PROCEEDS OF THE LOANS ONLY FOR THE
PURPOSES DESCRIBED IN SECTION 4.16.
6.14.
POST-CLOSING OBLIGATIONS.
WITHIN 30 BUSINESS DAYS FOLLOWING THE
CLOSING DATE, DELIVER OR CAUSE TO BE DELIVERED (A) A CERTIFIED EXTRACT OF
MEMBERS FOR EACH OF BRILLIANT 19 LIMITED, DELIRIOUS RECORDINGS LIMITED, SHY
RECORDS LIMITED AND 19 INTERNATIONAL SPORTS MANAGEMENT LIMITED, (B) SHARE
CERTIFICATES REPRESENTING ALL OF THE ISSUED AND OUTSTANDING SHARE CAPITAL OF 19
ARTIST TOURS LIMITED AND DOUBLE VISION FILM LIMITED AND (C) ACCOUNT CONTROL
AGREEMENTS, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ADMINISTRATIVE
AGENT, DULY EXECUTED AND DELIVERED BY JPMORGAN CHASE BANK FOR EACH OF THE
FOLLOWING ENTITIES AND ACCOUNTS: (I) 19 ENTERTAINMENT, INC. (ACCT # 904-886980),
(II) ON THE ROAD PRODUCTIONS (ACCT # 904-944743), (III) ALL GIRL PRODUCTIONS
(ACCT # 904-017184), (IV) 19 TOURING LLC (ACCT # 904-886832), (V) DANCE NATION
PRODUCTIONS (ACCT # 904-068072), (VI) SOUTHSIDE PRODUCTIONS (ACCT # 904-043657),
(VII) 19 RECORDING SERVICES, INC. (ACCT # 904-029069), (VIII) 19 RECORDINGS,
INC. (ACCT # 904-117812) AND (IX) J2K PRODUCTIONS, INC. (ACCT # 904-017192).
IN
SATISFACTION OF ITS OBLIGATIONS UNDER CLAUSE (C) ABOVE, THE BORROWER SHALL BE
PERMITTED TO CAUSE ANY OR ALL OF THE ACCOUNTS SPECIFIED IN CLAUSE (C) TO BE
CLOSED AND THE FUNDS DEPOSITED THEREIN TO BE TRANSFERRED TO ANOTHER ACCOUNT THAT
IS SUBJECT TO AN ACCOUNT CONTROL AGREEMENT IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE ADMINISTRATIVE AGENT.
6.15.
UK FINANCIAL ASSISTANCE.
THE BORROWER WILL ENSURE THAT ALL
PAYMENTS AMONG THE BORROWER AND ANY OF ITS APPLICABLE SUBSIDIARIES (OR ANY OF
THEM) HAVE BEEN AND WILL BE MADE IN COMPLIANCE WITH APPLICABLE LOCAL LAWS OR
REGULATIONS CONCERNING FINANCIAL ASSISTANCE BY A COMPANY FOR THE ACQUISITION OF
OR SUBSCRIPTION FOR ITS OWN SHARES OR CONCERNING THE PROTECTION OF SHAREHOLDERS'
CAPITAL.
63
SECTION 7.
NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in effect,
any Letter of Credit remains outstanding or any Loan or other amount is owing to
any Lender or Agent hereunder, the Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly:
7.1.
FINANCIAL CONDITION COVENANTS.
(A)
CONSOLIDATED LEVERAGE RATIO.
PERMIT
THE CONSOLIDATED LEVERAGE RATIO FOR ANY PERIOD OF FOUR CONSECUTIVE FISCAL
QUARTERS OF THE BORROWER TO EXCEED THE RATIO OF 4.5:1.0.
(B)
CONSOLIDATED INTEREST COVERAGE RATIO.
PERMIT THE CONSOLIDATED INTEREST
COVERAGE RATIO FOR ANY PERIOD OF FOUR CONSECUTIVE FISCAL QUARTERS OF THE
BORROWER ENDING WITH ANY FISCAL QUARTER SET FORTH BELOW TO BE LESS THAN THE
RATIO SET FORTH BELOW OPPOSITE SUCH FISCAL QUARTER:
Fiscal Quarter
Consolidated Interest
Coverage Ratio
Closing Date through Fiscal Quarter ending
9/30/2007
2.0:1.0
Fiscal Quarter ending 12/31/2007 through
Fiscal Quarter ending 6/30/2009
2.5:1.0
Fiscal Quarter ending 9/30/2009 and thereafter
3.0:1.0
7.2.
INDEBTEDNESS.
CREATE, ISSUE, INCUR, ASSUME, BECOME LIABLE IN RESPECT OF
OR SUFFER TO EXIST ANY INDEBTEDNESS, EXCEPT:
(A)
INDEBTEDNESS OF ANY LOAN PARTY PURSUANT TO ANY LOAN DOCUMENT;
(B)
UNSECURED INDEBTEDNESS (I) OF THE BORROWER TO ANY SUBSIDIARY GUARANTOR
(PROVIDED THAT SUCH INDEBTEDNESS IS SUBORDINATED TO THE PAYMENT OF THE