CONSENT, WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT
EXECUTION
VERSION
Exhibit 4.56
CONSENT, WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT
THIS CONSENT, WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT (this “First Amendment”)
is entered into as of February 20, 2009, by and among XINHUA SPORTS & ENTERTAINMENT LIMITED
(formerly known as XINHUA FINANCE MEDIA LIMITED), a Cayman Islands limited company (the
“Borrower”), the Subsidiaries of the Borrower signatory hereto (collectively, the
“Guarantors”), the financial institutions and investors signatory hereto (each a
“Lender” and, collectively, the “Lenders”), and PATRIARCH PARTNERS AGENCY SERVICES,
LLC, a Delaware limited liability company (“PPAS”), as agent for the Lenders (in such
capacity, the “Agent”).
RECITALS
A. The Borrower, the Guarantors, the Lenders and the Agent are parties to that certain Credit
Agreement, dated as of October 21, 2008 (as amended by this First Amendment and as may be further
amended, modified, supplemented, restated, renewed, replaced or increased from time to time, the
“Credit Agreement”). Capitalized terms used but not otherwise defined herein shall have
the meanings assigned to such terms in the Credit Agreement.
B. The Borrower and the Guarantors have requested that the Lenders and the Agent (i) consent
to the China Youth League investment, as described on Schedule II attached hereto (the
“China Youth League Investment”), which is prohibited by Section 6.1(e) of the Credit
Agreement, (ii) consent to the acquisition of Everfame Development Limited, a British Virgin
Islands company, and related investments, as described on Schedule III attached hereto (the
“Everfame Acquisition” and, together with the China Youth League Investment, the
“Transactions”), which is prohibited by Sections 5.1(o), 6.1(e) and 6.1(k) of the Credit
Agreement, (iii) increase the Term Loan Commitment, (iv) make certain amendments to the Credit
Agreement as set forth herein and (v) waive certain requirements of the Credit Documents. Subject
to the satisfaction of the conditions of effectiveness set forth in Section 6 of this First
Amendment and the other covenants, conditions and agreements contained herein, the Lenders and the
Agent have agreed to consent to the Transactions and to make such amendments.
NOW, THEREFORE, in consideration of the foregoing and the covenants, conditions and agreements
set forth herein, and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Borrower, the Guarantors, the Lenders and the Agent covenant and agree
as follows:
1. CONSENT AND WAIVER. The Agent and the Lenders hereby (i) consent to each of the
Transactions, (ii) waive Section 6.1(e) of the Credit Agreement to the extent such provision
prohibits the consummation of the China Youth League Investment and waive Sections 5.1(o), 6.1(e)
and 6.1(k) to the extent such provisions prohibit the consummation of the Everfame Acquisition and
(iii) waive the application of Section 5.1(h) of the Credit Agreement, Section 6(a) of the Security
Agreement and Section 20(b) of the Pledge Agreement with respect to the change of the Borrower’s
name to “Xinhua Sports & Entertainment Limited” and hereby
waive any Default or Event of Default that may have arisen as a result of any failure to
comply with the requirements of such sections with respect to such name change, in each case
subject to, and based upon, the following terms and conditions:
(a) the Borrower shall be in pro forma compliance with the financial covenants set
forth in Section 6.2 of the Credit Agreement (as set forth in and as amended by this First
Amendment) before and after giving effect to each of the Transactions;
(b) no Default or Event of Default under any Credit Document (other than such Defaults
or Events of Default as are expressly waived by this First Amendment) shall exist prior to
or immediately after giving effect to the terms of either of the Transactions;
(c) neither of the Transactions shall be reasonably expected to cause a Material
Adverse Effect;
(d) all PRC entities acquired in the Everfame Acquisition shall be directly or
indirectly owned by Upper Step Holdings Limited and shall be subject to an Internal Control
Agreement with such Credit Party or a Subsidiary thereof;
(e) no proceeds of the Term Loans shall be used at any time (including during the term
of the joint venture agreement and all other agreements executed in connection with the
China Youth League Investment) by any Credit Party to pay any consideration, purchase price,
costs, expenses, working capital, contingent payments, incentive payments, revenue sharing
payments, or other payments in connection with the China Youth League Investment or to make
any loans, advances or other fundings to any person or entity in connection with or pursuant
to any document, instrument or agreement executed in connection with the China Youth League
Investment;
(f) the Borrower shall have delivered to the Agent a description of the pro forma cash
flow to the Borrower from each of the Transactions, in each case certified by a director of
the Borrower;
(g) the Borrower shall have delivered to the Agent a copy of the resolutions of the
Board of Directors of the Borrower (or a duly appointed Committee thereof), approving each
of the Transactions, in each case certified by a director of the Borrower;
(h) the Borrower shall have delivered to the Agent an updated Disclosure Schedule to
reflect each of the Transactions;
(i) the Borrower shall have delivered to the Agent complete executed copies of all
documents and agreements relating to the China Youth League Investment, certified by a
director of the Borrower;
(j) no later than two (2) Business Days after the closing of the Everfame Acquisition,
the Borrower shall deliver to the Agent complete executed copies of all documents and
agreements relating to the Everfame Acquisition, certified by a director of
2
the Borrower, substantially in the form provided to counsel for the Agent and the
Lenders on February 17, 2009; and
(k) the Borrower shall have delivered to the Agent certificates signed by an Authorized
Officer of the Borrower, certifying (i) on the First Effective Date (as defined herein) as
to the matters set forth in clauses (a), (b), (c) and (e) above and (ii) on the Second
Effective Date (as defined herein) as to the matters set forth in clauses (a), (b), (c) and
(d) above and certifying as to the Borrower’s compliance with Sections 5.1(m) and 6.1(k) of
the Credit Agreement, and in each case attaching calculations necessary to show compliance
under clause (a) above.
2. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows:
(a) Amendment of Section 1.1 of the Credit Agreement. The following
definitions in Section 1.1 of the Credit Agreement are hereby amended and restated in their
entirety to read as follows:
“Agreement” means this Agreement, as amended by the First Amendment,
and as it may be further amended, modified, restated, extended, increased,
renewed, supplemented and/or replaced from time to time.
“Commitment Period” means the period from the date of this Agreement
to but excluding March 31, 2009.
“Credit Documents” means any of this Agreement (including the
Disclosure Schedule), the First Amendment, the Term Notes (if any), the
Collateral Documents, the Guaranty, the Investor and Registration Rights
Agreement, the Subordination Agreement, and all other agreements,
instruments, certificates and documents previously, now or hereafter
executed and/or delivered to or for the benefit of the Agent or any Lender
from time to time by any Credit Party or any other person or entity in
connection with this Agreement or any other Credit Document, each as
amended, modified, supplemented, restated, extended, increased, renewed
and/or replaced from time to time.
“Disclosure Schedule” means the Credit Parties’ Disclosure Schedule
delivered to the Agent at Closing, as such schedule may be updated, amended,
supplemented, restated or otherwise modified from time to time pursuant to
the terms of this Agreement.
“Interest Expense” shall mean, for any period, as to any Person, as
determined in accordance with GAAP, the total interest expense of such
Person, whether paid or accrued during such period (including the interest
component of Capital Leases for such period, but excluding the amortization
of loan origination or structuring fees), including, without limitation,
discounts in connection with the sale of any accounts and bank fees,
commissions, discounts and other fees and charges owed with respect
3
to letters of credit, banker’s acceptances or similar instruments;
provided, notwithstanding the foregoing, any non-cash imputed
interest expenses relating to long-term contracts shall be excluded from the
total interest expenses.
“Total Debt” means, as to any Person, with respect to any period,
all indebtedness for borrowed money, including the Loans, together with all
accrued interest in respect thereof and all interest paid in respect
thereof; provided, notwithstanding the foregoing, any and all
indebtedness and accrued or paid interest in respect thereof arising from
ordinary course financings to facilitate conversion of Dollars into RMB
required for working capital purposes in the PRC shall be excluded from the
calculation of the total debt.
(b) Addition to Section 1.1 of the Credit Agreement. The following definition
is hereby added in alphabetical order to Section 1.1 of the Credit Agreement:
“First Amendment” means that certain Consent, Waiver and First
Amendment to Credit Agreement, dated as of February 20, 2009, by and among
the Lenders, the Agent, the Borrower and the Guarantors.
(c) Amendment of Section 2.4 of the Credit Agreement. Section 2.4 of the
Credit Agreement is hereby amended and restated in its entirety to read as follows:
Section 2.4 Lenders’ Loan Amounts. All Loans (a) made on the Closing
Date shall be made by the Lenders simultaneously and proportionately to their
respective Pro Rata Shares and (b) made subsequent to the Closing Date shall be made
by each Lender in an amount determined by the Agent in its sole discretion and
within such Lender’s Term Loan Commitment, in each case it being understood that no
Lender shall be responsible for any default by any other Lender in such other
Lender’s obligation to make the Loans hereunder nor shall any Commitment of any
Lender be increased or decreased as a result of a default by any other Lender in
such other Lender’s obligation to make a Loan requested hereunder.
(d) Amendment of Section 2.17 of the Credit Agreement. Section 2.17 of the
Credit Agreement is hereby amended to replace in subsection (a) thereof the term
“$40,000,000” with the term “$22,200,000” and to amend and restate in its entirety
subsection (c)(iii) thereof to read as follows:
(iii) the Borrower shall pay to the Agent a non-refundable commitment increase
fee in an amount equal to (A) the sum of the increase in the Term Loan Commitment as
of the Increase Effective Date, times (B) 2.0%, which fee shall be deemed
fully earned and due and payable on the Increase Effective Date and in addition to
any other fee from time to time payable under the Credit Documents.
(e) Addition to Section 3.2 of the Credit Agreement. The following subsection
(j) is hereby added to Section 3.2 of the Credit Agreement.
4
(j) Certificates and Opinions. The Borrower shall deliver all
certificates, documents, instruments and agreements, including all constitutive
documents, resolutions, director’s certificates, opinions of counsel, and financing
statements, and take all such action, reasonably requested by the Agent in
furtherance of the foregoing.
(f) Amendment of Section 6.2(a) of the Credit Agreement. Section 6.2(a) of the
Credit Agreement is hereby amended and restated in its entirety to read as follows:
(a) Minimum Consolidated EBITDA, Interest Coverage Ratio and Maximum
Leverage Ratio. The Borrower shall not permit (i) Consolidated EBITDA of the
Borrower and its Subsidiaries or the Interest Coverage Ratio for any of the latest
thirteen four-week periods ending on the end of the Fiscal Quarters set forth below
to be less than the amount or ratio set forth opposite such period, and (ii) the
Leverage Ratio for any of the latest thirteen four-week periods ending on the end of
the Fiscal Quarters set forth below to be more than the ratio set forth opposite
such period, in each case for clauses (i) and (ii) above, evidence of which shall be
delivered to the Agent with the applicable Financials and certifications required
under Section 5.1(a):
| Minimum | ||||||||||||
| Consolidated | Minimum Interest | Maximum Leverage | ||||||||||
| Fiscal Quarter Ending | EBITDA | Coverage Ratio | Ratio | |||||||||
4th
Fiscal Quarter
ending in Fiscal
Year 2008 |
$ | 25,480,000.00 | 3.23 : 1 | 5.03 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 20,147,796.11 | 3.40 : 1 | 3.67 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 20,062,644.42 | 2.76 : 1 | 3.68 : 1 | ||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 20,244,241.49 | 2.62 : 1 | 3.65 : 1 | ||||||||
4th Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 20,810,838.57 | 2.54 : 1 | 3.55 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 15,363,810.46 | 1.88 : 1 | 4.81 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 20,488,289.52 | 2.51 : 1 | 3.60 : 1 | ||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 26,267,426.98 | 3.21 : 1 | 2.81 : 1 | ||||||||
4th Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 32,863,769.08 | 4.02 : 1 | 2.25 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 19,305,185.03 | 2.36 : 1 | 3.83 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 28,634,378.47 | 3.50 : 1 | 2.58 : 1 | ||||||||
5
| Minimum | ||||||||||||
| Consolidated | Minimum Interest | Maximum Leverage | ||||||||||
| Fiscal Quarter Ending | EBITDA | Coverage Ratio | Ratio | |||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 38,966,420.22 | 4.76 : 1 | 1.90 : 1 | ||||||||
4th Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 48,764,013.58 | 5.96 : 1 | 1.51 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2012 |
$ | 47,524,013.58 | 5.81 : 1 | 1.55 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2012 |
$ | 47,524,013.58 | 5.81 : 1 | 1.55 : 1 | ||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2012 |
$ | 47,524,013.58 | 5.81 : 1 | 1.55 : 1 | ||||||||
(g) Amendment of Section 6.2(a) of the Credit Agreement. Upon the Second
Effective Date (as defined below), Section 6.2(a) of the Credit Agreement shall be hereby
amended and restated in its entirety to read as follows:
(a) Minimum Consolidated EBITDA, Interest Coverage Ratio and Maximum
Leverage Ratio. The Borrower shall not permit (i) Consolidated EBITDA of the
Borrower and its Subsidiaries or the Interest Coverage Ratio for any of the latest
thirteen four-week periods ending on the end of the Fiscal Quarters set forth below
to be less than the amount or ratio set forth opposite such period, and (ii) the
Leverage Ratio for any of the latest thirteen four-week periods ending on the end of
the Fiscal Quarters set forth below to be more than the ratio set forth opposite
such period, in each case for clauses (i) and (ii) above, evidence of which shall be
delivered to the Agent with the applicable Financials and certifications required
under Section 5.1(a):
| Minimum Consolidated |
Minimum Interest | Maximum Leverage | ||||||||||
| Fiscal Quarter Ending | EBITDA | Coverage Ratio | Ratio | |||||||||
4th
Fiscal Quarter
ending in Fiscal
Year 2008 |
$ | 25,480,000.00 | 3.23 : 1 | 5.03 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 20,447,796.11 | 3.19 : 1 | 4.79 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 20,362,644.42 | 2.48 : 1 | 4.81 : 1 | ||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 20,544,241.49 | 2.24 : 1 | 4.76 : 1 | ||||||||
4th Fiscal Quarter
ending in Fiscal
Year 2009 |
$ | 21,110,838.57 | 2.09 : 1 | 4.64 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 16,803,810.46 | 1.66 : 1 | 5.82 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 21,928,289.52 | 2.17 : 1 | 4.46 : 1 | ||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 27,707,426.98 | 2.74 : 1 | 3.53 : 1 | ||||||||
6
| Minimum Consolidated |
Minimum Interest | Maximum Leverage | ||||||||||
| Fiscal Quarter Ending | EBITDA | Coverage Ratio | Ratio | |||||||||
4th Fiscal Quarter
ending in Fiscal
Year 2010 |
$ | 34,303,769.08 | 3.40 : 1 | 2.85 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 22,625,185.03 | 2.24 : 1 | 4.33 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 31,954,378.47 | 3.16 : 1 | 3.06 : 1 | ||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 42,286,420.22 | 4.19 : 1 | 2.31 : 1 | ||||||||
4th Fiscal Quarter
ending in Fiscal
Year 2011 |
$ | 52,084,013.58 | 5.16 : 1 | 1.88 : 1 | ||||||||
1st Fiscal Quarter
ending in Fiscal
Year 2012 |
$ | 52,084,013.58 | 5.16 : 1 | 1.88 : 1 | ||||||||
2nd Fiscal Quarter
ending in Fiscal
Year 2012 |
$ | 52,084,013.58 | 5.16 : 1 | 1.88 : 1 | ||||||||
3rd Fiscal Quarter
ending in Fiscal
Year 2012 |
$ | 52,084,013.58 | 5.16 : 1 | 1.88 : 1 | ||||||||
(h) Amendment of Schedule I to the Credit Agreement. Schedule I to the Credit
Agreement is hereby deleted and replaced in its entirety by Schedule I attached to
this First Amendment:
3. RELEASE AND WAIVER OF CLAIMS.
(a) In consideration of the consent to and amendment of certain provisions of the
Credit Agreement as provided herein and the other benefits received by each of the Borrower
and the Guarantors hereunder, each of the Borrower and the Guarantors hereby RELEASES,
WAIVES, RELINQUISHES and forever DISCHARGES each of the Lenders and the Agent, as well as
their predecessors, successors, assigns, agents, officers, directors, employees, attorneys,
representatives, affiliates and subsidiaries of and from any and all claims, offsets,
defenses, counterclaims, demands, actions and causes of action of any and every kind or
character, past or present, which any Credit Party may have against any of the Lenders, the
Agent or any of their predecessors, successors, assigns, agents, officers, directors,
employees, attorneys, representatives, affiliates and subsidiaries arising out of or with
respect to any and all transactions relating to the Credit Documents occurring prior to the
date hereof, including any loss, cost or damage, of any kind or character, arising out of or
in any way connected with or in any way resulting from the acts, actions or omissions of any
of the Lenders, the Agent or any of their predecessors, successors, assigns, agents,
officers, directors, employees, attorneys, representatives, affiliates and subsidiaries,
including any breach of fiduciary duty, breach of any duty of fair dealing, breach of
confidence, breach of funding commitment, undue influence, duress, economic coercion,
conflict of interest, negligence, bad faith, malpractice, intentional or negligent
infliction of mental distress, tortious interference with contractual relations, tortious
interference with corporate governance or prospective business advantage, breach of
contract, deceptive trade practices, libel, slander or conspiracy, but in each case only to
the extent permitted by applicable law, such waiver and release being with full knowledge
7
and understanding of the circumstances and effect thereof and after having consulted
legal counsel with respect thereto.
(b) The agreements of each of the Borrower and the Guarantors set forth in this
Section 3 shall survive termination of this First Amendment and the other Credit
Documents.
4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER AND THE GUARANTORS. By its
execution and delivery hereof, each of the Borrower and the Guarantors represents and warrants to
the Lenders and the Agent that, as of each Effective Date:
(a) the representations and warranties of the Borrower and the Guarantors contained in
the Credit Agreement and the other Credit Documents are true and correct on and as of each
Effective Date as if made on and as of such Effective Date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in which case
such representations and warranties shall have been true and accurate on and as of such
earlier date);
(b) no Default or Event of Default will result from or after giving effect to this
First Amendment;
(c) the execution, delivery and performance by each Credit Party of this First
Amendment are within its respective legal power and authority, and have been duly authorized
by all necessary actions of such Credit Party;
(d) this First Amendment has been duly executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms, except as
enforceability thereof may be limited by applicable bankruptcy or other debtor relief laws
and by general principles of equity (regardless of whether enforcement is sought in a
proceeding in equity or at law);
(e) neither its execution, delivery and performance of this First Amendment nor the
consummation of any transactions contemplated herein will violate or conflict with, or
result in a breach of, or constitute a default under, or require any consent under, (i) any
of its organizational or other governance documents, (ii) any Regulation, or (iii) any
agreement or instrument to which it is a party or by which it or any of its property is
bound or subject;
(f) no authorization, approval or consent of, or other action by, notice to, or filing
with, any Governmental Body or other person or entity is required for its execution,
delivery or performance of this First Amendment;
(g) since October 21, 2008, no act, circumstance or event (including, without
limitation, any pending or threatened action before any Governmental Body or arbitrator) has
occurred that has had, or could reasonably be expected to have, either in any case or in the
aggregate, a Material Adverse Effect; and
8
(h) the Credit Parties are not aware of any claim or offset against, or defense or
counterclaim to, any of their obligations or liabilities under the Credit Agreement or any
other Credit Document.
5. REPRESENTATIONS AND WARRANTIES OF THE LENDERS. By its execution and delivery
hereof, each Lender represents and warrants to the Borrower that, (i) as of each Effective Date,
this First Amendment constitutes the legal, valid and binding obligation of such Lender,
enforceable in accordance with its terms, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws relating to the enforcement of creditors’ rights
generally and by general equitable principles, and (ii) the representations and warranties of the
Lenders contained in Section 4.2 of the Credit Agreement are true and correct on and as of each
Effective Date as if made on and as of such Effective Date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and correct on and as of such earlier date).
6. CONDITIONS PRECEDENT TO EFFECTIVENESS.
(a) Sections 2(a), (b), (e) and (f) of this First Amendment shall be effective
as of December 26, 2008 (the “First Effective Date”) only after each of the
following conditions precedent shall have been satisfied in the Lenders’ and the Agent’s
sole discretion:
| (i) | the Agent shall have received counterparts of (i) this First Amendment executed by each Credit Party, (ii) the Borrower Ratification and Acknowledgment executed by the Borrower and (iii) the Guarantor Ratification and Consent executed by each Guarantor; | ||
| (ii) | the Agent shall have received all of the documents required under Sections 1(f), (g), (h), (i) and (k) of this First Amendment with respect to the Chinese Youth League Investment; | ||
| (iii) | as of the First Effective Date, no Default or Event of Default (other than such Defaults or Events of Default as are expressly waived by this First Amendment) under any Credit Document shall have occurred and be continuing or will result from or after giving effect to this First Amendment; | ||
| (iv) | as of the First Effective Date, the representations and warranties set forth in Section 4 of this First Amendment and in the other Credit Documents shall be true and correct; and | ||
| (v) | the Agent shall have received, in form and substance satisfactory to the Agent and its counsel, copies of each instrument, agreement, certificate, opinion or other document required pursuant to Sections 3.2(i), 3.2(j) 5.1(m), 5.1(o) and 6.1(k) of the Credit Agreement and such other documents, opinions, certificates and instruments as the Agent or its counsel shall reasonably request, and the Borrower and the Guarantors |
9
| shall have taken such further actions as the Agent or its counsel may reasonably request in connection herewith or therewith. |
(b) Provided that such date has occurred on or before ▇▇▇▇▇ ▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇
▇(▇), (▇), (▇) and (h) of this First Amendment shall become effective as of the date
(the “Second Effective Date” and each of the First Effective Date and the Second
Effective Date, an “Effective Date”) on which the following conditions precedent
shall have been satisfied in the Lenders’ and the Agent’s sole discretion:
| (i) | the Agent shall have received all of the documents required under Sections 1(f), (g), (h), (j) and (k) of this First Amendment with respect to the Everfame Acquisition; | ||
| (ii) | as of the Second Effective Date, no Default or Event of Default under any Credit Document shall have occurred and be continuing or will result from or after giving effect to this First Amendment; | ||
| (iii) | as of the Second Effective Date, the representations and warranties set forth in Section 4 of this First Amendment and in the other Credit Documents shall be true and correct; | ||
| (iv) | the Borrower shall have executed and delivered to the Agent a Funding Notice in accordance with Section 3.2(a) of the Credit Agreement; | ||
| (v) | the Borrower shall have executed and delivered to each Lender a Term Note in the outstanding principal amount equal to the increase in such Lender’s Term Loan; | ||
| (vi) | the Agent shall have received from the Borrower pursuant to Section 2.7(c) of the Credit Agreement payment of the non-refundable commitment increase fee of $356,000 (i.e., an amount equal to (i) $17,800,000, times (ii) 2.0%), which fee shall be deemed fully earned and due and payable on the Second Effective Date and in addition to any other fee from time to time payable under the Credit Documents; | ||
| (vii) | the Agent shall have received from the Borrower payment for or reimbursement of all fees and expenses (including reasonable attorneys’ fees) incurred by the Agent and the Lenders in connection with the preparation, negotiation, review, execution and delivery of this First Amendment and all other outstanding fees and expenses required to be paid under the Credit Agreement; | ||
| (viii) | the Agent shall have received, in form and substance satisfactory to the Agent and its counsel, copies of each instrument, agreement, certificate, opinion or other document required pursuant to Sections 3.2(i), 3.2(j), 5.1(m), 5.1(o) and 6.1(k) of the Credit Agreement and such other documents, opinions, certificates and instruments as the Agent or its counsel shall reasonably request, and the Borrower and the Guarantors |
10
| shall have taken such further actions as the Agent or its counsel may reasonably request in connection herewith or therewith (including, without limitation, an opinion of Cayman Islands counsel to the Borrower that the change of the Borrower’s name referred to herein has not adversely affected the validity of any charge established under any Credit Document on the Collateral). |
7. FURTHER ASSURANCES. Each of the Borrower and the Guarantors, upon the reasonable
request of the Agent, shall promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Agent may reasonably request for the purposes of
obtaining or preserving the full benefits of this First Amendment. Borrower shall also cause to be
delivered to the Agent and the Lenders by February 28, 2009 the opinion parenthetically referred to
in Section 6(b)(viii) hereof; failure to provide such opinion as required shall be deemed
an Event of Default under the Credit Agreement.
8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties
made in this First Amendment or any other Credit Document, including any Credit Document furnished
in connection with this First Amendment, shall survive the execution and delivery of this First
Amendment and the other Credit Documents, and no investigation by any Lender or the Agent or the
execution of this First Amendment by the Lenders and the Agent shall affect such representations
and warranties or the right of the Lenders and the Agent to rely upon them.
9. SEVERABILITY. Any provision of this First Amendment held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
First Amendment and the effect thereof shall be confined to the provision so held to be invalid or
unenforceable.
10. RATIFICATION; REFERENCE TO CREDIT AGREEMENT. Except as expressly modified and
superseded by this First Amendment, the terms and provisions of the Credit Agreement and the other
Credit Documents are ratified and confirmed and shall continue in full force and effect. Upon the
First Effective Date, each reference in the Credit Agreement to “this Credit Agreement,” “this
Agreement,” “hereunder,” “herein” or words of like import shall mean and be a reference to the
Credit Agreement, as affected and amended by this First Amendment.
11. EXPENSES. As provided in the Credit Agreement, but without limiting any terms or
provisions thereof, the Borrower agrees to pay on demand all costs and expenses incurred by the
Agent and the Lenders in connection with the preparation, negotiation, and execution of this First
Amendment, including without limitation the costs and fees of the Agent’s and the Lenders’ legal
counsel, regardless of whether the Second Effective Date occurs, and all costs and expenses
incurred by the Agent and the Lenders in connection with the enforcement or preservation of any
rights under the Credit Agreement, as amended hereby.
12. COUNTERPARTS; EXECUTION VIA FACSIMILE. This First Amendment may be executed in
one or more counterparts, each of which shall be deemed an original, but all
11
of which together shall constitute one and the same instrument. This First Amendment may be
validly executed and delivered by facsimile or other electronic transmission.
13. GOVERNING LAW; BINDING EFFECT. This First Amendment shall be governed by and
construed in accordance with the laws of the State of New York, without regard to the principles of
conflicts of laws thereof, and shall be binding upon the Borrower, the Lenders, the Agent and each
Guarantor and their respective successors and assigns, except that none of the Borrower or the
Guarantors may assign or transfer any of its rights or obligations hereunder without the prior
written consent of the Lenders and the Agent.
14. HEADINGS. Section headings in this First Amendment are included herein for
convenience of reference only and shall not constitute a part of this First Amendment for any other
purpose.
15. CREDIT DOCUMENT. This First Amendment is a Credit Document and is subject to all
provisions of the Credit Agreement applicable to Credit Documents, all of which are incorporated in
this First Amendment by reference the same as if set forth in this First Amendment verbatim.
16. NO ORAL AGREEMENTS. THIS FIRST AMENDMENT IS SPECIFICALLY LIMITED TO THE MATTERS
SET FORTH HEREIN. THIS FIRST AMENDMENT AND THE OTHER CREDIT DOCUMENTS REPRESENT THE FINAL
AGREEMENT BETWEEN AND AMONG THE CREDIT PARTIES, THE LENDERS AND THE AGENT AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR AMONG THE CREDIT PARTIES, THE LENDERS AND THE
AGENT.
17. WAIVER OF JURY. THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT THEY MAY HAVE TO TRIAL BY JURY OF
ANY CLAIM OR CAUSE OF ACTION, OR IN ANY LEGAL PROCEEDING, DIRECTLY OR INDIRECTLY BASED UPON OR
ARISING OUT OF THIS FIRST AMENDMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS FIRST AMENDMENT
(WHETHER BASED ON CONTRACT, TORT, OR ANY OTHER THEORY). EACH PARTY (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT, OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTIES WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND
(B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HAVE BEEN INDUCED TO ENTER INTO THIS FIRST AMENDMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
[SIGNATURE PAGES IMMEDIATELY FOLLOW THIS PAGE]
12
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed
and delivered by their respective officers thereunto duly authorized as of the date first written
above.
| BORROWER: | XINHUA SPORTS & ENTERTAINMENT LIMITED |
|||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Chief Financial Officer | |||
S-1
| GUARANTORS: | UPPER STEP HOLDINGS LIMITED |
|||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
| CHINA LEAD PROFITS LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
| STAREASE LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
| CHINA MEDIA NETWORK LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
S-2
| AGENT: | PATRIARCH PARTNERS AGENCY SERVICES, LLC, as Agent |
|||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: | ▇▇▇▇ ▇▇▇▇▇▇ | |||
| Title: | Manager | |||
S-3
LENDERS:
|
ZOHAR CDO 2003-1, LIMITED | |||
| By: | Patriarch Partners VIII, LLC, its Collateral Manager |
|||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇ ▇▇▇▇▇▇ Title: Manager |
||||
| ▇▇▇▇▇ ▇▇ 2005-1, LIMITED | ||||
| By: | Patriarch Partners XVI, LLC, its Collateral Manager |
|||
| By: | /s/ ▇▇▇▇ ▇▇▇▇▇▇ | |||
| Name: ▇▇▇▇ ▇▇▇▇▇▇ Title: Manager |
||||
S-4
BORROWER RATIFICATION AND ACKNOWLEDGMENT
As of the First Effective Date and upon and immediately after execution of this First
Amendment, the undersigned hereby (a) ratifies and confirms its obligations under the Credit
Documents, (b) acknowledges and agrees that each of the Credit Documents to which it is a party is
and shall remain in full force and effect and is and shall continue to be its legal, valid and
binding obligation, enforceable against it in accordance with its terms, and (c) ratifies and
confirms that the liens and security interests in the Collateral created in favor of the Agent
pursuant to the Credit Agreement and the other Credit Documents are and shall remain in existence,
validly perfected and with the priority as required by the terms of the Credit Agreement and the
other Credit Documents.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS THIS PAGE]
| XINHUA SPORTS & ENTERTAINMENT LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Chief Financial Officer | |||
Borrower Ratification Signature Page
GUARANTOR RATIFICATION AND CONSENT
As of the First Effective Date and upon and immediately after execution of this First
Amendment by the Borrower and the Guarantors, each of the undersigned hereby (a) consents and
agrees to this First Amendment’s execution and delivery by the Borrower, (b) ratifies and confirms
its obligations under each of the Credit Documents to which it is party, including, without
limitation, that certain Guaranty, dated as of October 21, 2008, executed by each of the
undersigned in favor of the Lenders and the Agent (as amended, modified, restated, replaced or
supplemented from time to time, the “Guaranty”), (c) acknowledges and agrees that its
obligations under the Guaranty and the other Credit Documents to which it is party are not
released, diminished, impaired, reduced or otherwise adversely affected by this First Amendment,
and further that the Guaranty and the other Credit Documents to which it is party are and shall
remain in full force and effect and are and shall continue to be its legal, valid and binding
obligations (including its obligations under the Guaranty regarding the Guaranteed Obligations (as
defined in the Guaranty)), enforceable in accordance with their respective terms, (d) acknowledges
and agrees that it has no claims or offsets against, or defenses or counterclaims to, the Guaranty,
and (e) ratifies and confirms that the liens and security interests in the Collateral created in
favor of the Agent pursuant to the Credit Agreement and the other Credit Documents are and shall
remain in existence, validly perfected and with the priority required by the terms of the Credit
Agreement and the other Credit Documents.
[SIGNATURE PAGE IMMEDIATELY FOLLOWS THIS PAGE]
| UPPER STEP HOLDINGS LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
| CHINA LEAD PROFITS LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
| STAREASE LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
| CHINA MEDIA NETWORK LIMITED |
||||
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Name: | ▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: | Authorized Signatory | |||
Guarantor Ratification and Consent Signature Page
SCHEDULE I
| Lender | Term Loan Commitment | |||
ZOHAR CDO 2003-1, LIMITED |
$ | 31,000,000.00 | ||
▇▇▇▇▇ ▇▇ 2005-1, LIMITED |
$ | 26,800,000.00 | ||
Total |
$ | 57,800,000.00 | ||
SCHEDULE I
SCHEDULE II
DESCRIPTION OF CHINA YOUTH LEAGUE INVESTMENT
| Project | Description | Sources of Funds | ||
China Youth League Investment
|
Pursuant to a joint venture agreement (the “JV Agreement”), dated as of December 26, 2008 by and among the Borrower, China Youth Interactive Media (Beijing) Company Limited (“Interactive”), Youth Media (Hong Kong) Limited (“YMHK”) and Youth Media (Beijing) Limited (“YMBJ”), the Borrower, Interactive and YMBJ established a contractual joint venture. Pursuant to the JV Agreement, the Borrower will provide working capital to YMHK and has become the exclusive advertising and sales agent of the joint venture partners across a campus network for video distribution built on the existing broadband Internet infrastructure connecting colleges and universities throughout China. A copy of the JV Agreement has been provided to the Lenders. The JV Agreement was related to a Master Agreement in respect of certain advertising business, dated as of September 30, 2008, between Xinhua Finance Media Limited and ▇▇▇▇▇ ▇▇▇▇▇ Co., Ltd., which Master Agreement has also been provided to the lenders. | The Borrower’s working capital |
SCHEDULE II
SCHEDULE III
DESCRIPTION OF EVERFAME ACQUISITION
| Media Companies |
||||||||||
| Project | Involved | Funds Amount | Uses | Description | Collateral | |||||
Shanxi TV Project
|
Offshore Entities: • Upper Step Holdings
Limited • Everfame
Development Limited • Hong Kong Stock
Express Publication Limited Onshore Entities: • Beijing Hanhua
Zhiyuan Culture Media Co., Ltd. • Beijing Pioneer
Media Advertising
Co., Ltd.
|
US$23,930,000, including (i) US$23,920,000 from borrowing proceeds and (ii) US$10,000 consideration paid to acquire the shares of Everfame Development Limited funded by the Borrower | • approximately
US$18,200,000 for
the Shanxi TV
contract
acquisition, of
which $8,000,000
will be used by the
vendors for Shanxi
TV asset upgrade; • approximately
US$4,400,000 for TV
content contract
investment; • approximately
US$1,330,000 will
be used to purchase
a 51% interest in a
joint venture for
content development
|
Pursuant to a purchase agreement to be entered into by and among the Borrower, Parkwood Asia Limited and Everfame Development Limited in respect of shares in the capital of Everfame Development Limited and other assets set out therein, a draft of which purchase agreement has been provided to the Lenders, and relating agreements, including a cooperation agreement with Shanxi Television Station | • 100% equity
interests in Upper
Step Holdings
Limited and all of
its assets • 100% equity
interests in
Everfame
Development Limited
and all of its
assets • 100% equity
interests in Hong
Kong Stock Express
Publication Limited
and all of its
assets |
SCHEDULE III