EXHIBIT 10.28
AMENDMENT NO. 4 dated as of September 30, 1999 to the
Amended and Restated Credit and Guaranty Agreement dated as
of July 9, 1997, as amended and restated as of August 10,
1998, among ARTISAN PICTURES INC. ("Pictures"), ARTISAN HOME
ENTERTAINMENT INC. ("Home Entertainment"; and together with
Pictures, collectively, the "Borrower"), the Guarantors
named therein, the Lenders referred to therein and THE CHASE
MANHATTAN BANK, as Administrative Agent and as Fronting Bank
for the Lenders (the "Agent") (as the same may be amended,
supplemented or otherwise modified, the "Credit Agreement").
INTRODUCTORY STATEMENT
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The Lenders have made available to the Borrower a credit facility
pursuant to the terms of the Credit Agreement.
The Borrower and Guarantors have requested certain modifications to
the Credit Agreement to, among other things, temporarily increase the
Commitments under the Credit Agreement to $191,350,000 in order to allow the
Borrower to have up to $185,000,000 in Loans outstanding at any given time. As
a result of the increase in the Commitments, as the amount outstanding under the
Term Loan Commitments is reduced by scheduled installment payments, the Borrower
will be able to access additional loans under the Revolving Credit Commitments,
subject to the $185,000,000 limit on the aggregate amount of Loans outstanding.
In addition, the Borrower and Guarantors have requested that the Agent
and the Lenders consent to the Credit Parties entering into Amendment No. 3 to
the note purchase agreement governing the Secured Subordinated Notes ("Amendment
No. 3") to facilitate the requested increase in the Commitments.
The Lenders and the Agent have agreed to increase the Commitments
under the Credit Agreement and to make certain other revisions to the Credit
Agreement, all on the terms and subject to the conditions hereinafter set forth.
Therefore, the parties hereto hereby agree as follows:
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Section 1. Defined Terms. Capitalized terms used herein and not
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otherwise defined herein shall have the meaning given them in the Credit
Agreement.
Section 2. Amendments to the Credit Agreement. Subject to the
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satisfaction of the conditions precedent set forth in Section 5 hereof, the
Credit Agreement is hereby amended as of the Effective Date (as hereinafter
defined) as follows:
(A) Article 1 of the Credit Agreement is hereby amended by adding the
following definitions in the appropriate alphabetical sequence:
"Change in Management" shall mean (i) both Kenneth Schapiro and Mark
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Curcio shall cease for any reason, including, without limitation,
termination of employment, death or disability, to perform the
functions and services currently being performed by such Person and
(ii) the Borrower shall have failed to appoint a replacement for
Kenneth Schapiro or Mark Curcio, as the case may be, who is reasonably
acceptable to the Required Lenders within 180 days of such
discontinuance. For purposes hereof, a replacement shall be deemed to
be acceptable to the Required Lenders in the event the Administrative
Agent or Required Lenders do not object to a proposed replacement
within 30 days after the Administrative Agent and Lenders receive
written notice (which notice makes explicit reference to this
definition) from the Borrower informing them of such proposed
replacement.
"Major Studio" shall mean Universal Pictures, a division of Universal
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City Studios, Inc., Warner Bros., a division of Time Warner
Entertainment Company, L.P., Twentieth Century Fox Film Corporation,
Sony Pictures Entertainment, Paramount Pictures Corporation, and The
Walt Disney Company.
(B) The definitions of "Bain Related Party" and "Change in Control"
appearing in Article 1 of the Credit Agreement are each hereby amended and
restated in its entirety to read as follows:
"Bain Related Party" or "Bain Related Parties" shall mean individually
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or collectively, as the context may require, (i) Bain Capital, (ii)
any Affiliate of Bain Capital, (iii) Geoffrey Rehnert, Geoffrey
Rehnert and Marc Wolpow, or a corporation, partnership or other entity
of whom at least 50% of the voting stock or similar equity interests
are collectively held by Geoffrey Rehnert and Marc Wolpow, and (iv)
any trust, corporation, partnership or other entity of whom at least
80% of the voting stock or all of the general partnership interests or
other controlling interests are held, directly or indirectly, solely
by persons referred to in the preceding clauses of this definition.
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"Change in Control" shall mean (i) the failure for any reason of the
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Bain Related Parties to own at least 75% of Holdings' voting stock
owned by them as of September 16, 1999, (ii) any Person or group (such
term being used as defined in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) acquires ownership or
control of voting stock of Holdings having voting power greater than
the voting power at the time controlled by the Bain Related Parties,
(iii) if at any time, individuals who at September 16, 1999,
constituted the Board of Directors of Holdings (together with any new
directors whose election by such Board of Directors or whose
nomination for election by the shareholders of Parent was approved by
a vote of the majority of the directors then still in office who were
either directors at September 16, 1999 or whose election or nomination
for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of Holdings then in
office, (iv) prior to the consummation of an initial public offering
by Parent, the sale or other disposition of any of the voting stock of
Parent to anyone other than a Bain Related Party; provided, however,
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that the sale of 100% of the stock of Parent to either (x) a Major
Studio or (y) a public company with an investment grade rating from
Standard & Poor's or Moody's and total market equity value of at least
$1,000,000,000 shall not constitute a Change of Control hereunder, (v)
after any initial public offering by Parent, that any person or group
(such term being used as defined in Section 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) acquires ownership or
control of voting stock of Parent having voting power greater than the
voting power of Holdings and its Affiliates, as a group, or (vi) the
failure of Parent to be the sole direct or indirect shareholder of the
Borrower and the other Credit Parties.
(C) Section 2.1 (e) of the Credit Agreement is hereby amended in its
entirety to read as follows:
"(e) Notwithstanding anything to the contrary above, a Lender shall
not be obligated to make any additional Loans or incur any incremental
L/C Exposure if, as a result thereof, the aggregate principal amount
of all Loans then outstanding plus the then current L/C Exposure plus
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the unused portion of the Special Production Tranche for each
Designated Picture, exceeds the lesser of (x) the Borrowing Base or
(y) the lesser of the Total Commitments then in effect or
$185,000,000."
(D) Section 2.7 of the Credit Agreement is hereby amended by inserting the
following clause (c) at the end thereof:
"(c) The Revolving Credit Commitments shall be automatically and
permanently reduced on the earlier to occur of:
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(x) the consummation of the AFI Transaction, in which case the
Revolving Credit Commitments shall be reduced by (i)
reducing the Revolving Credit Commitment of City National
Bank by $7,500,000 ($2,500,000 of which constitutes the
reduction referenced in Section 3 of Amendment No. 3 to this
Credit Agreement), (ii) reducing the Revolving Credit
Commitment of DeNationale Investeringsbank N.V. by
$5,000,000, (iii) reducing the Revolving Credit Commitment
of The Chase Manhattan Bank by $12,665,800.02, and (iv)
reducing the Revolving Credit Commitments of all Lenders in
accordance with their respective Percentages (after giving
effect to the reductions set forth in clauses (i), (ii) and
(iii) above) by an amount such that the Total Commitments
equal $165,000,000 after giving effect to such reduction;
(y) July 1, 2000, in which case the Revolving Credit Commitments
shall be reduced by (i) reducing the Revolving Credit
Commitment of The Chase Manhattan Bank by $12,665,800.02,
and (ii) reducing the Revolving Credit Commitments of all
Lenders in accordance with their respective Percentages
(with such Percentages determined after giving effect to the
reduction set forth in clause (i) above) by an amount such
that the Total Commitments equal $160,000,000 after giving
effect to such reduction.
Simultaneously with such reduction of the Revolving Credit
Commitments, the Borrower shall pay to the Administrative Agent, for
the benefit of each Lender whose Revolving Credit Commitment is
reduced in accordance with the preceding sentence, all accrued an
unpaid Commitment Fees on the amount of the Revolving Credit
Commitment of each such Lender so reduced through the date of such
reduction."
(E) Clause (i) of Section 7 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"(i) a Change on Control or a Change in Management shall occur;"
(F) The Schedule of Commitments appearing in Schedule 1 to the Credit
Agreement is hereby replaced in its entirety by Schedule 1 (Revised) attached to
this Amendment No. 4.
(G) Schedule 2.1 (Acceptable Obligors/Allowable Amounts) to the Credit
Agreement is hereby amended by adding the following Approved Account Debtors and
their respective Amounts:
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Name of Approved
Debtor Category Account Debtor Allowable Amount
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Foreign Account Debtor Egmont (Scandinavia) $1,000,000
Foreign Account Debtor Asmilk Corporation (Japan) $2,000,000
Foreign Account Debtor Highlight Video (Germany) $5,000,000
Foreign Account Debtor Laurenfilm S.A. (Spain) $1,000,000
Acceptable Domestic Account Pearson Television (Basic cable) $2,000,000
Debtor (Basic Cable)
(H) Schedule 2.1 (Acceptable Obligors/Allowable Amounts) to the Credit
Agreement is hereby further amended by increasing the Allowable Amount for the
following account debtors to the amounts set forth opposite such account
debtor's name below:
Name of Approved
Debtor Category Account Debtor Allowable Amount
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Acceptable Major Account Debtor 20th Century Fox Film Corporation $60,000,000 (but only
until 6/30/2000, at
which time the
Allowable Amount for
20th Century Fox
shall automatically
and permanently be
reduced to
$40,000,000)
Acceptable Domestic Account USA Networks/SciFi Channel $10,000,000
Debtor (Basic Cable)
Acceptable Domestic Account Comedy Central $ 1,000,000
Debtor (Basic Cable)
Acceptable Domestic Account Discovery Network $ 1,000,000
Debtor (Basic Cable)
Acceptable Domestic Account FX $25,000,000
Debtor (Basic Cable)
Acceptable Domestic Account Lifetime $ 1,000,000
Debtor (Basic Cable)
Acceptable Domestic Account Romance Classics $ 1,000,000
Debtor (Basic Cable)
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(I) Schedule 2.2 (Home Video Model) to the Credit Agreement is hereby
replaced in its entirety by Schedule 2.2 (Revised) attached to this Amendment
No. 4.
Section 3. Consent. The Borrower has requested that the Agent and
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the Lenders consent to a waiver of compliance by the Debtors with Section 6.13
of the Credit Agreement which prohibits the Credit Parties from modifying any
indenture or note purchase agreement governing the Secured Subordinated Notes.
At the request of the Borrower, each Lender by its signature hereto hereby
consents to the Credit Parties entering into Amendment No. 3 to the Note & Stock
Purchase Agreement dated as of July 9, 1997 between Canyon and the Credit
Parties, in the form attached hereto as Exhibit A.
The waiver contained in this Section 3 is limited to the specific
provision provided above and shall not in any way be construed as entitling the
Borrower to any waiver of any matters other than as specifically provided above
or to any future waivers regarding similar matters or otherwise.
Section 4. Increase in Commitments.
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(a) As of the Effective Date, the Total Commitments shall be
increased by $22,665,800.02, by (x) the addition of Far East National Bank ("Far
East"), as a party to this Credit Agreement, with a Total Commitment of
$10,000,000, and (y) a $12,665,800.02 increase in the Revolving Credit
Commitment of The Chase Manhattan Bank ("Chase"; and together with Far East, the
"Assuming Banks"). On or prior to the Effective Date, Far East shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assumption Agreement in the form of Exhibit B attached hereto. Upon such
execution, delivery, acceptance and recording, from and after the Effective
Date, Far East shall be a party to the Credit Agreement and shall have all of
the rights and obligations of a Lender thereunder.
(b) On the Effective Date, Far East shall purchase from Chase a
portion of its outstanding Term Loans such that after giving effect thereto Far
East and Chase will hold Term Loans in the amounts set forth on Schedule 1
(Revised) to this Amendment No. 4. Each Assuming Bank shall be deemed to have
irrevocably and unconditionally purchased and received from each of the other
Lenders (including, in the case of Far East, Chase) a participation in each
outstanding Letter of Credit such that after giving effect thereto, each of the
Lenders holds a participation in all outstanding Letters of Credit in proportion
with the Revolving Credit Commitments as set forth of Schedule 1 (Revised) to
this Amendment No. 4.
(c) For purposes of Section 2.10(b) of the Credit Agreement, the
reallocation of the Commitments set forth in clause (b) above shall be treated
as prepayments of the Loans and the Borrower shall be subject to reimbursement
obligations set forth in Section 2.10(b) for losses incurred by the Lenders in
the reemployment of any Eurodollar Loans affected by such reallocation.
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Section 5. Conditions to Effectiveness. The effectiveness of this
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Amendment is subject to the satisfaction in full of each of the conditions
precedent set forth in this Section 5 (the date on which all such conditions
have been satisfied being herein called the "Effective Date"):
(A) the Agent shall have received counterparts of this Amendment
which, when taken together, bear the signatures of the Borrower, each Guarantor,
the Agent and such of the Lenders as are required by the Credit Agreement;
(B) the Agent shall have received an Assumption Agreement (in form of
Exhibit B hereto), duly executed by Far East National Bank;
(C) the Agent shall have received a new Revolving Credit Note
executed by the Borrower for each of The Chase Manhattan Bank and Far East
National Bank in the face amount of such Lender's Revolving Credit Commitment
and a Term Note executed by Pictures for Far East National Bank in the face
amount of such Lender's Term Loan Commitment, in each case after giving effect
to this Amendment No. 4;
(D) all fees contemplated by the Fee Letter dated of even date
herewith between the Borrower and the Agent shall have been paid; and
(E) all legal matters incident to this Amendment shall be
satisfactory to Morgan, Lewis & Bockius LLP, counsel for the Agent.
Section 6. Representations and Warranties. Each Credit Party
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represents and warrants that:
(A) after giving effect to this Amendment, the representations and
warranties contained in the Credit Agreement are true and correct in all
material respects on and as of the date hereof as if such representations and
warranties had been made on and as of the date hereof (except to the extent that
any such representations and warranties specifically relate to an earlier date);
and
(B) after giving effect to this Amendment, no Event of Default or
Default will have occurred and be continuing on and as of the date hereof.
Section 7. Further Assurances. At any time and from time to time,
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upon the Agent's request and at the sole expense of the Credit Parties, each
Credit Party will promptly and duly execute and deliver any and all further
instruments and documents and take such further action as the Agent reasonably
deems necessary to effect the purposes of this Amendment.
Section 8. Fundamental Documents. This Amendment is designated a
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Fundamental Document by the Agent.
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Section 9. Full Force and Effect. Except as expressly amended
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hereby, the Credit Agreement and the other Fundamental Documents shall continue
in full force and effect in accordance with the provisions thereof on the date
hereof. As used in the Credit Agreement, the terms "Agreement", "this
Agreement", "herein", "hereafter", "hereto", "hereof", and words of similar
import, shall, unless the context otherwise requires, mean the Credit Agreement
as amended by this Amendment.
Section 10. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
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CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 11. Counterparts. This Amendment may be executed in two or
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more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one instrument.
Section 12. Expenses. The Borrower agrees to pay all out-of-pocket
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expenses incurred by the Agent in connection with the preparation, execution and
delivery of this Amendment, including, but not limited to, the reasonable fees
and disbursements of counsel for the Agent.
Section 13. Headings. The headings of this Amendment are for the
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purposes of reference only and shall not affect the construction of or be taken
into consideration in interpreting this Amendment
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IN WITNESS WHEREOF, the parties hereby have caused this Amendment to
be duly executed as of the date first written above.
ARTISAN PICTURES INC.
ARTISAN ENTERTAINMENT INC.
ARTISAN HOME ENTERTAINMENT INC.
ARTISAN RELEASING INC.
ARTISAN MUSIC INC.
BE MINE PRODUCTIONS, INC.
BEACH DANCE PRODUCTIONS, INC.
DETENTION PRODUCTIONS, INC.
HEATWAVE PRODUCTIONS, INC.
LIVE AMERICA INC.
LIVE VENTURES INC.
LIVENET INC.
MILK MISSION PRODUCTIONS INC.
SWEET TIME PRODUCTIONS, INC.
VESTRON INC.
WISH AGAIN PRODUCTIONS, INC.
By /s/ Ken Schapiro
---------------------------------
Name: Ken Schapiro
Title: Authorized Signatory for
each of the foregoing
FILM HOLDINGS CO.
By /s/ Geoff Rehnert
---------------------------------
Name: Geoff Rehnert
Title: Principal
SILENT DEVELOPMENT CORP.
TONGUE-TIED INC.
By /s/ Ken Schapiro
--------------------------------
Name: Ken Schapiro
Title: EVP
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LENDERS:
THE CHASE MANHATTAN BANK,
individually and as Administrative
Agent
By /s/ William E. Rottino
-----------------------------------
Name: William E. Rottino
Title: Vice President
SOCIETE GENERALE
By /s/ Brian McDonald
-----------------------------------
Name: Brian McDonald
Title: Vice President
UNION BANK OF CALIFORNIA
By /s/ Thomas P. Garry, Jr.
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Name: Thomas P. Garry, Jr.
Title: Vice President
COMERICA BANK -- CALIFORNIA
By /s/ Carmen Carpenter
-----------------------------------
Name: Carmen Carpenter
Title: VP
FLEET BANK, N.A.
By /s/ Eric S. Meyer
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Name: Eric S. Meyer
Title: Vice President
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PACIFIC CENTURY BANK, N.A.
By /s/ David K. Henry
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Name: David K. Henry
Title: Vice President
BANQUE INTERNATIONALE A
LUXEMBOURG
By /s/ E. Rolin
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Name: E. Rolin
Title: Senior Manager
By /s/ N. Weaver
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Name: N. Weaver
Title: Assistant Director
NATEXIS BANQUE BFCE
By /s/ Bennett C. Pozil
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Name: Bennett C. Pozil
Title: Vice President and Group Manager
Entertainment Finance
By /s/ Mark A. Harrington
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Name: Mark A. Harrington
Title: Senior Vice President and
Regional Manager
CITY NATIONAL BANK
By /s/ Norman B. Starr
---------------------------------
Name: Norman B. Starr
Title: Vice President
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DE NATIONALE INVESTERINGSBANK N.V.
By /s/ Eric H. Snaterse
------------------------------------
Name: Eric H. Snaterse
Title: Senior Vice President
By /s/ Joseph L. Piek
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Name: Joseph L. Piek
Title: V.P.
BANQUE NATIONALE DE PARIS
By /s/ Clive Bettles
------------------------------------
Name: Clive Bettles
Title: SVP and Manager
By /s/ Janice S.H. Ho
------------------------------------
Name: Janice S.H. Ho
Title: Vice President
THE FUJI BANK, LTD.
By /s/ Masahito Fukuda
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Name: Masahito Fukuda
Title: Senior Vice President
PARIBAS
By /s/ Thomas G. Brandt
------------------------------------
Name: Thomas G. Brandt
Title: Managing Director
By /s/ Ching Linn
------------------------------------
Name: Ching Lim
Title: Vice President
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FAR EAST NATIONAL BANK
By /s/ CHC
-----------------------------------
Name:
Title: R.V.P.
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Schedule 1
(Revised as of September 30, 1999)
Schedule of Commitments
Revolving Revolving Term Term
Total Credit Credit Loan Loan
Banks Commitment Commitment Percentage Commitment Percentage
1. Chase $ 32,907,904.02 $ 31,757,465.91 18.420521% $ 1,150,438.11 6.071763%
2. Societe Generale 17,350,374.86 15,401,504.57 8.933450% 1,948,870.29 10.285714%
3. Union Bank of California 17,350,374.86 15,401,504.57 8.933450% 1,948,870.29 10.285714%
4. Fleet Bank 17,350,374.86 15,401,504.57 8.933450% 1,948,870.29 10.285714%
5. Comerica Bank-California 14,458,645.71 12,834,587.14 7.444542% 1,624,058.57 8.571429%
6. Pacific Century Bank 14,458,645.71 12,834,587.14 7.444542% 1,624,058.57 8.571429%
7. Far East National Bank 10,000,000.00 8,876,756.09 5.148851% 1,123,243.91 5.928238%
8. Natexis Banque 9,639,097.14 8,556,391.43 4.963028% 1,082,705.71 5.714286%
9. BIL 9,639,097.14 8,556,391.43 4.963028% 1,082,705.71 5.714286%
10. De National Investeringsbank 9,639,097.14 8,556,391.43 4.963028% 1,082,705.71 5.714286%
11. Banque National de Paris 9,639,097.14 8,556,391.43 4.963028% 1,082,705.71 5.714286%
12. The Fuji Bank, Ltd. 9,639,097.14 8,556,391.43 4.963028% 1,082,705.71 5.714286%
13. Banque Paribas 9,639,097.14 8,556,391.43 4.963028% 1,082,705.71 5.714286%
14. City National Bank 9,639,097.14 8,556,391.43 4.963028% 1,082,705.71 5.714286%
TOTAL $191,350,000.00 $172,402,650.00 100% $18,947,350.00 100%
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Schedule 2.2
(Revised as of September 30, 1999)
Home Video Model
Box Office Gross Video Units Sell-Through Units
$0-3,000,000 50,000 0
3,000,001 - 5,000,000 75,000 0
5,000,001 - 10,000,000 100,000 900,000
10,000,001 - 15,000,000 125,000 1,300,000
15,000,001 - 20,000,000 150,000 1,300,000
20,000,001 - 25,000,000 175,000 1,700,000
25,000,001 - 30,000,000 200,000 1,700,000
30,000,001 - 40,000,000 225,000 1,700,000
40,000,001 - 50,000,000 250,000 2,100,000
50,000,001 - 70,000,000 300,000 2,800,000
70,000,001 - 100,000,000 350,000 2,800,000
*100,000,000 400,000 3,000,000
* = greater than
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EXHIBIT A
to Amendment No. 4
[Attach Amendment No. 3 to Canyon Note & Stock Purchase Agreement]
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