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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 31, 1994
SPELLING ENTERTAINMENT GROUP INC.
(Exact name of registrant as specified in its charter)
Florida
(State or other jurisdiction of incorporation)
1-6739 59-0862100
(Commission (IRS Employer
File Number) Identification No.)
200 South Andrews Avenue
Fort Lauderdale, FL 33301
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (305) 832-3000
N.A.
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
Effective January 31, 1994, Spelling Entertainment Group Inc. (the
"Registrant") and certain subsidiaries of the Registrant entered into a Credit
Agreement (the "Credit Agreement") with Blockbuster Entertainment Corporation
("Blockbuster") pursuant to which Blockbuster has agreed to advance to the
Registrant and/or certain subsidiaries of the Registrant an aggregate of
$175,000,000, consisting of revolving loans in an aggregate principal amount of
$75,000,000 (the "Revolving Loans") and a term loan in the amount of
$100,000,000 (the "Term Loan"). The Registrant and certain of its subsidiaries
also entered into a Pledge and Security Agreement dated as of January 31, 1994
(the "Security Agreement") with Blockbuster and a Copyright Mortgage and
Assignment; Power of Attorney (the "Assignment") and a Guaranty (the
"Guaranty"), each dated as of January 31, 1994 and each in favor of
Blockbuster. On December 22, 1993, the Registrant entered into a related
Guaranty (the "Spelling Guaranty") in favor of Bank of America National Trust
and Savings Association, as agent.
Under the Credit Agreement, Blockbuster is obligated to make Revolving
Loans to the Registrant for a term of 38 months. Outstanding amounts under the
Revolving Loans, if any, and under the Term Loan, if any, will become payable
on March 31, 1997.
As previously reported in its Current Report on Form 8-K dated
December 8, 1993, on December 8, 1993, the Registrant entered into an Agreement
and Plan of Merger (the "Merger Agreement") with Republic Pictures Corporation
("Republic") and DE Acquisition Corporation, a wholly-owned subsidiary of the
Registrant ("Merger Sub"), which provides for the merger of Merger Sub with and
into Republic (the "Merger"). The Merger Agreement provides, among other
things, that, at the effective time of the Merger, each share of common stock,
$0.01 par value per share, of Republic outstanding immediately prior to the
effective time of the Merger will be, without any action on the part of the
holder thereof, converted into the right to receive $13.00 in cash, without
interest (the "Cash Merger Consideration"). The proceeds of the Term Loan may
be used only to pay all or a portion of the Cash Merger Consideration. The
closing of the Merger is currently anticipated to occur in early 1994.
Pursuant to the Security Agreement and the Assignment, borrowings
under the Credit Agreement are secured by all of the assets (tangible and
intangible) of the Registrant and its subsidiaries. Pursuant to the Guaranty,
the Registrant and certain of the Registrant's subsidiaries have guaranteed the
amounts borrowed, if any, under the Credit Agreement.
Pursuant to the Spelling Guaranty, the Registrant has agreed to
guarantee the obligations of Blockbuster under Blockbuster's credit facility
(the "Blockbuster Credit Facility") up to the amount of the Registrant's
borrowings under the Credit Agreement outstanding at the time enforcement of
the Spelling Guaranty is sought.
The Credit Agreement includes customary provisions defining what
constitutes default by the Registrant and its subsidiaries, including failure to
pay any principal, interest or other amount due to Blockbuster as such becomes
due; failure to pay other indebtedness when due; judgments, attachments,
dissolution, receivership, insolvency and bankruptcy. A default shall also occur
under the Credit Agreement if (i) Blockbuster and its affiliates cease to
beneficially own and control a majority of the issued and outstanding voting
stock of the Registrant or (ii) Blockbuster fails to make any payment when due
in respect of or should otherwise be in breach or default of (in each case,
after giving effect to any applicable grace period) the Blockbuster Credit
Facility. In the latter case, Blockbuster may not declare unpaid borrowings
under the Credit Agreement to be immediately due and payable until such time, if
ever, that indebtedness under the Blockbuster Credit Facility has been
accelerated.
If, prior to March 31, 1997, the Blockbuster Credit Facility is
terminated, repaid or restructured (other than due to acceleration of
Blockbuster's obligations thereunder) so as to result in an increased cost of
funds to Blockbuster, then the Credit Agreement requires Blockbuster and the
Registrant and its subsidiaries to negotiate in good faith for up to 120 days
thereafter to reset the interest rates and fees applicable to the Revolving
Loans in order to take into account Blockbuster's increased cost of funds.
As of January 31, 1994, Blockbuster beneficially owned approximately
70.5% of the outstanding common stock, $0.10 par value per share, of the
Registrant. The Registrant believes that the terms of the Credit Agreement,
the Security Agreement, the Assignment, the
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Guaranty, and the Spelling Guaranty are as favorable to the Registrant as those
which could be obtained from an unaffiliated party.
The descriptions contained herein of the Credit Agreement, the
Security Agreement, the Assignment, the Guaranty and the Spelling Guaranty are
modified in their entirety by the terms of such agreements, copies of which are
attached hereto as Exhibits 99.1, 99.2, 99.3, 99.4 and 99.5, respectively, and
which are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The Exhibits to this Report are listed in the Exhibit Index set forth
elsewhere herein.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SPELLING ENTERTAINMENT GROUP INC.
By: /s/ Thomas P. Carson
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Thomas P. Carson
Senior Vice President, Treasurer and
Chief Financial Officer
Date: February 16, 1994
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SPELLING ENTERTAINMENT GROUP INC.
EXHIBIT INDEX
Number and Sequential
Description of Exhibit Page Number
---------------------- -----------
1. None
2. None
4. None
16. None
17. None
20. None
23. None
24. None
27. None
99.1 Credit Agreement dated as of January 31, 1994, by and among the
Registrant, certain subsidiaries of the Registrant and Blockbuster
Entertainment Corporation.
99.2 Pledge and Security Agreement dated as of January 31, 1994, by and
among the Registrant, certain subsidiaries of the Registrant and
Blockbuster Entertainment Corporation.
99.3 Copyright Mortgage and Assignment; Power of Attorney dated as of
January 31, 1994, by the Registrant and certain subsidiaries of
the Registrant in favor of Blockbuster Entertainment Corporation.
99.4 Guaranty dated as of January 31, 1994, by the Registrant and certain
subsidiaries of the Registrant in favor of Blockbuster Entertainment
Corporation.
99.5 Guaranty dated as of December 22, 1993 by the Registrant in favor of
Bank of America National Trust and Savings Association, as agent.