Document:

RESOLUTIONS BY THE UNANIMOUS WRITTEN CONSENT OF THE BOARD OF DIRECTORS

OFVARI-LITE INTERNATIONAL, INC

Exhibit 10.70

DATED             2002

 

 

VARI-LITE

EUROPE LIMITED

 

 

-and-

 

 

BARCLAYS BANK PLC

 

 

 

CHARGE

ON

HIRE

AGREEMENTS

 

 

 

 

THIS

DEED is

made as follows:-

 

	

  Date

  	

   

  	

  1.1

  	

  The date of this deed is                                                    2002

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Parties

  	

   

  	

  1.2

  	

  The parties are:-

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Company

  	

   

  	

   

  	

  “the Company”: VARI-LITE EUROPE LIMITED (Co No 2876045)

  of 20-22 Fairway Drive, Greenford, Middlesex UB6 8PW;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Lender

  	

   

  	

   

  	

  “the Lender”: BARCLAYS BANK PLC of 54 Lombard Street,

  London EC3P 3AH (which expression shall include the Lender’s successors and

  assigns and whose address for all correspondence in connection with this

  mortgage is)

  BARCLAYS MERCANTILE BUSINESS FINANCE LIMITED of Churchill Plaza, Churchill

  Way, Basingstoke, Hampshire RG21 7GP);

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Interpretation

  	

   

  	

  1.4

  	

  In this deed references to statutory provisions include

  references to those provisions as amended or re-enacted and the following

  expressions have the meaning respectively stated against them:-

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Definitions

  	

   

  	

   

  	

  “Principal Agreement”:

  	

  any chattel mortgage now or hereafter granted by the

  Company to the Lender or any company acting as agent for the Lender;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  “Equipment”:

  	

  items mortgaged by the Company to the Lender under a

  Principal Agreement;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  “Agreement”:

  	

  an agreement under which the Company lets Equipment to a

  customer; and

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  “the Property Charged”:

  	

  the Agreements together with the other property referred

  to in clauses 2 below.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Construction

  	

   

  	

  1.5

  	

  The marginal notes are for ease of reference only and do

  not affect the interpretation of this deed. 

  The benefit of this deed and the security created 

  
						

 

2

 

	

   

  	

   

  	

   

  	

  hereby shall enure for the benefit of the Lender’s

  successors and assigns and any company for which the Lender may be acting as

  agent.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Charge 

  	

   

  	

  2.

  	

  The

  Company charges with full title guarantee in favour of the Lender as a first

  fixed and specific charge of all its rights, title and interest in the

  Agreements together with the benefit of all guarantees, indemnities,

  negotiable instruments, securities and insurance policies taken by the

  Company in respect of such Sub-Agreements and together with the benefit of

  any supplemental or collateral agreement entered into by the Company under

  which the Company undertakes to maintain or service Equipment.

  
	

   

  	

   

  	

   

  	

   

  
	

  Discharge of this Security

  	

   

  	

  3.

  	

  When:-

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

  (a)

  	

  all sums payable by the

  Company, and  

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

  (b)

  	

  all liabilities (whether

  actual or contingent) of the Company

  	 

	

   

  	

   

  	

   

  	

   

  	

   

  	 

	

   

  	

   

  	

   

  	

  to

  the Lender under the Principal Agreements shall have been respectively paid

  and discharged, the Lender will at any time thereafter at the request and

  cost of the Company release the Property Charged to the Company.

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

  Covenants by the Company 

  	

   

  	

  4.

  	

  The

  Company covenants with the Lender during the continuance of this security.

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

  Payments to Lender

  	

   

  	

  4.1

  	

  To

  procure that all monies arising under or in respect of the Property Charged

  are paid by the payer to the Lender (as mortgagee) or as the Lender shall

  from time to time direct.

  	 

	

   

  	

   

  	

   

  	

   

  	 

	

  Payments to Company

  	

   

  	

  4.2

  	

  Without

  prejudice to the Company’s obligation under 4.1 above, so far as any monies

  referred to in that clause are received by the Company by accident or mistake

  or for any reason whatsoever forthwith to pay such monies to the Lender (as

  mortgagee) or deal with the same in like manner as the Lender shall have

  directed under clause 4.1 above, and in the meantime to hold the monies in

  trust for the Lender.

  	 

							

 

3

 

	

  Not to Encumber

  	

   

  	

  4.3

  	

  Not

  to create any further mortgage or charge whatsoever on the Property Charged

  or to sell the Property Charged or to deal with any moneys payable under or

  in respect of the Property Charged otherwise than in accordance with the

  terms of this deed.

  
	

   

  	

   

  	

   

  	

   

  
	

  Power of Sale

  	

   

  	

  5.1

  	

  The

  powers of sale and of appointment of a receiver and other powers conferred by

  the Law of Property Act 1925 on mortgagees and by this deed on the Lender

  shall arise and be exercisable at any time after the occurrence of a Default

  Event as defined in the Principal Agreements which is continuing unwaived or

  unremedied.  Section 103 of the Law of

  Property Act 1925 shall not apply to this security or any sale made by virtue

  hereof.

  
	

   

  	

   

  	

   

  	

   

  
	

  Lender to be Entitled to

  Exercise Powers of Receiver 

  	

   

  	

  5.2

  	

  At

  any time after the statutory power of sale shall have become exercisable

  under clause 5.1 above, the Lender may by itself or its servants or agents

  (without appointing a receiver) exercise all or any part of the powers

  conferred on a receiver hereunder and so that the Lender shall not thereby

  become liable to account as mortgagee in possession.

  
	

   

  	

   

  	

   

  	

   

  
	

  Powers of Receiver

  	

   

  	

  5.3

  	

  Any

  receiver appointed by the Lender hereunder shall be deemed to be the agent of

  the Company and not of the Lender. 

  The receiver shall have, inter alia, power to collect and pay

  to the Lender all sums due from any one or more of the following:-

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (a)

  	

  any

  hirer under any of the agreements comprised in the Property Charged;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (b)

  	

  any

  guarantor or indemnifier under any contract of guarantee or indemnity given

  in connection with any of the Property Charged; and

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (c)

  	

  any

  insurer in respect of the Equipment; and

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  inter alia, further power to do any one or more of the

  following: -

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  i)

  	

  enforce

  by legal proceedings or other lawful act or procedure the duties and

  obligations 

  

 

4

 

	

   

  	

   

  	

   

  	

   

  	

  imposed

  upon the parties to any agreement comprised in the Property Charged;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  ii)

  	

  give

  all such notices as he may consider expedient by reason of the acts and

  omissions of any of the parties to any agreement comprised in the Property

  Charged and to receive notices thereunder;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  iii)

  	

  sell

  or concur in selling any of the Property Charged on such terms and conditions

  as he shall think fit and to carry any such sale into effect in the name and

  on behalf of the company;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  iv)

  	

  make

  any arrangement or comprise or settlement which he or the Company shall think

  fit;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  v)

  	

  appoint

  managers, officers and agents for any of the aforesaid purposes at such

  salaries as he may determine and to dismiss them;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  vi)

  	

  do

  all such other acts and things as he may consider incidental or conducive to

  any of the matters or powers aforesaid and to make any arrangements with

  regard to the Property Charged which he considers expedient in the interests

  of the Company;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  vii)

  	

  have

  access to and make use of the premises plant equipment and accounting and

  other records of the Company and the services of its staff for all or any of

  the purpose aforesaid.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Further powers of Indulgence

  by Lender

  	

   

  	

  5.4

  	

  The

  Lender may at any time from time to time without discharging or in any way

  affecting the security hereby created or the rights of the Lender against the

  Company hereunder grant time or any other indulgence to the Company or any

  person referred to in clause 5.3 above.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Further Assurances

  	

   

  	

  6.1

  	

  The

  Company covenants with the Lender that the Company shall at any time and from

  time to time, if and when required by the Lender so to do, execute to the

  Lender or as the Lender shall direct, such further deeds and documents as the

  Lender shall 

  

 

5

 

	

   

  	

   

  	

   

  	

   

  	

  require

  of and on all the Company’s rights title and interest in the Property Charged

  to secure all money and liabilities hereby agreed to be paid or intended to

  be hereby secured, such deeds and documents to be prepared by or on behalf of

  the Lender at the cost of the Company and to be in such form as the Lender

  may require.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Lender to be Attorney of

  Company

  	

   

  	

  6.2

  	

  The

  Company hereby irrevocably appoints the Lender and the persons deriving title

  under the Lender and its substitutes and any receiver, or either or both of

  them, to be the attorney for the Company and in the Company’s name and on its

  behalf and as its act and deed or otherwise to sign seal and deliver and

  otherwise perfect any such deed and document specified in clause 6.1 above or

  (without executing any such deed or document) any deed, assurance or act

  which may be required or may be deemed proper on any sale, lease, sub-lease

  or disposition by the Lender or by any receiver as aforesaid of the Property

  Charged under any power of sale, leasing or other disposition applicable

  thereto.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Protection of Other

  Securities of the Lender

  	

   

  	

  6.3

  	

  Nothing

  herein contained shall operate so as to merge or otherwise prejudice or

  affect any bill, note, agreement, guarantee, mortgage or other security which

  the Lender may from time to time have for any money intended to be hereby

  secured (whether from the Company or any other person) or any right or remedy

  of the Lender thereunder.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Certificate of Officer of

  Lender as Evidence

  	

   

  	

  7.

  	

  A

  certificate by the Secretary or other officer of the Lender as to the money

  and liabilities for the time being due or incurred to the Lender from or by

  the Company shall be conclusive evidence against the Company in any legal

  proceedings.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Continuing Security

  	

   

  	

  8.

  	

  This

  deed shall constitute and be a continuing security to the Lender

  notwithstanding any settlement of account or other matter or thing

  whatsoever.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Consolidation Not Allowed

  	

   

  	

  9.

  	

  Section

  93 of the Law of Property Act 1925 (which restricts the consolidation of

  mortgages) shall not apply to this deed.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Notices

  	

   

  	

  10.

  	

  Any

  notice served under this deed shall be 

  

 

6

 

	

   

  	

   

  	

   

  	

  sufficiently

  served if sent by pre-paid letter post to the respective addresses above (or

  such changed address as one party may notify to the other) and proof of

  dispatch shall be conclusive evidence of receipt by the addressee in due

  course of transmission.

  

 

IN

WITNESS of which this deed was executed and is delivered on and takes effect

from the day and year first before written

 

	

  THE COMMON

  SEAL OF the

  Company was affixed to this

  deed in the presence of:-

  (or where no seal is to be affixed)

  EXECUTED as a Deed by the

  Company acting by: -

  	

  )

  	

   

  
	

  )

  	

   

  
	

  )

  	

   

  
	

  )

  	

   

  
	

  )

  	

   

  
	

  )

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Director

  	

  /s/ H.R. Brutsche ́ III

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Secretary

  	

  /s/ Sarah Blair

  
				

 

7

 

MORTGAGE

(Fixed)

 

	

  Parties

  	

   

  	

  This mortgage is made

  between the Borrower named below and Barclays

  Bank PLC (Company Number 1026167) (“the Lender” which expression

  shall include the Lender’s successors and assigns) of 54 Lombard Street,

  London EC3P 3AH and whose address for all correspondence in connection with

  this mortgage is Barclays Mercantile

  Business Finance Limited of Churchill Plaza, Churchill Way,

  Basingstoke, Hampshire RG21 7GP.

  
	

   

  	

   

  	

   

  
	

  Date and

  Definitions

  	

   

  	

  1.1  The date of this mortgage is

                                                        2002

  
	

   

  	

   

  	

  In this mortgage the

  following expressions have the meanings respectively set out against them:-

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Borrower”;

  	

  Vari-Lite

  Europe Limited of

  20-22 Fairway Drive, Greenford, Middlesex, UB6 8PW (registered England No.

  2876045);

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Goods”;

  	

  the

  goods, particulars of which are set out in the Schedule to this mortgage

  together with all component parts, accessories, improvements and renewals and

  all books, manuals, handbooks, technical data, drawings, schedules and other

  documentation and any amendments to them belonging to the Goods;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Loan”;

  	

  £400,000 or the balance for the time being outstanding;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Instalment

  Dates”;

  	

  the        day of

  each month in each year in which the Loan is outstanding the first Instalment

  Date

  being                                                      2000;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Instalments”;

  	

  60 monthly payments of £8,066.29 payable on the

  Instalment Dates;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Base Rate”;

  	

  Finance House Base Rate as from time to time published in

  the Financial Times or other newspaper or, in default of such publication

  whilst any sum is outstanding under this mortgage, such alternative

  equivalent base rate as shall be agreed between the parties or, in default of

  agreement, settled by the President for the time being of the Institute of

  Chartered

  

 

8

 

	

   

  	

   

  	

   

  	

  Accountants in England and Wales or his nominee acting as an expert;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Termination

  Sum”;

  	

  the

  balance of unpaid Instalments less a rebate of interest calculated by the

  Lender for early repayment;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Insurances”;

  	

  all

  policies and contracts of insurance taken out or to be taken out in respect

  of the Goods, including all claims and benefits arising under them and

  returns of premium;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Security

  Interest”;

  	

  any

  mortgage, charge, pledge, lien or other encumbrance;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Total

  Loss”;

  	

  actual

  or constructive total loss or as compromised or agreed or arranged with the

  insurers of the Goods;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Default

  Events”;

  	

  any

  of the events stated in clause 9 below;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  “Working

  Day”;

  	

  any

  day, except Saturdays, on which the clearing banks in the City of London are

  (or would be but for strike, lockout or other stoppage, affecting particular

  banks or banks generally) open during banking hours.

  
	

   

  	

   

  	

   

  	

   

  
	

  Interpretation

  	

   

  	

  1.2        In this mortgage the masculine includes the feminine and

  the neuter, and the singular includes the plural.  If the Borrower is two or more persons, that expression

  includes all such persons (and each of them) and their liability under this

  mortgage is joint and several.  The

  rights and obligations of the Borrower hereunder are personal to the Borrower

  and shall not be capable of being assigned or transferred.

  
	

   

  	

   

  	

   

  	

   

  
	

  Construction

  	

   

  	

  1.3        The marginal notes are for ease of reference only and do

  not affect the construction of this mortgage.  Any reference in this deed to a statutory provision shall be

  construed as a reference to that provision as from time to time amended or

  re-enacted.  The benefit of this deed

  and the security created hereby shall enure for the benefit of the Lender’s

  successors and assigns and any company for which the Lender may be acting as

  agent.

  
	

   

  	

   

  	

   

  	

   

  
	

  Instalments

  	

   

  	

  2.1        The Borrower shall pay to the Lender on the Instalment

  Dates the Instalments which comprise repayments of principal and payments of

  interest.

  
	

   

  	

   

  	

   

  	

   

  
	

  Interest

  	

   

  	

  2.2        If the Borrower does not make payment of any Instalment on

  the relevant Instalment Date or any other sum payable under this mortgage

  within 10 days of the Lender’s demand, the Borrower shall pay interest to the

  Lender if demanded by the 

  
					

 

9

 

	

   

  	

   

  	

  Lender at the rate of

  Finance House Base Rate plus 5% per annum calculated on a day to day basis

  from the due date to the date of receipt by the Lender both before and after

  judgement.

  
	

   

  	

   

  	

   

  
	

  Early

  Settlement

  	

   

  	

  2.3        As an alternative to payment of Instalments the Lender will

  accept the Termination Sum in full settlement of the Loan with interest.

  
	

   

  	

   

  	

   

  
	

  Non-Working

  Day

  	

   

  	

  2.4        Any amount payable to the Lender on a day which is not a

  Working Day will be payable on the preceding Working Day.

  
	

   

  	

   

  	

   

  	

   

  
	

  Sums

  Secured

  	

   

  	

  3.          This Mortgage secures to the Lender repayment of the

  Loan, the payment of interest on the Loan and the payment from time to time

  of all other sums due from the Borrower to the Lender on any account

  whatsoever.  If a Default Event occurs

  all amounts secured by this mortgage shall become immediately due and

  payable.  The Borrower covenants to

  pay all such monies to the Lender.

  
	

   

  	

   

  	

   

  	

   

  
	

  Costs

  	

   

  	

  4.          Any legal or other costs, charges or expenses payable by

  the Borrower to the Lender under the provisions of this mortgage are payable

  by the Borrower to the Lender with value added tax thereon (if any).  Legal Costs are payable on a full

  indemnity basis as between solicitor and own client.

  
	

   

  	

   

  	

   

  	

   

  
	

  Warranties

  by Borrower

  	

   

  	

  5.          The Borrower warrants to the Lender that the Borrower:-

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (i)

  	

  lawfully owns and is in

  possession of the Goods and that it and the Insurances are free of any

  Security Interest (other than any Security Interest created or subsisting

  with the written consent of the Lender);

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (ii)

  	

  is not subject to any

  prohibition or restriction of its right or ability to enter into this

  mortgage;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iii)

  	

  has power by its

  memorandum of association and has taken all corporate action necessary to

  enter into this mortgage;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iv)

  	

  has not suffered or there

  have not occurred any Default Events which are unremedied.

  
	

   

  	

   

  	

   

  	

   

  
	

  Mortgage

  	

   

  	

  6.          The Borrower hereby mortgages and charges with full title

  guarantee to the Lender all its right, title and interest in the Goods as

  security for all sums payable by the Borrower to the Lender, as referred to

  in clause 1 above.

  
	

   

  	

   

  	

   

  
	

  Undertakings

  by Borrower

  	

   

  	

  7.          The Borrower:-

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (i)

  	

  shall at its own expense

  keep the Goods in good working order and condition;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (ii)

  	

  shall not use or permit

  the Goods to be used in 

  
					

 

10

 

	

   

  	

   

  	

   

  	

  contravention of any

  statute or regulation or for any purpose for which they are not designed or

  reasonably suitable and shall take all reasonable steps to ensure that the

  use and operation of the Goods is by skilled personnel and is without risks

  to health and safety;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iii)

  	

  shall not (except with the

  consent of the Lender) sell, transfer, demise, let on hire or otherwise part

  with possession of the Goods or create or allow to arise any Security

  Interest in the Goods;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iv)

  	

  shall maintain all

  records, logs and other records required by the manufacturers of the Goods;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (v)

  	

  shall replace any

  component, part or item of the Goods where necessary provided that such

  replacement is of at least equivalent value and condition when compared to

  the original;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (vi)

  	

  shall cause any

  alterations to the Goods that are from time to time required by law to be

  made at the Borrower’s expense, but shall not otherwise alter the Goods

  otherwise than by way of improvement;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (vii)

  	

  shall notify the Lender

  within 24 hours following:-

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (a)

  	

  demand of the whereabouts

  of the Goods;  

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (b)

  	

  any occurrence as a result

  of which the Goods are or are likely become a Total Loss;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (c)

  	

  the occurrence of any of

  the Default Events referred to in clause 9(ii) to (viii) below inclusive;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (viii)

  	

  shall permit any person

  authorised by the Lender at all reasonable times upon at least 24 hours

  notice (unless a Default Event is continuing unremedied or unwaived in which

  case no notice will be required) to inspect the Goods and permit on procure

  the granting of permission for such person to enter any land or premises

  where the Goods may be situated;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (ix)

  	

  shall pay on demand to the

  Lender with interest all its costs and expenses incurred in:-

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (a)

  	

  the advance of the Loan

  and the acceptance and registration of this mortgage;  

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (b)

  	

  the preservation of the

  Lender’s security in the Goods;

  

 

11

 

	

   

  	

   

  	

   

  	

  (c)

  	

  the exercise by the Lender

  of any of its powers under this mortgage and in ascertaining the whereabouts

  and/or safekeeping of the Goods;

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  (d)

  	

  any legal proceedings

  instituted by the Lender under this mortgage.

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

  Insurances

  	

   

  	

  8.1        The Insurances shall be effected and maintained by the

  Borrower at all times while any amount is secured by this mortgage and shall

  be endorsed with a note of the Lender’s interest.

  
	

   

  	

   

  	

   

  
	

  Risks

  Insured

  	

   

  	

  8.2        The Insurances shall be all insurable risks cover under

  policies, on terms, subject only to exclusions and/or an excess approved by

  the Lender and with insurers acceptable to the Lender.

  
	

   

  	

   

  	

   

  
	

  Sum

  Insured

  	

   

  	

  8.3        The Goods shall be insured for their market value as agreed

  by the parties or, failing agreement, as determined, at the expense of the

  Borrower, by a valuer acceptable to the parties.

  
	

   

  	

   

  	

   

  
	

  Premiums

  	

   

  	

  8.4        The Borrower shall pay punctually all premiums payable by

  the Borrower in respect of the Insurances and, on request, produce receipts

  or other proof of payment to the Lender.

  
	

   

  	

   

  	

   

  
	

  Application

  of Insurance Proceeds

  	

   

  	

  8.5        The Lender may elect to require the Borrower to apply any

  proceeds of the Insurances received by it in making good the loss, repairing

  the damage, or satisfying the liability in respect of which the claim was

  made or in satisfaction of any amount secured by this mortgage and pending

  such election such proceeds shall be held in trust for the Lender.

  
	

   

  	

   

  	

   

  
	

  Insurance

  Warranties

  	

   

  	

  8.6        The Borrower shall not use and shall not allow the Goods to

  be used other than in conformity with the terms of the Insurances, including

  any express or implied warranties, without the prior written consent of the

  insurers and without paying any extra premium required.

  
	

   

  	

   

  	

   

  
	

  Lender

  may Insure

  	

   

  	

  8.7        If the Borrower fails to effect or maintain the Insurances,

  the Lender may effect such Insurances at the Borrower’s expense to be

  reimbursed to the Lender on demand with interest.

  
	

   

  	

   

  	

   

  
	

  Default

  Events

  	

   

  	

  9.          The following are the Default Events:-

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (i)

  	

  the

  Borrower does not pay any sum of money secured by this mortgage within 10

  days of the due date for payment (unless the Lender elects in its absolute

  discretion to accept late payment);

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (ii)

  	

  the

  Borrower enters into or attempts to enter into a composition or arrangement

  with its creditors or any 

  

 

12

 

	

   

  	

   

  	

   

  	

  of

  them;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iii)

  	

  a

  receiver or administrative receiver is appointed of the Borrower’s assets or

  any of them or a meeting, whether formal or informal, is called of the

  Borrower’s creditors or any of them;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iv)

  	

  the

  petition for the appointment to the Borrower of an administrator is presented

  or the Borrower goes into liquidation, except for a voluntary liquidation for

  the purpose of amalgamation or reconstruction on terms previously approved by

  the Lender in writing;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (v)

  	

  the

  levy against the Goods of any distress or execution which is not paid out

  within 10 Working Days of written request so requiring from the Lender to the

  Borrower;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (vi)

  	

  any

  of the warranties in clause 5 above proves to be incorrect, inaccurate or

  misleading in any material respect;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (vii)

  	

  the

  Goods are a Total Loss;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (viii)

  	

  the

  Borrower is unable to pay its debts within the meaning of Section 123 of the

  Insolvency Act 1986;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (ix)

  	

  the

  Lender’s Security is in the Lender’s reasonable opinion in jeopardy in any

  material respect;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (x)

  	

  any

  company in the Barclays PLC group withdraws any facility or demands payment

  as a result of a default of the Borrower;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (xi)

  	

  the

  Borrower fails to comply with any of its obligations, covenants or

  undertakings contained in this deed (other than those relating to the payment

  of money) and such default (if in the opinion of the Lender it is capable of

  remedy) is not remedied to the Lender’s satisfaction within 10 days after the

  occurrence of such failure.

  
	

   

  	

   

  	

   

  	

   

  
	

  Lender’s Powers

  	

   

  	

  10.1         On the occurrence of a Default Event

  the Lender may, at any time on the date of the occurrence or any subsequent

  date, without prejudice to any powers available to a Mortgagee by law, do any

  of the following by itself or by such agents as it thinks fit and without

  prior notice to the Borrower:-

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (i)

  	

  take

  possession of the Goods severing them from any land or other goods (but

  subject to the rights of the hirer under any hire agreement), if necessary,

  the Borrower reimbursing the Lender any expense incurred or damage suffered

  on demand with interest;

  

 

13

 

	

   

  	

   

  	

  (ii)

  	

  move

  the Goods to a safe place;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iii)

  	

  discharge,

  settle or take or defend any proceedings in respect of any claims incurred in

  connection with the Goods or the Insurances and collect on the Insurances and

  give any good receipts required;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (iv)

  	

  pending

  sale, insure, maintain, repair, operate, hire out or otherwise use the Goods

  (but subject to the rights of the hirer under any hire agreement);

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (v)

  	

  sell

  the Goods by public auction or private sale, without advertisement and at

  such place, at such time and on such terms as the Lender may determine;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (vi)

  	

  do

  all such other acts and things as may be considered to be necessary for any

  of the matters or powers aforesaid.

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  Section

  103 of the Law of Property Act 1925 shall not apply to this security or any

  sale made by virtue hereof.

  
	

   

  	

   

  	

   

  	

   

  
	

  Lender

  not Liable

  	

   

  	

  10.2      The Lender shall not be answerable for

  any loss occasioned by sale by it of the Goods under this mortgage or any

  postponement of sale.

  
	

   

  	

   

  	

   

  
	

  Lender’s

  Receipt

  	

   

  	

  10.3      On any sale of the Goods the Lender’s

  receipt for the purchase money shall effectively discharge the

  purchaser.  The purchaser shall not be

  bound to enquire whether the Lender’s power of sale has arisen or is

  exercisable and shall not be concerned as to how the proceeds of sale are

  applied.

  
	

   

  	

   

  	

   

  
	

  Application

  	

   

  	

  10.4      All monies received by the Lender in

  respect of:-

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (i)

  	

  sale of the Goods and/or

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  (ii)

  	

  proceeds of the Insurances

  which the Lender, in its sole discretion, elects not to release to the

  Borrower for application by it in accordance with clause 8.5 above;

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  shall

  be applied as follows:-

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  FIRST

  	

  in

  payment or reimbursement to the Lender of all costs and expenses incurred by

  it in connection with this mortgage and the exercise of its powers hereunder;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  SECONDLY

  	

  in

  payment of any accrued but unpaid interest in connection with this mortgage;

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

  THIRDLY

  	

  in

  repayment or reduction of the Loan;

  
							

 

14

 

	

   

  	

   

  	

  FOURTHLY

  	

  in

  payment of any surplus to the Borrower.

  
	

   

  	

   

  	

   

  	

   

  
	

  Attorney

  	

   

  	

  11.        The Borrower hereby irrevocably appoints the Lender as its

  attorney with full power to substitute any other person, for the Borrower and

  in the Borrower’s name to sign, seal, deliver and otherwise perfect any deed,

  assurance or agreement and do anything which may be required for any purpose

  under or in connection with this mortgage.

  
	

   

  	

   

  	

   

  
	

  Waiver

  	

   

  	

  12.        The Lender’s rights and powers under this mortgage shall

  not be prejudiced or affected by delay or omission on the Lender’s part.  If the Lender, on occasion expressly or

  impliedly waives any of its rights or powers, such waiver shall not prevent

  the Lender from subsequently acting strictly in accordance with such rights

  and powers.

  
	

   

  	

   

  	

   

  
	

  Further

  Assurances

  	

   

  	

  13.        The Borrower shall at its own expense sign, seal, deliver

  and otherwise perfect any deed, assurance or agreement and do anything the

  Lender may require to perfect or protect the security constituted by this

  mortgage.

  
	

   

  	

   

  	

   

  
	

  Notices

  	

   

  	

  14.        Any notice served under this mortgage shall be sufficiently

  served if sent by pre-paid letter post to the respective addresses above (or

  such changed address as one party may notify to the other) and proof of

  dispatch shall be conclusive evidence of receipt by the addressee in due

  course of transmission.

  
	

   

  	

   

  	

   

  
	

  Consolidation

  	

   

  	

  15.        If the Lender has from the Borrower security over any other

  property of the Borrower, the Borrower may not redeem such security or the

  security constituted by this mortgage alone without the prior written consent

  of the Lender.  Section 93 of the Law

  of Property Act 1925 (which restricts the consolidation of mortgages) shall

  not apply to the security constituted by this mortgage.

  
	

   

  	

   

  	

   

  
	

  Law

  	

   

  	

  16.        This mortgage shall be governed by the laws of England.

  
	

   

  	

   

  	

   

  
	

  Severance

  	

   

  	

  17.        Each of the provisions of this deed is severable and

  distinct from the others and if at any time one or more of such provisions is

  or becomes invalid illegal or unenforceable, the validity legality and

  enforceability of the remaining provisions hereof shall not in any way be

  affected or impaired thereby.

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  IN

  WITNESS of which this deed was executed and is delivered on and takes effect

  from the day and year first before written.

  

 

SCHEDULE - THE GOODS

 

	

  Date

  	

   

  	

  Description

  	

   

  	

  Bar

  Codes/Serial

  Nos.

  	

   

  	

  Approval

  No.

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  

 

15JM10737.DOC;1

Exhibit 10.71

AMENDMENT NO. 4

TO

FINANCING AGREEMENT

                                This

AMENDMENT NO. 4 TO FINANCING AGREEMENT (this “Amendment”), made as of

March 31, 2002, between U.S. BANK NATIONAL ASSOCIATION (formerly known as

Firstar Bank, National Association), a national banking association (“Bank”)

and VARI-LITE, INC., a Delaware corporation (“Borrower”),

WITNESSETH:

                                WHEREAS,

Borrower and Bank have entered into that certain Financing Agreement, dated as

of December 29, 2000, as amended by that certain Amendment No. 1 to

Financing Agreement, dated as of March 30, 2001, Amendment No. 2 to

Financing Agreement, dated as of June 30, 2001, and Amendment No. 3

to Financing Agreement, dated as of December 31, 2001 (as so amended, the

“Financing Agreement”), pursuant to which Bank has made certain loans and

financial accommodations available to Borrower; and

                                WHEREAS,

Borrower and Bank desire to further amend the Financing Agreement as

hereinafter set forth;

                                NOW,

THEREFORE, in consideration of the mutual promises and agreements contained

herein and other good and valuable consideration, the receipt and adequacy of

which are hereby acknowledged, Bank and Borrower agree as follows:

1.  DEFINED TERMS.

                                Each defined

term used herein and not otherwise defined herein has the meaning ascribed to

such term in the Financing Agreement.

 

2.  AMENDMENT TO FINANCING AGREEMENT.

                                The

Financing Agreement is amended, effective as of the date of this Agreement, as

follows:

                Amendment to

Exhibit J. Exhibit J to the Financing Agreement is amended in its

entirety to read as set forth on Exhibit J attached hereto and by

reference made a part hereof.

 

3.  REPRESENTATIONS

AND WARRANTIES.

                                Borrower

represents and warrants to Bank as follows:

3.1           The Amendment.  This Amendment has been duly and validly

executed by an authorized executive officer of Borrower and constitutes the

legal, valid and binding obligation of Borrower enforceable against Borrower in

accordance with its terms.

3.2           Financing Agreement.  The Financing Agreement as amended by this

Amendment remains in full force and effect and remains the valid and binding

obligation of 

 

 

 

Borrower enforceable

against Borrower in accordance with its terms. 

Borrower hereby ratifies and confirms the Financing Agreement as amended

by this Amendment.

3.3           Nonwaiver. Neither the

execution, delivery, performance or effectiveness of this Amendment shall

operate nor be deemed to be nor construed as a waiver (i) of any right, power

or remedy of Bank under the Financing Agreement, nor (ii) of any term,

provision, representation, warranty or covenant contained in the Financing

Agreement or any other documentation executed in connection therewith.  Further, none of the provisions of this

Amendment shall constitute, or be deemed to be or construed as, a waiver of any

Event of Default under the Financing Agreement as amended by this Amendment.

3.4           Reference to and Effect on the

Financing Agreement.  Upon the

effectiveness of this Amendment, each reference in the Financing Agreement to

“this Agreement”, “hereunder”, “hereof”, “herein”, or words of like import

shall mean and be a reference to the Financing Agreement as amended hereby, and

each reference to the Financing Agreement in any other document, instrument or

agreement executed and/or delivered in connection with the Financing Agreement

shall mean and be a reference to the Financing Agreement as amended hereby.

3.5           Claims and Defenses.  As of the date of this Amendment, Borrower

has no defenses, claims, counterclaims or setoffs with respect to the Financing

Agreement or its Obligations thereunder or with respect to any actions of the

Bank or any of its officers, directors, shareholders, employees, agents or

attorneys, and Borrower irrevocably and absolutely waives any such defenses,

claims, counterclaims and setoffs and releases the Bank and each of its

officers, directors, shareholders, employees, agents and attorneys from the

same.

4.  CONDITIONS PRECEDENT TO EFFECTIVENESS OF

THIS AMENDMENT NO. 4

                                In

addition to all of the other conditions and agreements set forth herein, the

effectiveness of this Amendment is subject to the each of the following

conditions precedent:

4.1           Amendment No. 4 to Financing

Agreement.  Bank shall have received

an original counterpart of this Amendment No. 4 to Financing Agreement,

executed and delivered by a duly authorized officer of Borrower.

4.2           Acknowledgment of Guarantor.  Bank shall have received an original of the

attached Acknowledgment of Vari-Lite International, Inc., a Delaware

corporation, executed and delivered by a duly authorized officer of Vari-Lite

International, Inc..

4.3           No Material Adverse Change.  There shall have occurred no material and

adverse change in the Borrower’s assets, liabilities or financial condition

since the date of the last Financials delivered by Borrower to Bank nor shall

there have been any material damage to or loss of any of Borrower’s assets or

properties since such date.

4.4           Amendment Fee.  Borrower shall have paid Bank an amendment

fee in an amount of Fifteen Thousand Dollars ($15,000.00).

 

J-2

 

5.  SECTION  

MISCELLANEOUS.

5.1           Governing Law.  This Amendment has been delivered and

accepted at and shall be deemed to have been made at Cleveland, Ohio.  This Amendment shall be interpreted and the

rights and liabilities of the parties hereto determined in accordance with the

laws of the State of Ohio, without regard to principles of conflict of law, and

all other laws of mandatory application.

5.2           Severability.  Each provision of this Amendment shall be interpreted

in such manner as to be valid under applicable law, but if any provision hereof

shall be invalid under applicable law, such provision shall be ineffective to

the extent of such invalidity, without invalidating the remainder of such

provision or the remaining provisions hereof.

5.3           Counterparts.  This Amendment may be executed in one or

more counterparts, each of which, when taken together, shall constitute but one

and the same agreement.

 

[REMAINDER OF PAGE INTENTIONALLY BLANK]

 

 

 

J-3

 

                                IN WITNESS

WHEREOF, Borrower has caused this Amendment No. 4 to Financing Agreement

to be duly executed and delivered by its duly authorized officer as of the date

first above written.

 

	

   

  	

  Signed and acknowledged

  in the presence of:

  	

   

  	

  VARI-LITE, INC.

  	

   

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

  Its:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

  Name:

  	

   

  	

   

  	

   

  
								

 

 

J-4

 

 

	

  STATE OF

  	

  )

  
	

   

  	

  ) ss:

  
	

  COUNTY OF

  	

  )

  

 

                                The

foregoing instrument was acknowledged before me this        day of May, 2002, by                     , the                   of Vari-Lite, Inc., a Delaware corporation, on

behalf of the corporation.

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

  Notary Public

  

 

 

 

Accepted at

Cleveland, Ohio,

Effective as of March 31 2002.

U.S. BANK NATIONAL ASSOCIATION

 

	

  By:

  	

   

  
	

   

  	

   

  
	

  Its:

  	

   

  

 

 

J-5

 

                ACKNOWLEDGMENT OF GUARANTOR

 

 

                                The undersigned,

Vari-Lite International, Inc., a Delaware corporation, having guaranteed all of

the obligations of Vari-Lite, Inc. to U.S. Bank National Association (formerly

known as Firstar Bank, National Association) (“Bank”), hereby acknowledges and

agrees, effective as of March 31, 2002, to the terms of the foregoing

Amendment No. 4 to Financing Agreement. 

The undersigned represents and warrants to Bank that the Guaranty

executed and delivered by the undersigned to Bank, dated as of

December 29, 2000, remains the valid and binding obligation of the

undersigned, enforceable against it in accordance with its terms.

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   VARI-LITE INTERNATIONAL, INC.

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  By:

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

   

  	

  Its:

  	

   

  

 

 

 

	

  STATE OF 

  	

   

  	

  )

  
	

   

  	

   

  	

  )ss:

  
	

  COUNTY OF 

  	

   

  	

  )

  
				

 

                                The foregoing instrument was

acknowledged before me this         day

of May, 2002, by                          

, the                             

of VARI-LITE INTERNATIONAL, INC., a Delaware corporation, on behalf of

the company.

 

 

	

   

  	

   

  	

   

  	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  	

   

  	

  Notary Public

  	

   

  	

   

  
							

 

J-6

 

Exhibit J

Financial Covenants

 

Financial Covenants.  Borrower

agrees that it shall:

 

(A)                              Net Capital Expenditures. 

Not make nor permit International to make  Net Capital Expenditures in an aggregate amount exceeding

$6,000,000 for any fiscal year.

 

(B)                                Earnings Before Interest, Taxes,

Depreciation and Amortization.  Not permit

International’s Earnings Before Interest, Taxes, Depreciation and Amortization

(“EBITDA”) to be less than the following amounts for the following periods:

 

	

  EBIDTA

  	

   

  	

  Period

  
	

   

  	

   

  	

   

  
	

  $

  	

  2,931,000

  	

   

  	

  10/01/00 - 12/31/00

  
	

  $

  	

  6,234,000

  	

   

  	

  10/01/00 - 03/31/01

  
	

  $

  	

  7,461,000

  	

   

  	

  10/01/00 - 06/30/01

  
	

  $

  	

  9,491,000

  	

   

  	

  10/01/00 - 09/30/01

  
	

  $

  	

  7,650,000

  	

   

  	

  01/01/01 - 12/31/01

  
	

  $

  	

  6,940,000

  	

   

  	

  04/01/01 - 03/31/02

  
	

  $

  	

  9,550,000

  	

   

  	

  07/01/01 - 06/30/02

  
	

  $

  	

  10,600,000

  	

   

  	

  10/01/01 - 09/30/02

  
	

  $

  	

  16,314,000

  	

   

  	

  01/01/02 -12/31/02

  
	

  $

  	

  16,882,000

  	

   

  	

  04/01/02 -03/31/03

  
	

  $

  	

  17,385,000

  	

   

  	

  07/01/02 -06/30/03

  
	

  $

  	

  18,123,000

  	

   

  	

  10/01/02 -09/30/03

  

 

(C)                                Net Worth.  Not permit

International’s Net Worth to be less than the following amounts as of the

following dates:

 

	

  Net Date

  	

   

  	

  Period

  
	

   

  	

   

  	

   

  
	

  $

  	

  45,000,000

  	

   

  	

  12/31/00

  
	

  $

  	

  45,000,000

  	

   

  	

  03/31/01

  
	

  $

  	

  45,000,000

  	

   

  	

  06/30/01

  
	

  $

  	

  44,600,000

  	

   

  	

  09/30/01

  
	

  $

  	

  44,000,000

  	

   

  	

  12/31/01

  
	

  $

  	

  43,041,000

  	

   

  	

  03/31/02

  
	

  $

  	

  44,000,000

  	

   

  	

  06/30/02

  
	

  $

  	

  44,000,000

  	

   

  	

  09/30/02

  
	

  $

  	

  47,750,000

  	

   

  	

  12/31/02

  
	

  $

  	

  47,750,000

  	

   

  	

  03/31/03

  
	

  $

  	

  47,750,000

  	

   

  	

  06/30/03

  
	

  $

  	

  47,750,000

  	

   

  	

  09/30/03

  

 

7

 

(D)                               Maximum Debt. 

Not permit International’s Total Funded Indebtedness to exceed the

following amounts at any time during the following periods:

	

  Total Funded Indebtedness

  	

   

  	

  Period

  
	

   

  	

   

  	

   

  
	

  $

  	

  29,000,000

  	

   

  	

  01/01/01 - 06/30/01

  
	

  $

  	

  27,000,000

  	

   

  	

  07/01/01 - 09/30/01

  
	

  $

  	

  25,000,000

  	

   

  	

  10/01/01 - 12/31/01

  
	

  $

  	

  25,000,000

  	

   

  	

  01/01/02 - 03/31/02

  
	

  $

  	

  25,000,000

  	

   

  	

  04/01/02 - 06/30/02

  
	

  $

  	

  25,000,000

  	

   

  	

  07/01/02 - 09/30/02

  
	

  $

  	

  25,000,000

  	

   

  	

  10/01/02 - 12/31/02

  
	

  $

  	

  27,000,000

  	

   

  	

  01/01/03 - 03/31/03

  
	

  $

  	

  27,000,000

  	

   

  	

  04/01/03 - 06/30/03

  
	

  $

  	

  27,000,000

  	

   

  	

  07/01/03 - 09/30/03

  
	

  $

  	

  27,000,000

  	

   

  	

  at any time thereafter

  

 

(E)                                 Leverage Ratio. 

Not permit International’s Leverage Ratio to exceed the following ratios

as of the following dates:

 

	

  Leverage Ratio

  	

   

  	

  Date

  
	

   

  	

   

  	

   

  
	

  4.65 to 1

  	

   

  	

  03/31/01

  
	

  3.23 to 1

  	

   

  	

  06/30/01

  
	

  2.56 to 1

  	

   

  	

  09/30/01

  
	

  2.90 to 1

  	

   

  	

  12/31/01

  
	

  3.05 to 1

  	

   

  	

  03/31/02

  
	

  2.30 to 1

  	

   

  	

  06/30/02

  
	

  2.05 to 1

  	

   

  	

  09/30/02

  
	

  1.80 to 1

  	

   

  	

  12/31/02

  
	

  1.75 to 1

  	

   

  	

  03/31/03

  
	

  1.65 to 1

  	

   

  	

  06/30/03

  
	

  1.65 to 1

  	

   

  	

  09/30/03

  

 

8

 

(F)                                 Total Debt Service Ratio. 

Not permit International’s Total Debt Service Ratio to be less than the

following ratios as of the following dates:

 

	

  Total Debt Service Ratio

  	

   

  	

  Date

  
	

   

  	

   

  	

   

  
	

  0.61 to 1

  	

   

  	

  09/30/01

  
	

  0.60 to 1

  	

   

  	

  12/31/01

  
	

  0.53 to 1

  	

   

  	

  03/31/02

  
	

  0.90 to 1

  	

   

  	

  06/30/02

  
	

  1.00 to 1

  	

   

  	

  09/30/02

  
	

  1.20 to 1

  	

   

  	

  12/31/02

  
	

  1.20 to 1

  	

   

  	

  03/31/03

  
	

  1.20 to 1

  	

   

  	

  06/30/03

  
	

  1.20 to 1

  	

   

  	

  09/30/03

  

II.                                     Definitions

 

(A)                              The term “Net Capital Expenditures”

for purposes of this Exhibit J shall mean the sum of  (a) International’s consolidated capital

expenditures (including, but not by way of limitation, expenditures for fixed

assets or leases capitalized or required to be capitalized on International’s

consolidated books by purchase, lease-purchase agreement, option or otherwise),

minus  (b) the net book

value of capital assets previously sold and replaced by such capital

expenditures.

 

(B)                                The term “Earnings Before Interest,

Taxes, Depreciation, and Amortization” or “EBITDA”  for

purposes of this Exhibit J shall mean International’s consolidated

earnings from operations before income taxes and interest income or expense plus

depreciation, plus amortization of all non-cash charges, all as

determined in accordance with generally accepted accounting principles, and

shall not include any gains or losses from the sale of assets outside the

normal course of business or any other extraordinary accounting adjustments or

non-recurring items of income or loss.

 

(C)                                The term “Net Worth” for purposes

of this Exhibit J shall mean the total of International’s

consolidated shareholders equity, as determined in accordance with generally

accepted accounting principles, consistently applied.

 

(D)                               The term “Total Funded Indebtedness”

for purposes of this Exhibit J shall have the meaning and be

determined in accordance with generally accepted accounting principles

consistently applied by International on a consolidated basis in accordance

with past practices.

9

 

(E)                                 The term “Leverage Ratio” for

purposes of this Exhibit J shall mean:

 

1.             As of 03/31/01,  the ratio of Total Funded Indebtedness as of

such date to EBITDA as measured from 10/01/00 to 03/31/01;

 

2.             As of 06/30/01, the

ratio of Total Funded Indebtedness as of such date to EBITDA as measured from

10/01/00 to 06/30/01;

 

3.             As of 09/30/01, the

ratio of Total Funded Indebtedness as of such date to EBITDA as measured from

10/01/00 to 09/30/01; and

 

4.             As of 12/31/01 and as of the last

day of any fiscal quarter thereafter, the ratio of Total Funded

Indebtedness as of such date to EBITDA as measured on a four quarter trailing

basis.

 

(F)                                 The term “Unfunded Capital Expenditure

Payments” for purposes of this Exhibit J shall mean the amount

of consolidated capital expenditures of International which are not financed

under the CapEx Facility nor any other financing arrangement with any other

person.

 

(G)                                The term “Total Debt Service Ratio”

for purposes of this Exhibit J shall mean:

 

1.             For the period commencing on the

07/01/01 and ending on 09/30/01, the ratio of (a) EBITDA as

measured from 01/01/01 to 09/30/01 to (b) the sum of  (i) the total consolidated and

regularly scheduled principal and interest payments of Total Funded

Indebtedness for the period 01/01/01 to 09/30/01,  plus  (ii) Unfunded

Capital Expenditure Payments for the period 01/01/01 to 09/30/01, minus

(iii) the US $1,000,000 Japanese principal payment paid by Vari-Lite Asia,

Inc. in March, 2001;

 

                                                2.             For the period commencing on the

10/01/01 and ending on 12/31/01, the ratio of (a) EBITDA as

measured on a four quarter trailing basis to (b) the sum of  (i) the total consolidated and

regularly scheduled principal and interest payments of Total Funded

Indebtedness for such four quarter trailing period,  plus (ii) Unfunded Capital Expenditure Payments for such

four quarter trailing period,  minus  (iii) the US $1,000,000 Japanese

principal payment paid by Vari-Lite Asia, Inc. in March, 2001, plus (iv)

the amount of taxes paid by International on a consolidated basis during such

four quarter trailing period, minus (v) the amount of Japanese taxes

paid by Vari-Lite Asia, Inc. in February, 2001; and

 

                                                3.             For all periods after 12/31/01,

the ratio of (a) EBITDA as measured on a four quarter trailing basis to (b) the

sum of  (i) the total

consolidated and regularly scheduled principal and interest payments of Total

Funded Indebtedness for such four quarter trailing period,  plus (ii) Unfunded Capital

Expenditure Payments for such four quarter trailing period, plus (iii)

the amount of taxes paid by International on a consolidated basis during such

four quarter trailing period.

10

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