below. The
following interest rate description is hereby added to the Note:
Interest Rate Options. Interest on each advance hereunder shall accrue at one of
the following per annum rates selected by the Borrower ("n/a" indicates rate
option is not available, but Prime Rate Loan option must always be selected) (i)
upon notice to the Bank, 0.000% plus the prime rate announced by the Bank from
time to time, as and when such rate changes (a "Prime Rate Loan"); (ii) upon a
minimum of two New York Banking Days prior notice, 1.250% plus the 1, 2, 3, 6 or
12 month LIBOR rate quoted by the Bank from Telerate Page 3750 or any successor
thereto (which shall be the LIBOR rate in effect two New York Banking Days prior
to commencement of the advance), adjusted for any reserve requirement and any
subsequent costs arising from a change in government regulation (a "LIBOR Rate
Loan"); or (iii) upon notice to the Bank, n/a% plus the rate, determined solely
by the Bank, at which the Bank would be able to borrow funds of comparable
amounts in the Money Markets for a 1, 2, 3, 6 or 12 month period, adjusted for
any reserve requirement and any subsequent costs arising from a change in
government regulation (a "Money Market Rate Loan"). The term "New York Banking
Day" means any day (other than a Saturday or Sunday) on which commercial banks
are open for business in New York, New York. The term "Money Markets" refers to
one or more wholesale funding markets available to the Bank, including
negotiable certificates of deposit, commercial paper, eurodollar deposits, bank
notes, federal funds, interest rate swaps or others. No LIBOR Rate Loan or Money
Market Rate Loan may extend beyond the maturity of this Note. In any event, if
the Loan Period for a LIBOR Rate Loan or Money Market Rate Loan should happen to
extend beyond the maturity of this Note, such loan must be prepaid at the time
this Note matures. If a LIBOR Rate Loan or Money Market Rate Loan is prepaid
prior to the end of the Loan Period for such loan, whether voluntarily or
because prepayment is required due to the Note maturing or due to acceleration
of this Note upon default or otherwise, the Borrower agrees to pay all of the
Bank's costs, expenses and Interest Differential (as determined by the Bank)
incurred as a result of such prepayment. The term "Loan Period" means the period
commencing on the advance date of the applicable LIBOR Rate Loan or Money Market
Rate Loan and ending on the numerically corresponding day 1, 2, 3, 6 or 12
months thereafter matching the interest rate term selected by the Borrower;
provided, however, (a) if any Loan Period would otherwise end on a day which is
not a New York Banking Day, then the Loan Period shall end on the next
succeeding New York Banking Day unless the next succeeding New York Banking Day
falls in another calendar month, in which case the Loan Period shall end on the
immediately preceding New York Banking Day; or (b) if any Loan Period begins on
the last New York Banking Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of the Loan
Period), then the Loan Period shall end on the last New York Banking Day of the
calendar month at the end of such Loan Period. The term "Interest Differential"
shall mean that sum equal to the greater of zero or the financial loss incurred
by the Bank resulting from prepayment, calculated as the difference between the
amount of interest the Bank would have earned (from like investments in the
Money Markets as of the first day of the LIBOR Rate Loan or Money Market Rate
Loan) had prepayment not occurred and the interest the Bank will actually earn
(from like investments in the Money Markets as of the date of prepayment) as a
result of the redeployment of funds from the prepayment. Because of the
short-term nature of this facility, the Borrower agrees that the Interest
Differential shall not be discounted to its present value. Any prepayment of a
LIBOR Rate Loan or Money Market Rate Loan shall be in an amount equal to the
remaining entire principal balance of such loan.
In the event the Borrower does not timely select another interest rate option at
least two New York Banking Days before the end of the Loan Period for a LIBOR
Rate Loan or Money Market Rate Loan, the Bank may at any time after the end of
the Loan Period convert the LIBOR Rate Loan or Money Market Rate Loan to a Prime
Rate Loan, but until such conversion, the funds advanced under the LIBOR Rate
Loan or Money Market Rate Loan shall continue to accrue interest at the same
rate as the interest rate in effect for such LIBOR Rate Loan or Money Market
Rate Loan prior to the end of the Loan Period.
The Bank's internal records of applicable interest rates shall be determinative
in the absence of manifest error. Each LIBOR Rate Loan and each Money Market
Rate Loan shall be in a minimum principal amount of $100,000.
Dated as of: SEPTEMBER 30, 2004
(Individual Borrower) OUTDOOR CHANNEL HOLDINGS, INC.
----------------------------------------
Borrower Name (Organization)
a DELAWARE Corporation
Borrower Name N/A By /s/ William A. Owen
Name and Title WILLIAM A. OWEN, CFO
By
Borrower Name N/A Name and Title
REVOLVING CREDIT AGREEMENT
This Revolving Credit Agreement (the "Agreement") is made and entered into by
and between the undersigned borrower (the "Borrower") and the undersigned bank
(the "Bank") as of the date set forth on the last page of this Agreement.
ARTICLE I. LOANS
1.1 REVOLVING CREDIT LOANS. From time to time prior to SEPTEMBER 5, 2005 (the
"MATURITY DATE") or the earlier termination hereof, the Borrower may borrow from
the Sank for working capital purposes up to the aggregate principal amount
outstanding at any one time of the lesser of (i) $5,000,000.00 (the "Loan
Amount"), less letters of credit issued by the Bank, or (ii) if applicable, the
BORROWING BASE (defined below). All revolving loans hereunder will be evidenced
by a single promissory note of the Borrower payable to the order of the Bank in
the principal amount of the Loan Amount (the "Note"). Although the Note will be
expressed to be payable in the full Loan Amount, the Borrower will be obligated
to pay only the amounts actually disbursed hereunder, together with accrued
interest on the outstanding balance at the rates and on the dates specified
therein and such other charges provided for herein. In the event that the
principal amount outstanding under the Note exceeds the Borrowing Base at
anytime, the Borrower will immediately, without request, prepay an amount
sufficient to eliminate such excess.
1.2 BORROWING BASE. The Borrowing Base will be an amount equal to the sum of (i)
n/a% of the face amount of Eligible Accounts, and (ii) the lesser of $n/a or
n/a% of the Borrower's cost of Eligible Inventory, as such cost may be
diminished as a result of any event causing loss or depreciation in value of
Eligible Inventory less (iii) the current outstanding loan balance on note(s) in
the original amount(s) of $n/a and less (iv) undrawn amounts of outstanding
letters of credit issued by Bank or any affiliate thereof. The Borrower will
provide the Bank with information regarding the Borrowing Base in such form and
at such times as the Bank may request. The terms used in this Section 1.2 will
have the meanings set forth in a supplement entitled "Financial Definitions," a
copy of which the Borrower acknowledges having received with this Agreement and
which is incorporated herein by reference.
1.3 ADVANCES AFTER MATURITY OR IN EXCESS OF MAXIMUM LOAN AMOUNT. The Bank shall
have no obligation whatsoever, and the Bank has no present intention, to make
any advance after the Maturity Date or which would cause the principal amount
outstanding under this Agreement to exceed the maximum loan amount or any other
limitations on advances stated in this Agreement. Notwithstanding the foregoing,
the Bank may from time to time, in its sole and absolute discretion, agree to
make an advance after the Maturity Date or which would cause the principal
amount of advances outstanding under this Agreement to exceed the maximum loan
amount or any of the other limitations on advances. The Borrower is and shall be
and remain unconditionally liable to the Bank for the amount of all advances,
including, without limitation, advances in excess of the maximum loan amount or
any other limitation on advances and advances made after the Maturity Date.
Immediately upon the Bank's demand, the Borrower shall pay to the Bank the
amount of any advances made after the Maturity Date or in excess of the maximum
loan amount or any other limitation on advances contained in this Agreement,
together with interest on the principal amount of such excess advances, for so
long as such advances are outstanding, at the highest interest rate from time to
time in effect for such advances. Any such advances shall not be deemed an
extension of this Agreement nor an increase in the maximum loan amount available
for borrowing under this Agreement.
1.4 ADVANCES AND PAYING PROCEDURE. The Bank is authorized and directed to credit
any of the Borrower's accounts with the Bank (or to the account the Borrower
designates in writing) for all loans made hereunder, and the Bank is authorized
to debit such account or any other account of the Borrower with the Bank for the
amount of any principal, interest or expenses due under the Note or other amount
due hereunder on the due date with respect thereto. If, upon any request by the
Borrower to the Bank to issue a wire transfer, there is an inconsistency between
the name of the recipient of the wire and its identification number as specified
by the Borrower, the Bank may, without liability, transmit the payment via wire
based solely upon the identification number.
1.5 CLOSING Fee. The Borrower will pay the Bank a one-time closing fee of $n/a
contemporaneously with execution of this Agreement. This fee is in addition to
all other fees, expenses and other amounts due hereunder.
1.6 LOAN FACILITY FEE. The Borrower will pay a loan facility fee equal to:
[ ] $n/a per annum, payable annually in advance; (or)
[ ] n/a % per annum of the Loan Amount, payable annually in advance;
(or)
[ ] n/a % per annum of the difference between the Loan Amount and the
actual daily unpaid principal amount of the Note outstanding
from time to time, payable quarterly, in arrears, on the last
business day of each third calendar month, and at maturity;
(or)
[ ] n/a % per annum of the actual daily unpaid principal amount of
the Note outstanding from time to time, payable quarterly, in
arrears, on the last business day of each third calendar
month, and at maturity.
The loan facility fee is payable for the entire period that this Agreement is in
effect, regardless of whether any amounts are outstanding hereunder AT any given
time.
1.7 EXPENSES AND ATTORNEYS' FEES. Upon demand, the Borrower will immediately
reimburse the Bank and any Participant (defined below) for all attorneys' fees
and all other costs, fees and out-of-pocket disbursements incurred by the Bank
or any Participant in connection with the preparation, execution, delivery,
administration, defense and enforcement of this Agreement or any of the other
Loan Documents (defined below), including attorneys' fees and all other costs
and fees (a) incurred before or after commencement of litigation or at trial, on
appeal or in any other proceeding, (b) incurred in any bankruptcy proceeding and
(c) related to any waivers or amendments with respect thereto (examples of costs
and fees include but are not limited to fees and costs for: filing, perfecting
or confirming the priority of the Bank's lien, title searches or insurance,
appraisals, environmental audits and other reviews related to the Borrower, any
collateral or the loans, if requested by the Bank). The Borrower will also
reimburse the Bank and any Participant for all costs of collection, including
all attorneys' fees, before and after judgment, and the costs of preservation
and/or liquidation of any collateral.
1.8 COMPENSATING BALANCES. The Borrower will maintain on deposit with the Bank
in non-interest bearing accounts average daily collected balances, in excess of
that required to support account activity and other credit facilities extended
to the Borrower by the Bank, an amount at least equal to the sum of (i) $n/a and
(ii) n/a% of the Loan Amount as computed on a monthly basis. if the Borrower
fails to keep and maintain such balances, it will pay a deficiency fee, payable
within five days after receipt of a statement therefor calculated on the amount
by which the Borrower's average daily balances are less than the requirements
set forth above, computed at a rate equal to the rate set forth in the Note.
1.9 CONDITIONS TO BORROWING. The Bank will not be obligated to make (or continue
to make) advances hereunder unless (i) the Bank has received executed originals
of the Note and all other documents or agreements applicable to the loans
described herein, including but not limited to the documents specified in
Article Ill (collectively with this Agreement the "Loan Documents"), in form and
content satisfactory to the Bank; (ii) if the loan is secured, the Bank has
received confirmation satisfactory to it that the Bank has a properly perfected
security interest, mortgage or lien, with the proper priority; (iii) the Bank
has received certified copies of the Borrower's governance documents and
certification of entity status satisfactory to the Bank and all other relevant
documents; (iv) the Bank has received a certified copy of a resolution or
authorization in form and content satisfactory to the Bank authorizing the loan
and all acts contemplated by this Agreement and all related documents, and
confirmation of proper authorization of all guaranties and other acts of third
parties contemplated hereunder; (v) if required by the Bank, the Bank has been
provided with an Opinion of the Borrower's counsel in form and content
satisfactory to the Bank confirming the matters outlined in Section 2.2 and such
other matters as the Bank requests; (vi) no default exists under this Agreement
or under any other Loan Documents, or under any other agreements by and between
the Borrower and the Bank; and (vii) all proceedings taken in connection with
the transactions contemplated by this Agreement (including any required
environmental assessments), and all instruments, authorizations and other
documents applicable thereto, are satisfactory to the Bank and its counsel.
ARTICLE II. WARRANTIES AND COVENANTS
While any part of the credit granted to the Borrower under this Agreement or the
other Loan Documents is available or any obligations under any of the Loan
Documents are unpaid or outstanding, the Borrower continuously warrants and
agrees as follows:
2.1 ACCURACY OF INFORMATION. All information, certificates or statements given
to the Bank pursuant to this Agreement and the other Loan Documents will be true
and complete when given.
2.2 ORGANIZATION AND AUTHORITY; LITIGATION. This Agreement and the other Loan
Documents are the legal, valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their terms. The execution,
delivery and performance of this Agreement and all other Loan Documents to which
the Borrower is a party (i) are within the borrower's power; (ii) have been duly
authorized by all appropriate entity action; (iii) do not require the approval
of any governmental agency; and (iv) will not violate any law, agreement or
restriction by which the Borrower is bound. If the Borrower is not an
individual, the Borrower is validly existing and in good standing under the laws
of its state of organization, has all requisite power and authority and
possesses all licenses necessary to conduct its business and own its properties.
There is no litigation or administrative proceeding threatened or pending
against the Borrower which would, if adversely determined, have a material
adverse effect on the Borrowers financial condition or its property.
2.3 EXISTENCE; BUSINESS ACTIVITIES; ASSETS; CHANGE OF CONTROL. The Borrower will
(i) preserve its existence, rights and franchises; (ii) not make any material
change in the nature or manner of its business activities; (iii) not liquidate,
dissolve, acquire another entity or merge or consolidate with or into another
entity or change its form of organization; (iv) not amend its organizational
documents in any manner that may conflict with any term or condition of the Loan
Documents; and (v) not sell, lease, transfer or otherwise dispose of all or
substantially all of its assets. Other than the transfer to a trust beneficially
controlled by the transferor, no event shall occur which causes or results in a
transfer of majority ownership of the Borrower while any Obligations are
outstanding or while the Bank has any obligation to provide funding to the
Borrower.
2.4 USE OF PROCEEDS; MARGIN STOCK; SPECULATION. Advances by the Bank hereunder
will be used exclusively by the Borrower for working capital and other regular
and valid purposes. The Borrower will not, without the prior written consent of
the Bank, redeem, purchase, or retire any of the capital stock or declare or pay
any dividends, or make any other payments or distributions of a similar type or
nature including withdrawal distributions. The Borrower will not use any of the
loan proceeds to purchase or carry "margin" stock (as defined in Regulation U of
the Board of Governors of the Federal Reserve System). No part of any of the
proceeds will be used for speculative investment purposes, including, without
limitation, speculating or hedging in the commodities and/or futures market.
2.5 ENVIRONMENTAL MATTERS. Except as disclosed in a written schedule attached to
this Agreement (if no schedule is attached, there are no exceptions), there
exists no uncorrected violation by the Borrower of any federal, state or local
laws (including statutes, regulations, ordinances or other governmental
restrictions and requirements) relating to the discharge of air pollutants,
water pollutants or process waste water or otherwise relating to the environment
or Hazardous Substances as hereinafter defined, whether such laws currently
exist or are enacted in the future (collectively "ENVIRONMENTAL LAWS"). The term
"HAZARDOUS SUBSTANCES" will mean any hazardous or toxic wastes, chemicals or
other substances, the generation, possession or existence of which is prohibited
or governed by any Environmental Laws. The Borrower is not subject to any
judgment, decree, order or citation, or a party to (or threatened with) any
litigation or administrative proceeding, which asserts that the Borrower (i) has
violated any Environmental Laws; (ii) is required to clean up, remove or take
remedial or other action with respect to any Hazardous Substances (collectively
"REMEDIAL ACTION"); or (iii) is required to pay all or a portion of the cost of
any Remedial Action, as a potentially responsible party. Except as disclosed on
the Borrower's environmental questionnaire provided to the Bank, there are not
now, nor to the Borrower's knowledge after reasonable investigation have there
ever been, any Hazardous Substances (or tanks or other facilities for the
storage of Hazardous Substances) stored, deposited, recycled or disposed of on,
under or at any real estate owned or occupied by the Borrower during the periods
that the Borrower owned or occupied such real estate, which if present on the
real estate or in soils or ground water, could require Remedial Action. To the
Borrower's knowledge, there are no proposed or pending changes in Environmental
Laws which would adversely affect the Borrower or its business, and there are no
conditions existing currently or likely to exist while the Loan Documents are in
effect which would subject the Borrower to Remedial Action or other liability.
The Borrower currently complies with and will continue to timely comply with all
applicable Environmental Laws; and will provide the Bank, immediately upon
receipt, copies of any correspondence, notice, complaint, order or other
document from any source asserting or alleging any circumstance or condition
which requires or may require a financial contribution by the Borrower or
Remedial Action or other response by or on the part of the Borrower under
Environmental Laws, or which seeks damages or civil, criminal or punitive
penalties from the Borrower for an alleged violation of Environmental Laws.
2.6 COMPLIANCE WITH LAWS. The Borrower has complied with all laws applicable to
its business and its properties, and has all permits, licenses and approvals
required by such laws, copies of which have been provided to the Bank.
2.7 RESTRICTION ON INDEBTEDNESS. The Borrower will not create, incur, assume or
have outstanding any indebtedness for borrowed money (including capitalized
leases) except (i) any indebtedness owing to the Bank and its affiliates, and
(ii) any other indebtedness outstanding on the date hereof, and shown on the
Borrower's financial statements delivered to the Bank prior to the date hereof,
provided that such other indebtedness will not be increased.
2.8 RESTRICTION ON LIENS. The Borrower will not create, incur, assume or permit
to exist any mortgage, pledge, encumbrance or other lien or levy upon or
security interest in any of the Borrower's property now owned or hereafter
acquired, except (i) taxes and assessments which are either not delinquent or
which are being contested in good faith with adequate reserves provided; (ii)
easements, restrictions and minor title irregularities which do not, as a
practical matter, have an adverse effect upon the ownership and use of the
affected property; (iii) liens in favor of the Bank and its affiliates; and (iv)
other liens disclosed in writing to the Bank prior to the date hereof.
2.9 RESTRICTION ON CONTINGENT LIABILITIES. The Borrower will not guarantee or
become a surety or otherwise contingently liable for any obligations of others,
except pursuant to the deposit and collection of checks and similar matters in
the ordinary course of business.
2.10 INSURANCE. The Borrower will maintain insurance to such extent, covering
such risks and with such insurers as is usual and customary for businesses
operating similar properties, and as is satisfactory to the Bank, including
insurance for fire and other risks insured against by extended coverage, public
liability insurance and workers' compensation insurance; and will designate the
Bank as loss payee with a "Lender's Loss Payable" endorsement on any casualty
policies and take such other action as the Bank may reasonably request to ensure
that the Bank will receive (subject to no other interests) the insurance
proceeds on the Bank's collateral.
2.11 TAXES AND OTHER LIABILITIES. The Borrower will pay and discharge, when due,
all of its taxes, assessments and other liabilities, except when the payment
thereof is being contested in good faith by appropriate procedures which will
avoid foreclosure of liens securing such items, and with adequate reserves
provided therefor.
2.12 FINANCIAL STATEMENTS AND REPORTING. The financial statements and other
information previously provided to the Bank or provided to the Bank in the
future are or will be complete and accurate and prepared in accordance with
generally accepted accounting principles. There has been no material adverse
change in the Borrower's financial condition since such information was provided
to the Bank. The Borrower will (i) maintain accounting records in accordance
with generally recognized and accepted principles of accounting consistently
applied throughout the accounting periods involved; (ii) provide the Bank with
such information concerning its business affairs and financial condition
(including insurance coverage) as the Bank may request; and (iii) without
request, provide the Bank with management-prepared financial statements:
[X] quarterly within 60 days of the end of each quarter;
[ ] monthly within n/a days of the end of each month;
and annual audited financial statements prepared by an accounting firm
acceptable to the Bank within 90 days of the end of each fiscal year.
2.13 INSPECTION OF PROPERTIES AND RECORDS; FISCAL YEAR. The Borrower will permit
representatives of the Bank to visit and inspect any of the properties and
examine any of the books and records of the Borrower at any reasonable time and
as often as the Bank may reasonably desire. The Borrower will not change its
fiscal year.
2.14 FINANCIAL STATUS. The Borrower will maintain at all times:
(i) Net Working Capital in the (v) Capital Expenditures not to exceed $n/a
amount of at least $n/a per fiscal year.
(ii) Tangible Net Worth in the (vi) Cash Flow Coverage Ratio of at least n/a.
amount of at least $n/a
(iii) Debt to Worth Ratio of not (vii) Officers, Directors, Partners, Members,
n/a and Management Salaries and Other
Compensation not to exceed $n/a per
fiscal year.
(iv) Current Ratio of at least n/a.
The terms used in this Section 2.14 will have the meanings set forth in a
supplement entitled "Financial Definitions," a copy of which the Borrower hereby
acknowledges having received with this Agreement and which is incorporated
herein by reference.
2.15 PAID-IN-FULL PERIOD. [X] If checked here, all revolving loans under this
Agreement and the Note must be paid in full for a period of at least 30
consecutive days during each fiscal year.
ARTICLE III. COLLATERAL AND GUARANTIES
3.1 COLLATERAL. This Agreement and the Note are secured by any and all security
interests, pledges, mortgages/deeds of trust (except any mortgage/deed of trust
expressly limited by its terms to a specific obligation of Borrower to Bank) or
liens now or hereafter in existence granted to the Bank to secure indebtedness
of the Borrower to the Bank, including without limitation as described in the
following documents:
[ ] Real Estate Mortgage(s)/Deed(s) of Trust dated______________________________
covering real estate located at_____________________________________________
____________________________________________________________________________
[X] Security Agreement(s) dated 09/30/04
[ ] Possessory Collateral Pledge Agreement(s) dated_____________________________
[ ] Other_______________________________________________________________________
________________________________________________________________________________
3.2 GUARANTIES. This Agreement and the Note are guarantied by each and every
guaranty now or hereafter in existence guarantying the indebtedness of the
Borrower to the Bank (except for any guaranty expressly limited by its terms to
a specific separate obligation of Borrower to the Bank) including, without
limitation, the following:______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
3.3 CREDIT BALANCES; SETOFF. As additional security for the payment of the
obligations described in the Loan Documents and any other obligations of the
Borrower to the Bank of any nature whatsoever (collectively the "OBLIGATIONS"),
the Borrower hereby grants to the Bank a security interest in, a lien on and an
express contractual right to set off against all depository account balances,
cash and any other property of the Borrower now or hereafter in the possession
of the Bank and the right to refuse to allow withdrawals from any account
(collectively "SETOFF"). The Bank may, at any time upon the occurrence of a
default hereunder (notwithstanding any notice requirements or grace/cure periods
under this or other agreements between the Borrower and the Bank) Setoff against
the Obligations WHETHER OR NOT THE OBLIGATIONS (INCLUDING FUTURE INSTALLMENTS)
ARE THEN DUE OR HAVE BEEN ACCELERATED, ALL WITHOUT ANY ADVANCE OR
CONTEMPORANEOUS NOTICE OR DEMAND OF ANY KIND TO THE BORROWER, SUCH NOTICE AND
DEMAND BEING EXPRESSLY WAIVED.
The omission of any reference to an agreement in Sections 3.1 and 3.2 above will
not affect the validity or enforceability thereof. The rights and remedies of
the Bank outlined in this Agreement and the documents identified above are
intended to be cumulative.
ARTICLE IV. DEFAULTS
4.1 DEFAULTS. NOTWITHSTANDING ANY CURE PERIODS DESCRIBED BELOW, THE BORROWER
WILL IMMEDIATELY NOTIFY THE BANK IN WRITING WHEN THE BORROWER OBTAINS KNOWLEDGE
OF THE OCCURRENCE OF ANY DEFAULT SPECIFIED BELOW. Regardless of whether the
Borrower has given the required notice, the occurrence of one or more of the
following will constitute a default:
(a) NONPAYMENT. The Borrower shall fail to pay (i) any interest due on the Note
or any fees, charges, costs or expenses under the Loan Documents by 5 days
after the same becomes due; or (ii) any principal amount of the Note when
due.
(b) NONPERFORMANCE. The Borrower or any guarantor of Borrower's Obligations to
the Bank ("Guarantor") shall fail to perform or observe any agreement,
term, provision, condition, or covenant (other than a default occurring
under (a), (c), (d), (e), (f) or (g) of this Section 4.1) required to be
performed or observed by the Borrower or any Guarantor hereunder or under
any other Loan Document or other agreement with or in favor of the Bank
(c) MISREPRESENTATION. Any financial information, statement, certificate,
representation or warranty given to the Bank by the Borrower or any
Guarantor (or any of their representatives) in connection with entering
into this Agreement or the other Loan Documents and/or any borrowing
thereunder, or required to be furnished under the terms thereof, shall
prove untrue or misleading in any material respect (as determined by the
Bank in the exercise of its judgment) as of the time when given.
(d) DEFAULT ON OTHER OBLIGATIONS. The Borrower or any Guarantor shall be in
default under the terms of any loan agreement, promissory note, lease,
conditional sale contract or other agreement, document or instrument
evidencing, governing or securing any indebtedness owing by the Borrower or
any Guarantor to the Bank or any indebtedness in excess of $10,000 owing by
the Borrower to any third party, and the period of grace, if any, to cure
said default shall have passed.
(e) JUDGMENTS. Any judgment shall be obtained against the Borrower or any
Guarantor which, together with all other outstanding unsatisfied judgments
against the Borrower (or such Guarantor), shall exceed the sum of $10,000
and shall remain unvacated, unbonded or unstayed for a period of 30 days
following the date of entry thereof.
(f) INABILITY TO PERFORM; BANKRUPTCY/INSOLVENCY. (i) The Borrower or any
Guarantor shall die or cease to exist; or (ii) any Guarantor shall attempt
to revoke any guaranty of the Obligations described herein, or any guaranty
becomes unenforceable in whole or in part for any reason; or (iii) any
bankruptcy, insolvency or receivership proceedings, or an assignment for
the benefit of creditors, shall be commenced under any Federal or state law
by or against the Borrower or any Guarantor; or (iv) the Borrower or any
Guarantor shall become the subject of any out-of-court settlement with its
creditors; or (v) the Borrower or any Guarantor is unable or admits in
writing its inability to pay its debts as they mature; or (vi) if the
Borrower is a limited liability company, any member thereof shall withdraw
or otherwise become disassociated from the Borrower.
(g) ADVERSE CHANGE; INSECURITY. (i) There is a material adverse change in the
business, properties, financial condition or affairs of the Borrower or any
Guarantor, or in any collateral securing the Obligations; or (ii) the Bank
in good faith deems itself insecure.
4.2 TERMINATION OF LOANS; ADDITIONAL BANK RIGHTS. Upon the Maturity Date or the
occurrence of any of the events identified in Section 4.1, the Bank may at any
time (notwithstanding any notice requirements or grace/cure periods under this
or other agreements between the Borrower and the Bank) (i) immediately terminate
its obligation, if any, to make additional loans to the Borrower; (ii) Setoff;
and/or (iii) take such other steps to protect or preserve the Bank's interest in
any collateral, including without limitation, notifying account debtors to make
payments directly to the Bank, advancing funds to protect any collateral and
insuring collateral at the Borrower's expense; all without demand or notice of
any kind, all of which are hereby waived.
4.3 ACCELERATION OF OBLIGATIONS. Upon the Maturity Date or the occurrence of any
of the events identified in sections 4.1 (a) through 4.1(e) and 4.1(g), and the
passage of any applicable cure periods, the bank may at any time thereafter, by
written notice to the Borrower, declare the unpaid principal balance of any
Obligations, together with the interest accrued thereon and other amounts
accrued hereunder and under the other Loan Documents, to be immediately due and
payable; and the unpaid balance will thereupon be due and payable, all without
presentation, demand, protest or further notice of any kind, all of which are
hereby waived, and notwithstanding anything to the contrary contained herein or
in any of the other Loan Documents. Upon the occurrence of any event under
Section 4.1(f), the unpaid principal balance of any Obligations, together with
all interest accrued thereon and other amounts accrued hereunder and under the
other Loan Documents, will thereupon be immediately due and payable, all without
presentation, demand, protest or notice of any kind, all of which are hereby
waived, and notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents.
Nothing contained in Section 4.1, Section 4.2 or this section will limit the
Bank's right to Setoff as provided in Section 3.3 or otherwise in this
Agreement.
4.4 OTHER REMEDIES. Nothing in this Article IV is intended to restrict the
Bank's rights under any of the Loan Documents or at law, and the Bank may
exercise all such rights and remedies as and when they are available.
ARTICLE V. OTHER TERMS
5.1 FINANCIAL DEFINITIONS SUPPLEMENT. If a Borrowing Base or covenants regarding
financial status apply to this loan, the "Financial Definitions" Supplement
identified in Sections 1.2 and 2.14 of this Agreement is hereby incorporated
into this Agreement The Borrower acknowledges receiving a copy of such
Supplement.
5.2 ADDITIONAL TERMS; ADDENDUM/SUPPLEMENTS. The warranties, covenants,
conditions and other terms described in this Section and/or in the Addendum
and/or other attached document(s) referenced in this Section are incorporated
into this Agreement:
SEE ATTACHED ADDENDUM_______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
ARTICLE VI. MISCELLANEOUS
6.1 DELAY; CUMULATIVE REMEDIES. No delay on the part of the Bank in exercising
any right, power or privilege hereunder or under any of the other Loan Documents
will operate as a waiver thereof, nor will any single or partial exercise of any
right, power or privilege hereunder preclude other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and remedies
herein specified are cumulative and are not exclusive of any rights or remedies
which the Bank would otherwise have.
6.2 RELATIONSHIP TO OTHER DOCUMENTS. The warranties, covenants and other
obligations of the Borrower (and the rights and remedies of the Bank) that are
outlined in this Agreement and the other Loan Documents are intended to
supplement each other. In the event of any inconsistencies in any of the terms
in the Loan Documents, all terms will be cumulative so as to give the Bank the
most favorable rights set forth in the conflicting documents, except that if
there is a direct conflict between any preprinted terms and specifically
negotiated terms (whether included in an addendum or otherwise), the
specifically negotiated terms will control.
6.3 SUCCESSORS. The rights, options, powers and remedies granted in this
Agreement and the other Loan Documents shall be binding upon the Borrower and
the Bank and their respective successors and assigns, and shall inure to the
benefit of the Borrower and the Bank and the successors and assigns of the Bank,
including without limitation any purchaser of any or all of the rights and
obligations of the Bank under the Note and the other Loan Documents. The
Borrower may not assign its rights or obligations under this Agreement or any
other Loan Documents without the prior written consent of the Bank.
6.4 DISCLOSURE. The Bank may, in connection with any sale or potential sale of
all or any interest in the Note and other Loan Documents, disclose any financial
information the Bank may have concerning the Borrower to any purchaser or
potential purchaser. From time to time, the Bank may, in its discretion and
without obligation to the Borrower, any Guarantor or any other third party,
disclose information about the Borrower and this loan to any Guarantor, surety
or other accommodation party. This provision does not obligate the Bank to
supply any information or release the Borrower from its obligation to provide
such information, and the Borrower agrees to keep all Guarantors, sureties or
other accommodation parties advised of its financial condition and other matters
which may be relevant to their obligations to the Bank.
6.5 INDEMNIFICATION. Except for harm arising from the Bank's willful misconduct,
the Borrower hereby indemnifies and agrees to defend and hold the Bank harmless
from any and all losses, costs, damages, claims and expenses of any kind
suffered by or asserted against the Bank relating to claims by third parties
arising out of the financing provided under the Loan Documents or related to any
collateral (including, without limitation, the Borrower's failure to perform its
obligations relating to Environmental Matters described in Section 2.5 above).
This indemnification and hold harmless provision will survive the termination of
the Loan Documents and the satisfaction of the Obligations due the Bank.
6.6 NOTICE OF CLAIMS AGAINST BANK; LIMITATION OF CERTAIN DAMAGES. In order to
allow the Bank to mitigate any damages to the Borrower from the Bank's alleged
breach of its duties under the Loan Documents or any other duty, if any, to the
Borrower, the Borrower agrees to give the Bank immediate written notice of any
claim or defense it has against the Bank, whether in tort or contract, relating
to any action or inaction by the Bank under the Loan Documents, or the
transactions related thereto, or of any defense to payment of the Obligations
for any reason. The requirement of providing timely notice to the Bank
represents the parties' agreed-to standard of performance regarding claims
against the Bank. Notwithstanding any claim that the Borrower may have against
the Bank, and regardless of any notice the Borrower may have given the Bank, the
Bank will not be liable to the Borrower for consequential and/or special damages
arising therefrom, except those damages arising from the Bank's willful
misconduct.
6.7 NOTICES. Notice of any record shall be deemed delivered when the record has
been (a) deposited in the United States Mail, postage pre-paid, (b) received by
overnight delivery service, (c) received by telex, (d) received by telecopy, (e)
received through the internet, or (f) when personally delivered.
6.8 PAYMENTS. Payments due under the Note and other Loan Documents will be made
in lawful money of the United States. All payments may be applied by the Bank to
principal, interest and other amounts due under the Loan Documents in any order
which the BANK elects.
6.9 APPLICABLE LAW AND JURISDICTION; INTERPRETATION; JOINT LIABILITY;
SEVERABILITY. This Agreement and all other Loan Documents will be governed by
and interpreted in accordance with the internal laws of the State of California,
except to the extent superseded by federal law. THE BORROWER HEREBY CONSENTS TO
THE EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITUATED IN THE COUNTY
OR FEDERAL JURISDICTION OF THE BANK'S BRANCH WHERE THE LOAN WAS ORIGINATED, AND
WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, WITH REGARD TO ANY ACTIONS,
CLAIMS, DISPUTES OR PROCEEDINGS RELATING TO THIS AGREEMENT, THE NOTE, THE
COLLATERAL, ANY OTHER LOAN DOCUMENT, OR ANY TRANSACTIONS ARISING THEREFROM, OR
ENFORCEMENT AND/OR INTERPRETATION OF ANY OF THE FOREGOING. Nothing herein will
affect the Bank's rights to serve process in any manner permitted by law, or
limit the Bank's right to bring proceedings against the Borrower in the
competent courts of any other jurisdiction or jurisdictions. This Agreement, the
other Loan Documents and any amendments hereto (regardless of when executed)
will be deemed effective and accepted only upon the Bank's receipt of the
executed originals thereof. If there is more than one Borrower, the liability of
the Borrowers will be joint and several, and the reference to "Borrower" will be
deemed to refer to all Borrowers. Invalidity of any provision of this Agreement
shall not affect the validity of any other provision.
6.10 COPIES; ENTIRE AGREEMENT; MODIFICATION. The Borrower hereby acknowledges
the receipt of a copy of this Agreement and all other Loan Documents. This
Agreement is a "transferable record" as defined in applicable law relating to
electronic transactions. Therefore, the holder of this Agreement may, on behalf
of Borrower, create a microfilm or optical disk or other electronic image of
this Agreement that is an authoritative copy as defined in such law. The holder
of this Agreement may store the authoritative copy of such Agreement in its
electronic form and then destroy the paper original as part of the holder's
normal business practices. The holder, on its own behalf, may control and
transfer such authoritative copy as permitted by such law.
IMPORTANT: READ BEFORE SIGNING. THE TERMS 0F THIS AGREEMENT SHOULD BE READ
CAREFULLY BECAUSE ONLY THOSE TERMS IN WRITING, EXPRESSING CONSIDERATION AND
SIGNED BY THE PARTIES ARE ENFORCEABLE. NO OTHER TERMS OR ORAL PROMISES NOT
CONTAINED IN THIS WRITTEN CONTRACT MAY BE LEGALLY ENFORCED. THE TERMS OF THIS
AGREEMENT MAY ONLY BE CHANGED BY ANOTHER WRITTEN AGREEMENT. THIS NOTICE SHALL
ALSO BE EFFECTIVE WITH RESPECT TO ALL OTHER CREDIT AGREEMENTS NOW IN EFFECT
BETWEEN BORROWER AND THE BANK. A MODIFICATION OF ANY OTHER CREDIT AGREEMENTS NOW
IN EFFECT BETWEEN BORROWER AND THE BANK, WHICH OCCURS AFTER RECEIPT BY BORROWER
OF THIS NOTICE, MAY BE MADE ONLY BY ANOTHER WRITTEN INSTRUMENT. ORAL OR IMPLIED
MODIFICATIONS TO SUCH CREDIT AGREEMENTS ARE NOT ENFORCEABLE AND SHOULD NOT BE
RELIED UPON.
6.11 WAIVER OF JURY TRIAL. THE BORROWER AND THE BANK HEREBY JOINTLY AND
SEVERALLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING
RELATING TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS THEREUNDER, ANY
COLLATERAL SECURING THE OBLIGATIONS, OR ANY TRANSACTION ARISING THEREFROM OR
CONNECTED THERETO. THE BORROWER AND THE BANK EACH REPRESENTS TO THE OTHER THAT
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY GIVEN.
6.12 ATTACHMENTS. ALL DOCUMENTS ATTACHED HERETO, INCLUDING ANY APPENDICES,
SCHEDULES, RIDERS, AND EXHIBITS TO THIS AGREEMENT, ARE HEREBY EXPRESSLY
INCORPORATED BY REFERENCE.
IN WITNESS WHEREOF, the undersigned have executed this REVOLVING CREDIT
AGREEMENT as of SEPTEMBER 30, 2004
(Individual Borrower) OUTDOOR CHANNEL HOLDINGS, INC.
----------------------------------------
Borrower Name (Organization)
a DELAWARE Corporation
Borrower Name N/A By /s/ William A. Owen
Name and Title WILLIAM A. OWEN, CFO
By
Borrower Name N/A Name and Title
U.S. BANK N.A.
By /s/ Maureen K. Sullivan
Name and Title MAUREEN K. SULLIVAN,
VICE PRESIDENT
Borrower Address: 43445 BUSINESS PARK DRIVE, SUITE 113, TEMECULA, CA 92590
Borrower Telephone No.: ________________________________________________________
BUSINESS SECURITY AGREEMENT
This Business Security Agreement ("AGREEMENT") is made and entered into by
the undersigned borrower, guarantor and/or other obligor/pledgor (the "DEBTOR")
in favor of U.S. BANK N.A., 555 SW OAK, PORTLAND, OR 97204 (the "BANK") as of
the date set forth on the last page of this Agreement.
ARTICLE I. SECURITY INTEREST
1.1 GRANT OF SECURITY INTEREST. Debtor hereby grants a security interest in
and collaterally assigns the Collateral (defined below) to Bank to secure all of
Debtor's Obligations (defined below) to Bank. The intent of the parties hereto
is that the Collateral secures all Obligations of Debtor to Bank, whether or not
such Obligations exist under this Agreement or any other agreements, whether now
or hereafter existing, between Debtor and Bank or in favor of Bank, including,
without limitation, any note, any loan or security agreement, any lease, any
mortgage, deed of trust or other pledge of an interest in real or personal
property, any guaranty, any letter of credit or banker's acceptance, any
agreement for any other services or credit extended by Bank to Debtor even
though not specifically enumerated herein, and any other agreement with Bank
(together and individually, the "Loan Documents").
1.2 "COLLATERAL" means all of the following whether now owned or existing
or hereafter acquired by Debtor (or by Debtor with spouse), wherever located
(including all documents, general intangibles, additions and accessions, spare
and repair parts, special tools, replacements, returned or repossessed goods and
books and records relating to the following; and all proceeds, supporting
obligations and products of the following) [CHECK ALL THAT APPLY]:
[X] All accounts, instruments, documents, chattel paper, general intangibles,
contract rights, investment property (including any securities entitlements
and/or securities accounts held by Debtor), certificates of deposit,
deposit accounts, and letter of credit rights; and
[X] inventory; and
[X] All equipment; and
[ ] All fixtures; and
[ ] Specific Collateral (the following, whether constituting instruments,
chattel paper, general intangibles, equipment, accounts, inventory,
fixtures or other collateral):
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
In the event only the first three boxes are checked, Debtor acknowledges and
agrees that the foregoing collateral description covers all assets (except
fixtures) of Debtor. Bank may at any time and from time to time file financing
and continuation statements and amendments thereto reflecting the same.
1.3 "OBLIGATIONS" means all Debtor's debts (except for consumer credit if
Debtor is a natural person), liabilities, obligations, covenants, warranties,
and duties to Bank (plus its affiliates including any credit card debt, but
specifically excluding any type of consumer credit), whether now or hereafter
existing or incurred, whether liquidated or unliquidated, whether absolute or
contingent, whether arising out of the Loan Documents or otherwise, and all
other debts and obligations due Bank under any lease, agricultural, real estate
or other financing transaction and regardless of whether such financing is
related in time or type to the financing provided at the time of grant of this
security interest, and regardless of whether such Obligations arise out of
existing or future credit granted by Bank to any Debtor, to any Debtor and
others, to others guaranteed, endorsed or otherwise secured by any Debtor or to
any debtor-in-possession or other successor-in-interest of any Debtor, and
including principal, interest, fees, expenses and charges relating to any of the
foregoing.
1.4 OTHER DEFINITIONS. Unless otherwise defined, the terms set forth in
this Agreement shall have the meanings set forth in the Uniform Commercial Code
as adopted in the Loan Documents and as amended from time to time. The defined
terms hereunder shall be interpreted in a manner most favorable to Bank.
ARTICLE 11. WARRANTIES AND COVENANTS
In addition to all other warranties and covenants of Debtor under the Loan
Documents which are expressly incorporated herein as part of this Agreement and
while any part of the credit granted Debtor under the Loan Documents is
available or any Obligations of Debtor to Bank are unpaid or outstanding, Debtor
continuously warrants and agrees as follows:
2.1 DEBTOR'S NAME, LOCATION; NOTICE OF LOCATION CHANGES. Except as
otherwise disclosed to Bank in writing, Debtor's name and organizational
structure have remained the same during the past five (5) years. Debtor will
continue to use only the name set forth with Debtor's signature unless Debtor
gives Bank prior written notice of any change. Furthermore, Debtor shall not do
business under another name nor use any trade name without giving ten (10) days
prior written notice to Bank. Debtor will not change its status or
organizational structure without the prior written consent of Bank. Debtor will
not change its location or registration (if Debtor is a registered organization)
to another state without prior written notice to Bank. The address appearing in
the Article 9 Certificate, if any, is Debtor's chief executive office (or
residence if Debtor is a sole proprietor).
2.2 STATUS OF COLLATERAL. All Collateral is genuine and validly existing.
Except for items of insignificant value or as otherwise reflected in writing by
Debtor to Bank under a borrowing base or otherwise, (i) Collateral constituting
inventory, equipment and fixtures is in good condition, not obsolete and is
either currently saleable or usable; and (ii) Collateral constituting accounts,
contract rights, notes, chattel paper and other third-party obligations to pay
is fully enforceable in accordance with its terms and not subject to return,
dispute, setoff, credit allowance or adjustment, except for discounts for prompt
payment. Unless Debtor provides Bank with written notice to the contrary, Debtor
has no notice or knowledge of anything that Would impair the ability of any
third-party obligor to pay any debt to Debtor when due.
2.3 OWNERSHIP; MAINTENANCE OF COLLATERAL; RESTRICTIONS ON LIENS AND
DISPOSITIONS. Debtor is the sole owner of the Collateral free of all liens,
claims, other encumbrances and security interests except as permitted in writing
by Bank. Debtor shall: (i) maintain the Collateral in good condition and repair
(reasonable wear and tear excepted), and not permit its value to be impaired;
(ii) not permit waste, removal or loss of identity of the Collateral; (iii) keep
the Collateral free from all liens, executions, attachments, claims,
encumbrances and security interests (other than Bank's paramount security
interest and those permitted in writing by Bank); (iv) defend the Collateral
against all claims and legal proceedings by persons other than Bank; (v) pay and
discharge when due all taxes, levies and other charges or lees upon the
Collateral except for payment of taxes contested by Debtor in good faith by
appropriate proceedings so long as no levy or lien has been imposed upon the
Collateral; (vi) not lease, sell or transfer the Collateral to any party nor
move it to any new location outside of the ordinary course of business; (vii)
not permit the Collateral, without the consent of Bank, to become a fixture or
an accession to other goods; (viii) not permit the Collateral td be used in
violation of any applicable law, regulation or policy of insurance; and, (ix) as
to the Collateral consisting of instruments and chattel paper, preserve Bank's
rights in it against all other parties. Notwithstanding the above, Debtor may
sell, lease or transfer inventory in the ordinary course of its business
provided that no sale, lease or transfer shall include any transfer or sale in
satisfaction (partial or complete) of a debt owed by Debtor; title WILL not pass
to buyer until Debtor physically delivers the goods to buyer or Debtor ships the
goods F.O.B. to buyer's destination; and sales and/or leases to Debtor's
affiliates shall be for fair market value, cash on delivery, with the proceeds
remitted to Bank.
2.4 MAINTENANCE OF SECURITY INTEREST; PURCHASE MONEY SECURITY INTERESTS.
Debtor shall take any action requested by Bank to preserve the Collateral and to
establish the value of, the priority of, to perfect, to continue the perfection
of or to enforce Bank's interest in the Collateral and Bank's rights under this
Agreement; and shall pay all costs and expenses related thereto. Debtor shall
also cooperate with Bank in obtaining control (for purposes of perfection under
the Uniform Commercial Code) of Collateral consisting of deposit accounts,
investment property, letter of credit rights, electronic chattel paper and any
other collateral where Bank may obtain perfection through control. Debtor hereby
authorizes Bank to take any and all actions described above and in place of
Debtor with respect to the Collateral and hereby ratifies any such actions Bank
has taken prior to the date of this Agreement and hereafter, which actions may
include, without limitation, filing UCC financing statements and obtaining or
attempting to obtain control agreements from holders of the Collateral. Debtor
and Bank intend to maintain the full effect of any purchase money security
interest granted in favor of Bank notwithstanding the fact that the Collateral
so purchased is also pledged as security for other Obligations under the Loan
Documents.
2.5 COLLATERAL INSPECTIONS; MODIFICATIONS AND CHANGES IN COLLATERAL. At
reasonable times, Bank may examine the Collateral and Debtor's records
pertaining to it, wherever located, and make copies of such records at Debtor's
expense; and Debtor shall assist Bank in so doing. Without Bank's prior written
consent, Debtor shall not alter, modify, discount, extend, renew or cancel any
Collateral, except for ordinary discounts for prompt payment on accounts,
physical modifications to the inventory occurring in the manufacturing process
or alterations to equipment which do not materially affect its value. Debtor
shall promptly notify Bank in writing of any material change in the condition of
the Collateral and of any change in location of the Collateral.
2.6 COLLATERAL RECORDS, REPORTS AND STATEMENTS. Debtor shall keep accurate
and complete records respecting the Collateral in such form as Bank may approve.
At such times as Bank may require, Debtor shall furnish to Bank any
records/information Bank might require, including, without limitation, a
statement certified by Debtor and in such form and containing such information
as may be prescribed by Bank showing the current status and value of the
Collateral.
2.7 CHATTEL PAPER, INSTRUMENTS, ETC. Chattel paper, instruments, drafts,
notes, acceptances, and other documents which constitute Collateral shall be on
forms satisfactory to Bank. Debtor shall promptly mark chattel paper to indicate
conspicuously Bank's security interest therein, shall not deliver any chattel
paper or negotiable instruments to any other entity and, upon request, shall
deliver all original chattel paper, instruments, drafts, notes, acceptances and
other documents which constitute Collateral to Bank.
2.8 UNITED STATES GOVERNMENT CONTRACTS. If any accounts or contract rights
arose out of contracts with the United States or any of its departments,
agencies or instrumentalities, Debtor shall promptly notify Bank and execute any
writings required by Bank so that all money due or to become due under such
contracts shall be assigned to Bank under the Federal Assignment of Claims Act.
2.9 ENVIRONMENTAL MATTERS. Except as disclosed in a written schedule
attached to this Agreement (if no schedule is attached, there are no
exceptions), there exists no uncorrected violation by Debtor of any federal,
state or local laws (including statutes, regulations, ordinances or other
governmental restrictions and requirements) relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to the
environment or Hazardous Substances as hereinafter defined, whether such laws
currently exist or are enacted in the future (collectively "ENVIRONMENTAL
LAWS"). The term "HAZARDOUS SUBSTANCES" shall mean any hazardous or toxic
wastes, chemicals or other substances, the generation, possession or existence
of which is prohibited or governed by any Environmental Laws. Debtor is not
subject to any judgment, decree, order or citation, or a party to (or threatened
with) any litigation or administrative proceeding, which asserts that Debtor (i)
has violated any Environmental Laws; (ii) is required to clean up, remove or
take remedial or other action with respect to any Hazardous Substances
(collectively "REMEDIAL ACTION"); or (iii) is required to pay all or a portion
of the cost of any Remedial Action, as a potentially responsible party. There
are not now, nor to Debtor's knowledge after reasonable investigation have there
ever been, any Hazardous Substances (or tanks or other facilities for the
storage of Hazardous Substances) stored, deposited, recycled or disposed of on,
under or at any real estate owned or occupied by Debtor during the periods that
Debtor owned or occupied such real estate, which if present on the real estate
or in soils or ground water, could require Remedial Action. To Debtor's
knowledge, there are no proposed or pending changes in Environmental Laws which
would adversely affect Debtor or its business, and there are no conditions
existing currently or likely to exist while the Loan Documents are in effect
which would subject Debtor to Remedial Action or other liability. Debtor
currently complies with and will continue to timely comply with all applicable
Environmental Laws; and will provide Bank, immediately upon receipt, copies of
any correspondence, notice, complaint, order or other document from any source
asserting or alleging any circumstance or condition which requires or may
require a financial contribution by Debtor or Remedial Action or other response
by or on the part of Debtor under Environmental Laws, or which seeks damages or
civil, criminal or punitive penalties from Debtor for an alleged violation of
Environmental Laws.
2.10 INSURANCE. Debtor will maintain insurance to such extent, covering
such risks and with such insurers as is usual and customary for businesses
operating similar properties, and as is satisfactory to Bank, including
insurance for fire and other risks insured against by extended or comprehensive
coverage, public liability insurance and workers' compensation insurance; and
will designate Bank as loss payee with a "Lender's Loss Payable" endorsement on
any casualty policies and take such other action as Bank may reasonably request
to ensure that Bank will receive (subject to no other interests) the insurance
proceeds of the Collateral. Debtor hereby assigns all insurance proceeds to and
irrevocably directs, while any Obligations remain unpaid, any insurer to pay to
Bank the proceeds of all such insurance and any premium refund; and authorizes
Bank to endorse Debtor's name to effect the same, to make, adjust or settle, in
Debtor's name, any claim on any insurance policy relating to the Collateral;
and, at the option of Bank, to apply such proceeds and refunds to the
Obligations or to restoration of the Collateral, returning any excess to Debtor.
In the event of any failure of the Debtor to obtain or maintain any insurance
required hereunder, the Bank shall have the authority, but not the obligation,
to obtain any such insurance coverage, and the Debtor shall immediately
reimburse the Bank for the cost thereof, together with interest on such amount
at the highest rate of interest then accruing on any of the Obligations.
ARTICLE III. RIGHTS AND DUTIES OF BANK
In addition to all other rights (including setoff) and duties of Bank under
the Loan Documents which are expressly incorporated herein as a part of this
Agreement, the following provisions shall also apply:
3.1 AUTHORITY TO PERFORM FOR DEBTOR. Debtor presently appoints any officer
of Bank as Debtor's attorney-in-fact (coupled with an interest and irrevocable
while any Obligations remain unpaid) to do any of the following upon default by
Debtor hereunder (notwithstanding any notice requirements or grace/cure periods
under this or other agreements between Debtor and Bank): (i) to file, endorse or
place the name of Debtor on any invoice or document of title relating to
accounts, drafts against customers, notices to customers, notes, acceptances,
assignments of government contracts, instruments, financing statements, checks,
drafts, money orders, insurance claims or payments or other documents evidencing
payment or a security interest relating to the Collateral; (ii) to receive, open
and dispose of all mail addressed to Debtor and to notify the Post Office
authorities to change the address for delivery of mail addressed to Debtor to an
address designated by Bank; (iii) to do all such other acts and things necessary
to carry out Debtor's duties under this Agreement and the other Loan Documents;
and (iv) to perfect, protect and/or realize upon Bank's interest in the
Collateral. If the Collateral includes funds or property in depository accounts,
Debtor authorizes each of its depository institutions to remit to Bank, without
liability to Debtor, all of Debtor's funds on deposit with such institution upon
written direction by Bank after default by Debtor hereunder. All acts by Bank
are hereby ratified and approved, and Bank shall not be liable for any acts of
commission or omission, nor for any errors of judgment or mistakes of fact or
law.
3.2 VERIFICATION AND NOTIFICATION; BANK'S RIGHTS. Bank may verify
Collateral in any manner, and Debtor shall assist Bank in so doing. Upon the
occurrence of a default hereunder, Bank may at anytime and Debtor shall, upon
request of Bank, notify the account debtors to make payment directly to Bank;
and Bank may enforce collection of, sell, settle, compromise, extend or renew
the indebtedness of such account debtors; all without notice to or the consent
of Debtor. Until account debtors are so notified, Debtor, as agent of Bank,
shall make collections on the Collateral. Bank may at any time notify any bailee
possessing Collateral to turn over the Collateral to Bank.
3.3 COLLATERAL PRESERVATION. Bank shall use reasonable care in the custody
and preservation of any Collateral in its physical possession but in determining
such standard of reasonable care, Debtor expressly acknowledges that Bank has no
duty to: (i) insure the Collateral against hazards; (ii) ensure that the
Collateral will not cause damage to property or injury to third parties; (iii)
protect it from seizure, theft or conversion by third parties, third parties'
claims or acts of God; (iv) give to Debtor any notices received by Bank
regarding the Collateral; (v) perfect or continue perfection of any security
interest in favor of Debtor; (vi) perform any services, complete any
work-in-process or take any other action in connection with the management or
maintenance of the Collateral; or (vii) sue or otherwise effect collection upon
any accounts even if Bank shall have made a demand for payment upon individual
account debtors. Notwithstanding any failure by Bank to use reasonable care in
preserving the Collateral, Debtor agrees that Bank shall not be liable for
consequential or special damages arising therefrom.
3.4 SETOFF. As additional security for the payment of the Obligations,
Debtor hereby grants to Bank a security interest in, a lien on and an express
contractual right to set off against all depository account balances, cash and
any other property of Debtor .now or hereafter in the possession of Bank and the
right to refuse to allow withdrawals from any account (collectively "Setoff").
Bank may, at anytime upon the occurrence of a default hereunder (notwithstanding
any notice requirements or grace/cure periods under this or other agreements
between Debtor or Borrower and Bank), Setoff against the Obligations WHETHER OR
NOT THE OBLIGATIONS (INCLUDING FUTURE INSTALLMENTS) ARE THEN DUE OR HAVE BEEN
ACCELERATED, ALL WITHOUT ANY ADVANCE OR CONTEMPORANEOUS NOTICE OR DEMAND OF ANY
KIND TO DEBTOR, SUCH NOTICE AND DEMAND BEING EXPRESSLY WAIVED.
ARTICLE IV. DEFAULTS AND REMEDIES
4.1 DEFAULTS. Bank may enforce its rights and remedies under this Agreement
upon default. A default shall occur if Debtor fails to comply with the terms of
any Loan Documents (including this Agreement or any guaranty by Debtor), a
demand for payment is made under a demand loan, or any other obligor fails to
comply with the terms of any Loan Documents for which Debtor has given Bank a
guaranty or pledge.
4.2 CUMULATIVE REMEDIES; NOTICE; WAIVER. In addition to the remedies for
default set forth in the Loan Documents, Bank upon default shall have all other
rights and remedies for default provided by the Uniform Commercial Code, as well
as any other applicable law and this Agreement, INCLUDING, WITHOUT LIMITATION,
THE RIGHT TO REPOSSESS, RENDER UNUSABLE AND/OR DISPOSE OF THE COLLATERAL WITHOUT
JUDICIAL PROCESS. The rights and remedies specified herein are cumulative and
are not exclusive of any rights or remedies which Bank would otherwise have.
With respect to such rights and remedies:
(a) ASSEMBLING COLLATERAL; STORAGE; USE OF DEBTOR'S NAME/OTHER PROPERTY.
BANK MAY REQUIRE DEBTOR TO ASSEMBLE THE Collateral and to make it
available to Bank at any convenient place designated by Bank. Debtor
recognizes that Bank will not have an adequate remedy in Law if this
obligation is breached and accordingly, Debtor's obligation to
assemble the Collateral shall be specifically enforceable. Bank shall
have the right to take immediate possession of said Collateral and
Debtor irrevocably authorizes Bank to enter any OF THE premises
wherever said Collateral shall be located, and TO store, repair,
maintain, assemble, manufacture, advertise and sell, lease or dispose
of (by public sale or otherwise) the same on said premises until sold,
all without charge or rent to Bank. Bank is hereby granted an
irrevocable license to use, without charge, Debtor's equipment,
inventory, labels, patents, copyrights, franchises, names, trade
secrets, trade names, trademarks and advertising matter and any
property of a similar nature; and Debtor's rights under all licenses
and franchise agreements shall inure to Bank's benefit. Further,
Debtor releases Bank from obtaining a bond or surety with respect to
any repossession and/or disposition of the Collateral.
(b) NOTICE OF DISPOSITION. Written notice, when required by law, sent to
any address of Debtor in this Agreement, at least five (5) calendar
days (counting the day of sending) before the date of a proposed
disposition of the Collateral is reasonable notice but less notice may
be reasonable under the circumstances. Notification to account debtors
by Bank shall not be deemed a disposition of the Collateral. Notice of
any record shall be deemed delivered when the record has been (a)
deposited in the United States Mail, postage pre-paid, (b) received by
overnight delivery service, (c) received by telex, (d) received by
telecopy, (e) received through the internet, or (f) when personally
delivered.
(c) POSSESSION OF COLLATERAL/COMMERCIAL REASONABLENESS. Bank shall not, at
any time, be obligated to either take or retain possession or control
of the Collateral. With respect to Collateral in the possession or
control of Bank, Debtor and Bank agree that as a standard for
determining commercial reasonableness, Bank need not liquidate,
collect, sell or otherwise dispose of any of the Collateral if Bank
believes, in good faith, that disposition of the Collateral would not
be commercially reasonable, would subject Bank to third-party claims
or liability, that other potential purchasers could be attracted or
that a better price could be obtained if Bank held the Collateral for
up to 2 years. Bank may sell Collateral without giving any warranties
and may specifically disclaim any warranties of title or the like.
Furthermore, Bank may sell the Collateral on credit (and reduce the
Obligations only when payment is received from the buyer), at
wholesale and/or with or without an agent or broker; and Bank need not
complete, process, repair, clean-up or otherwise prepare the
Collateral prior to disposition. If the purchaser fails to pay for the
Collateral, Bank may resell the Collateral and Debtor shall be
credited with the cash proceeds of the sale. Bank may comply with any
applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the
Collateral.
(d) WAIVER BY DEBTOR. Bank has no obligation and Debtor waives any
obligation to attempt to satisfy the Obligations by collecting the
obligations from any third parties and Bank may release, modify or
waive any collateral provided by any third party to secure any of the
Obligations, all without affecting Bank's rights against Debtor.
Debtor further waives any obligation on the part of Bank to marshal
any assets in favor of Debtor or in payment of the Obligations.
Notwithstanding any provisions in this Agreement or any other
agreement between Debtor and Bank, Debtor does not waive any statutory
rights except to the extent that the waiver thereof is permitted by
law.
(e) WAIVER BY BANK. Bank may permit Debtor to attempt to remedy any
default without waiving its rights and remedies hereunder, and Bank
may waive any default without waiving any other subsequent or prior
default by Debtor. Furthermore, delay on the part of Bank in
exercising any right, power or privilege hereunder or at law shall not
operate as a waiver thereof, nor shall any single or partial exercise
of such right, power or privilege preclude other exercise thereof or
the exercise of any other right, power or privilege. No waiver or
suspension shall be deemed to have occurred unless Bank has expressly
agreed in WRITING specifying such waiver or suspension.
ARTICLE V. MISCELLANEOUS
ALL OTHER PROVISIONS IN THE LOAN DOCUMENTS ARE EXPRESSLY INCORPORATED AS A
PAD OF THIS AGREEMENT.
5.1 DEPOSIT WITH BANK. At any time upon default, Bank may require that all
proceeds of Collateral received by Debtor shall be held by Debtor upon an
express trust for Bank, shall not be commingled with any other funds or property
of Debtor and shall be turned over to Bank in precisely the form received (but
endorsed by Debtor, if necessary for collection) not later than the business day
following the day of their receipt. All proceeds of Collateral received by Bank
directly or from Debtor shall be applied against the Obligations in such order
and at such times as Bank shall determine.
5.2 ATTACHMENTS. ALL DOCUMENTS ATTACHED HERETO, INCLUDING ANY APPENDICES,
SCHEDULES, RIDERS, AND EXHIBITS TO THIS AGREEMENT, ARE HEREBY EXPRESSLY
INCORPORATED BY REFERENCE.
IN WITNESS WHEREOF, THE UNDERSIGNED HAS/HAVE EXECUTED THIS BUSINESS
SECURITY AGREEMENT AS OF SEPTEMBER 30, 2004.
(Individual Borrower) OUTDOOR CHANNEL HOLDINGS, INC.
----------------------------------------
Borrower Name (Organization)
a DELAWARE Corporation
Borrower Name N/A By /s/ William A. Owen
Name and Title WILLIAM A. OWEN, CFO
By
Borrower Name N/A Name and Title
INSURANCE COVERAGE FOR THE BENEFIT OF BANK
TO: INSURANCE AGENT OWNER:
OUTDOOR CHANNEL HOLDINGS, INC.
- -------------------------------- ------------------------------------
Policy Number Name
43445 BUSINESS PARK DRIVE, SUITE 113
- -------------------------------- ------------------------------------
Telephone Number Address
TEMECULA, CA 92590
- -------------------------------- ------------------------------------
Insurance Company Name City State Zip Code
- --------------------------------
Insurance Agent's Name
- --------------------------------
Address
- --------------------------------
City State Zip Code
As set forth below, this is a request and authorization that you name "U.S. BANK
N.A." (the "BANK") as "Lenders Loss Payee" and/or "Mortgagee Payee" under our
property coverage from _________________________________________________________
(insert name of insurance company) as follows:
[FILL OUT THE APPROPRIATE SECTIONS]
[X] Lenders Loss Payee on all our tangible personal property in the minimum
amount of $5,000,000.00 and on any Business Interruption Insurance we have
bound.
[ ] Lenders Loss Payee on that equipment described below or on the attached
sheet in the minimum amount of $___________________________________________
___________________________________________________________________________
___________________________________________________________________________
[ ] Lenders Loss Payee on motor vehicles up to their insurable value, as
described below or on the attached sheet.
______________ ______________ ______________ __________________
Year Make Model VIN/Serial Number
______________ ______________ ______________ __________________
Year Make Model VIN/Serial Number
[ ] Mortgagee Payee on real estate at the following locations with coverage in
the amounts specified:
______________________________________________________ $__________________
Address City State Amount of Coverage
______________________________________________________ $__________________
Address City State Amount of Coverage
______________________________________________________ $__________________
Address City State Amount of Coverage
The Bank will require a binder or certificate showing such coverage and listing
the Bank as LENDERS LOSS PAYEE and/or MORTGAGEE PAYEE as stated above, or,
alternatively, please provide the Bank with language from the policy showing its
"Lender Loss Payee" and/or "Mortgagee payee" coverage. Such coverage should
insure that the Bank is paid in the event of loss despite any neglect on our
part, and that the Bank is given prior notice of cancellation.
Lastly, the Bank requires that there be no other loss payee and/or mortgagee
payee on its collateral without its consent. If there presently exists any other
loss payee and/or mortgagee payee on such collateral, please itemize such
parties and their insured collateral on a separate attachment.
Please send the binder/certificate and any U.S. BANK N.A.
applicable loss payee/mortgagee list to: -------------------------------
Attn: Corporate Loan Servicing
Center-Commercial Collateral
#6517384088
P.O. Box 5308
Portland, OR 97228-5308
Please direct any questions regarding this request to _____________. Thank you
for your assistance.
OUTDOOR CHANNEL HOLDINGS, INC.
----------------------------------------
(Owner Name)
By:
------------------------------------
(Owner's Signature_
Name and Title: WILLIAM A. OWEN, CFO
------------------------
(For Company Only)
ADDENDUM TO REVOLVING CREDIT NOTE
This Addendum is made part of the Revolving Credit Note (the "NOTE") by the
undersigned borrower (the "Borrower") in favor of U.S. Bank N. A:(the "Bank") AS
of the date identified below. The warranties, covenants and other terms
described below are hereby added to the Note.
AMENDED AND RESTATED NOTE. This Amended and Restated Note (this "Note") is
issued as an amendment and restatement of, but not in payment of, Borrower's
promissory note dated 09/30/04, payable to the order of the Bank in the original
principal amount of $5,000,000.00, as amended, supplemented, extended or
otherwise modified (the "Original Note"). If the existing principal balance of
the Original Note exceeds the stated principal amount of this Note, then
concurrently with the delivery of this Note, Borrower shall pay to Bank an
amount sufficient to reduce said principal amount to the stated principal amount
of this Note. All interest accrued but unpaid on the Original Note shall be due
and payable in full on the first interest payment date under this Note. All
agreements and documents evidencing, securing, guarantying and otherwise related
to the Original Note or the indebtedness evidenced thereby, whether or not
identified in this Note, continue in full force and effect, except to the extent
that any such agreement or document may have been wholly or partially released
in a writing signed by the Bank. Any and all references to the Original Note in
any agreement or document are hereby amended to refer to this Note. The loan
agreement or credit agreement between Borrower and Bank dated of even date with
the Original Note, relating to the indebtedness evidenced by the Original Note,
as previously amended, supplemented, restated or otherwise modified, is hereby
terminated as of the date of this Note.
Dated as of: 09/30/04
OUTDOOR CHANNEL HOLDINGS, INC.
Borrower Name (Organization)
a(an) DELAWARE CORPORATION
(Individual Borrower)
By /s/ William A. Owen
- ------------------------------- --------------------------------------
Borrower Name Name and Title WILLIAM A. OWEN, CFO
By
- ------------------------------- --------------------------------------
Borrower Name Name and Title
U.S. Bank A.
By
/s/ Maureen K. Sullivan
- -------------------------------
Name and Title MAUREEN K. SULLIVAN,
VICE PRESIDENT
ADDENDUM TO REVOLVING CREDIT AGREEMENT
This Addendum is made part of the Revolving Credit Agreement (the "Agreement")
made and entered into by and between the undersigned borrower (the "Borrower")
and the undersigned bank (the "Bank") as of the date identified below. The
warranties, covenants and other terms described below are hereby added to the
agreement.
Without limitation of any other reporting requirements set forth in this
Agreement or any other Loan Document, Borrower covenants and agrees with Bank
that, while this Agreement is in effect, Borrower shall deliver to Bank the
following:
AGINGS OF ACCOUNTS RECEIVABLE. Borrower shall deliver to Bank within thirty (30)
days after the end of each fiscal quarter, a detailed aging by invoice date of
Borrower's accounts and contracts receivable as of the last day of that fiscal
quarter, together with an explanation of any adjustments made at the end of that
fiscal quarter, all in a form acceptable to Bank.
AGINGS OF ACCOUNTS PAYABLE. Borrower shall deliver to Bank within thirty (30)
days after the end of each fiscal quarter, a detailed aging by invoice date of
Borrower's accounts payable as of the last thy of that fiscal quarter, together
with an explanation of any adjustments made at the end of that flscai quarter,
all in a form acceptable to Bank.
COMPLIANCE CERTIFICATE. Unless waived in writing by Bank, Borrower agrees to
deliver to Bank within sixty (60) days after the end of each fiscal quarter a
certificate executed by Borrower's chief financial officer, or other officer or
person acceptable to Bank, certifying that the representations and warranties
set forth in this Agreement are true and correct as of the date of the
certificate and further certifying that, as of the date of the certificate, no
default exists under this Agreement.
COMPLIANCE CERTIFICATE. Unless waived in writing by Bank, Borrower agrees to
deliver to Bank within ninety (90) days after the end of each fiscal year a
certificate executed by Borrower's chief financial officer, or other officer or
person acceptable to Bank, certifying that the representations and warranties
set forth in this Agreement are true and correct as of the date of the
certificate and further certifying that, as of the date of the certificate, no
default exists under this Agreement.
FIXED CHARGE COVERAGE RATIO. Borrower agrees to maintain,, as of the end of each
fiscal quarter for the four (4) fiscal quarters then ended, a fixed charge
coverage ratio of at least 1.30 To 1.00.
"Fixed Charge Coverage" means, for a. Given fiscal period: (a) EBITDAR (EBITDAR
means net income, plus interest expense, plus income tax expense, plus
depreciation expense plus amortization expense plus rent or lease expense) minus
cash taxes, cash dividends and Maintenance Capital Expenditures divided by (b)
the sum of all required principal payments (on short and long term debt and
capital leases), interest and rental or lease expense.
"Maintenance Capital Expenditures" means the dollar amount of Capital
Expenditures that are necessary to maintain the current level of revenues. For
the purposes of the covenant calculation, at no time shall the amount of the
Capital Expenditures used be less than $687,000.00 Per fiscal year, prorated
evenly for the measurement periods required above.
OTHER TERMS OR CONDITIONS.
1) Minimum quarterly profitability greater than $250,000.00.
2) 10Q filing within sixty (60) days of quarter end.
3) Interest bearing Debt/EBITDA is less than .50.
Dated as of: 09/30/04 OUTDOOR CHANNEL HOLDINGS, INC.
Borrower Name (Organization)
a(an) DELAWARE CORPORATION
(Individual Borrower)
By /s/ William A. Owen
- ------------------------------- -----------------------------------
Borrower Name Name and Title WILLIAM A. OWEN, CFO
By
- ------------------------------- -----------------------------------
Borrower Name Name and Title
U.S. Bank N.A.
By /s/ Maureen K. Sullivan
- ------------------------------
Name and Title MAUREEN K. SULLIVAN
VICE PRESIDENT