Investment Monitoring Agreement [Amendment No. 1] - Levine Leichtman Capital Partners Inc., Media Arts Group Inc., Thomas Kinkade Stores Inc., MAGI Entertainment Products Inc. and California Coast Galleries
FIRST AMENDMENT TO INVESTMENT MONITORING AGREEMENT
THIS FIRST AMENDMENT TO INVESTMENT MONITORING AGREEMENT ("FIRST
AMENDMENT") is entered into as of February 21, 1997 by and among LEVINE
LEICHTMAN CAPITAL PARTNERS, INC., a California corporation ("LLCP"), on the
one hand, and MEDIA ARTS GROUP, INC., a Delaware corporation ("MEDIA ARTS" or
the "COMPANY"), THOMAS KINKADE STORES, INC., a California corporation
("TKSI"), MAGI ENTERTAINMENT PRODUCTS, INC., a California corporation ("MAGI
ENTERTAINMENT"), MAGI SALES, INC., a California corporation ("MAGI SALES"),
and CALIFORNIA COAST GALLERIES, a California corporation ("CCG," and together
with TKSI, MAGI Entertainment and MAGI Sales being referred to collectively
as the "SUBSIDIARIES" and individually as a "SUBSIDIARY"), on the other hand,
with reference to the following facts:
RECITALS
A. LLCP, Media Arts and the Subsidiaries (other than CCG) are
parties to that certain Investment Monitoring Agreement entered into as of
September 10, 1996 (the "MONITORING AGREEMENT"), pursuant to which LLCP is
monitoring the investment of Levine Leichtman Capital Partners, L.P., a
California limited partnership ("INVESTOR"), in the Company, which investment
was made in connection with that certain Securities Purchase Agreement dated as
of July 26, 1995, as amended (the "Securities Purchase Agreement"). Capitalized
terms not otherwise defined herein are as defined in the Monitoring Agreement.
B. Concurrently herewith, Investor, Media Arts and the Subsidiaries
are amending and restating the terms of the Securities Purchase Agreement, and
pursuant to such amendment and restatement the parties wish to amend certain
terms of the Monitoring Agreement as set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, the receipt and adequacy of which are hereby
acknowledged, it is agreed as follows:
1. AMENDMENT OF MONITORING AGREEMENT. The Monitoring Agreement is hereby
amended as follows:
1.1 ADDITIONAL SUBSIDIARY. From and after the date hereof, CCG shall be a
"Subsidiary" under and as defined in the Monitoring Agreement, and CCG hereby
agrees to be bound by all of the terms and conditions applicable to the
"Subsidiaries" as set forth in the Monitoring Agreement as amended by this First
Amendment.
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1.2 SECURITIES PURCHASE AGREEMENT. Each reference in the Monitoring
Agreement to the Securities Purchase Agreement shall hereafter be deemed to be a
reference to that certain Credit Agreement of even date herewith among Investor,
Media Arts and the Subsidiaries.
1.3 COMPENSATION. The monthly monitoring fee set forth is Section 5 of
the Monitoring Agreement (a) shall be reduced from $12,500 to $11,500 beginning
with the monitoring fee payable on February 28, 1997, and (b) shall be
discontinued beginning with the monitoring fee otherwise payable in the month
immediately following the month in which the outstanding principal amount under
the Consolidated Note (as defined in the Credit Agreement referred to above) is
equal to or less than $5,400,000.
2. MISCELLANEOUS.
2.1 HEADINGS. The various headings of this First Amendment are inserted
for convenience of reference only and shall not affect the meaning or
interpretation of this First Amendment or any provisions hereof.
2.2 COUNTERPARTS. This First Amendment may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which together shall be deemed to be one and the same instrument.
2.3 INTERPRETATION. No provision of this First Amendment shall be
construed against or interpreted to the disadvantage of any party hereto by any
court or other governmental or judicial authority by reason of such party's
having or being deemed to have structured, drafted or dictated such provision.
2.4 COMPLETE AGREEMENT. The Monitoring Agreement, as amended by this
First Amendment, constitutes the complete agreement between the parties with
respect to the subject matter hereof, and supersedes any prior written or oral
agreements, writings, communications or understandings of the parties with
respect thereto.
2.5 GOVERNING LAW. This First Amendment shall be governed by, and
construed and enforced in accordance with, the laws of the State of California
applicable to contracts made and performed in such state, without regard to the
principles thereof regarding conflict of laws.
2.6 EFFECT. Upon the effectiveness of this First Amendment, each
reference in the Monitoring Agreement to "this Agreement," "hereunder," "hereof"
or words of like import, shall mean and be a reference to the Monitoring
Agreement as amended hereby.
2.7 CONFLICT OF TERMS. In the event of any inconsistency between the
provisions of this First Amendment and any provision of the Monitoring
Agreement, the terms and provisions of this First Amendment shall govern and
control.
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to Monitoring Agreement as of the day and year first above written.
MEDIA ARTS GROUP, INC., a THOMAS KINKADE STORES, INC., a
Delaware corporation California corporation
By: /s/ Kenneth E. Raasch By: /s/ Kenneth E. Raasch
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Kenneth E. Raasch Kenneth E. Raasch
President and CEO President and CEO
MAGI ENTERTAINMENT PRODUCTS, MAGI SALES, INC., a
INC., a California corporation California corporation
By: /s/ Kenneth E. Raasch By: /s/ Kenneth E. Raasch
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Kenneth E. Raasch Kenneth E. Raasch
President and CEO President and CEO
CALIFORNIA COAST GALLERIES,
INC., a California corporation
By: /s/ Kenneth E. Raasch
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Kenneth E. Raasch
President and CEO
Acknowledged:
LEVINE LEICHTMAN CAPITAL PARTNERS, INC.
By: /s/ Arthur E. Levine
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Arthur E. Levine, President
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