EXHIBIT 10.97
AMENDMENT NO. 3 (the "Amendment") dated as of December 31, 1998 to
the CREDIT, SECURITY, GUARANTY AND PLEDGE AGREEMENT, dated as of December 20,
1996 (as amended by Amendment No.1 dated as of June 30, 1997, Amendment No. 2
dated as of March 31, 1998 and the Waiver and Amendment dated as of February
20, 1997, and as further amended, supplemented or otherwise modified, renewed
or replaced from time to time, the "Credit Agreement"), among TRIMARK
PICTURES, INC., a California corporation, and TRIMARK TELEVISION, INC., a
Delaware corporation (each a "Borrower" and together, the "Borrowers"), the
Guarantors named herein, the Lenders referred to herein, THE CHASE MANHATTAN
BANK, a New York banking corporation, as Agent (the "Administrative Agent")
for the Lenders and THE CHASE MANHATTAN BANK as Fronting Bank (the "Fronting
Bank").
INTRODUCTORY STATEMENT
Pursuant to Section 2.6 of the Credit Agreement the
Borrower previously reduced the Total Commitments from $75,000,000 to
$65,000,000 effective as of January 12, 1999.
The Borrowers and the Guarantors have now requested that
the Lenders amend certain provisions of the Credit Agreement. The Lenders are
willing to comply with such request on the terms and subject to the
conditions hereinafter set forth.
Accordingly, the parties hereto hereby agree as follows:
Section 1. DEFINED TERMS. All capitalized terms not
otherwise defined in this Amendment are used herein as defined in the Credit
Agreement.
Section 2. AMENDMENT TO THE CREDIT AGREEMENT. Subject to
the satisfaction of the conditions in Section 3 hereof, the Credit Agreement
is hereby amended effective as of the date hereof (except that the amendments
set forth in paragraphs (a), (b), and (c) shall not take effect until
delivery of the Borrowing Base Certificate for March 31, 1999), as follows:
(a) Clause (v) of the "Borrowing Base" appearing in Article
1 of the Credit Agreement is hereby amended in its entirety to read as
follows:
"(v) Eligible Library Percentage of the Eligible
Library Amount; PLUS"
(b) The definition of "Eligible Library Amount" appearing
in Article 1 of the Credit Agreement is hereby amended in its entirety to
read as follows:
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EXHIBIT 10.97 (CONTINUED)
"ELIGIBLE LIBRARY AMOUNT" shall be equal to the sum of (i) the fair market
value of the library as determined by Ernst & Young in their report dated
December 14, 1998, as reduced from time to time to reflect decreases, if any,
in the remaining value of unsold library rights resulting from major library
deals during such interim period (e.g., any single agreement or series of
related agreements pertaining to the licensing, distribution or sale of
library product providing for aggregate payments (including reasonably
estimated contingent payments) to the Borrower or a Subsidiary in excess of
$3,000,000), plus (ii) with respect to each individual item of Product that
is not included in the Ernst & Young report which has a book value in excess
of $3,000,000, the inventory value of such item of Product (determined in
accordance with GAAP) net of Off Balance Sheet Receivables and deferred
revenue items relating to such picture; provided however that the Total
Eligible Library amount shall never be more than $ 48,500,000.
(c) Article 1 of the Credit Agreement is hereby amended
to insert the following definition in its proper
alphabetical location:
"ELIGIBLE LIBRARY PERCENTAGE." shall mean the percentages set forth below for
Borrowing Bases calculated as of the dates indicated.
(a) (b)
Date Eligible Library Percentage
----- ---------------------------
March 31, 1999 through September 29, 1999 50%
September 30, 1999 through March 30, 2000 40%
March 31, 2000 through September 29, 2000 30%
September 30, 2000 and thereafter 20%
(d) Section 2.6. of the Credit Agreement is hereby amended
to redesignate existing paragraph (b) as (c), and to insert a new paragraph
(b):(b) The Total Commitment shall be automatically and permanently reduced
on each of the dates set forth in column (a) below, to the amount set forth
in column (b) below:
(a) (b)
Date Total Commitment is Reduced To:
--------- -------------------------------
March 31, 1999 $ 60,000,000
January 31, 2000 $ 50,000,000
June 30, 2000 $ 40,000,000
(e) Section 3.6 (a) of the Credit Agreement is hereby amended to insert
September 30, 1998 in place of September 30, 1996.
(f) Section 6.5 of the Credit Agreement is hereby amended to insert
$50,000 for $750,000 in each place it appears.
(g) Section 6.15 of the Credit Agreement is hereby amended and restated
to read as follows:
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EXHIBIT 10.97 (CONTINUED)
"Section 6.15 UNRECOUPED PRINT AND ADVERTISING EXPENSES.
Permit Unrecouped Print and Advertising Expenses for any individual item of
Product to exceed $5,000,000 or permit the sum of Unrecouped Print and
Advertising Expenses, computed for each individual item of Product, to exceed
$15,000,000 in the aggregate at any time.
(h) Section 6.18 of the Credit Agreement is hereby amended and
restated to read as follows:
Section 6.18 CONSOLIDATED TANGIBLE NET WORTH RATIO Permit the ratio
of (i) the aggregate amount of all Indebtedness of the Parent and its
Consolidated Subsidiaries, consolidated in accordance with GAAP, plus 100% of
Product Acquisition Commitments of the Parent and its Consolidated
Subsidiaries, less the present value of related Off-Balance Sheet Receivables
(but not more than the related portion of Product Acquisition Commitments),
to (ii) Consolidated Tangible Net Worth to be greater than the ratio set
forth below during the period corresponding thereto:
Ratio Period
----- -------
4.75:1 December 31, 1998 to March 30, 1999
4.50:1 March 31, 1999 to June 29, 1999
4.25:1 June 30, 1999 to September 29, 1999
3.75:1 September 30, 1999 and thereafter
(i) Section 6.22(b) of the Credit Agreement is hereby amended and
restated to read as follows: (b) Produce or acquire any item of Product with
a Production Exposure in excess of (i) $10,000,000 per picture or (ii)
$3,000,000 net of related Off Balance Sheet Receivables relating to such item
of Product and that portion of production costs which third parties have
committed to fund on a cash flow basis.
(j) Section 6.22(d) of the Credit Agreement is hereby amended by
deleting the figure "$6,000,000" and inserting the figure "$5,000,000" in its
place.
(k) Schedule 2 to the Credit Agreement is hereby amended by adding
the following Acceptable Obligors and their respective Allowable Amounts:
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EXHIBIT 10.97 (CONTINUED)
Debtor Category Name of Approved Allowable Amount
--------------- Account Debtor ----------------
----------------
ACCEPTABLE MAJOR DOMESTIC
ACCOUNT DEBTORS
Acceptable Major Domestic NBC $5,000,000
Account Debtor (95%)
ACCEPTABLE FOREIGN ACCOUNT
DEBTORS
Acceptable Foreign Account Advance GMBH $600,000
Debtor (75%)
Acceptable Foreign Account BSKYB TV $1,000,000
Debtor (75%)
Acceptable Foreign Account Coyaba Corp. $ 300,000
Debtor (75%)
Acceptable Foreign Account Gala Films $800,000
Debtor (75%)
Acceptable Foreign Account Kassna Intl.Ltd. $600,000
Debtor (75%)
(l) Schedule 2 to the Credit Agreement is hereby further amended by increasing
the Allowable Amount for each Acceptable Obligor listed below to the amount
opposite its name set forth below:
Debtor Category Name of Approved Allowable Amount
--------------- Account Debtor ----------------
----------------
ACCEPTABLE MAJOR
DOMESTIC ACCOUNT DEBTORS
Acceptable Major Domestic Disney $5,000,000
Account Debtor (95%) (Including Affiliates)
Acceptable Major Domestic CBS $5,000,000
Account Debtor (95%)
ACCEPTABLE FOREIGN ACCOUNT
DEBTORS
Acceptable Foreign Account Andrea Leone $700,000
Debtor (75%)
Acceptable Foreign Account BMG $500,000
Debtor (75%)
Acceptable Foreign Account Foxton Entertainment $1,500,000
Debtor (75%)
Acceptable Foreign Account Pony Canyon $1,000,000
Debtor (75%)
Acceptable Foreign Account Taurus Film $2,000,000
Debtor
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EXHIBIT 10.97 (CONTINUED)
(m) Schedule 2 to the Credit Agreement is hereby further amended to
increase the Acceptable Foreign Basket Limit from $5,000,000 to $7,500,000.
Section 3. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment is subject to the satisfaction in full of the following conditions
precedent.
1.The Administrative Agent shall have received executed counterparts of
this Amendment, which, when taken together, bear the signatures of each party
hereto;
(b) The Agent shall have received the library valuation report of Ernst
& Young referred to in the definition of Eligible Library Amount.
(c) All legal matters in connection with this Amendment shall be
reasonably satisfactory to Morgan, Lewis & Bockius LLP, counsel for the
Administrative Agent.
Section 4. REPRESENTATIONS AND WARRANTIES. Each of the Credit Parties
hereby represents, warrants and acknowledges to the Administrative Agent (on
behalf of itself, Fronting Bank and the Lenders) that:
1.Their respective obligations to the Lenders under the Credit Agreement
remain in full force and effect.
1.The representations and warranties contained in the Credit Agreement
and in the other Fundamental Documents 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
such representations and warranties expressly relate to an earlier date).
2.After giving effect hereto, each of the Credit Parties is in
compliance with all the terms and provisions set forth in the Credit
Agreement and the other Fundamental Documents and no Default or Event of
Default has occurred or is continuing under the Credit Agreement or any other
Fundamental Document.
3.The acknowledgments, representations and warranties in this Section 4
have been a material inducement for the Lenders to agree to enter into this
Amendment, (ii) the Lenders are relying on such acknowledgments,
representations and warranties, and (iii) the Lenders would not have entered
into this Amendment without such acknowledgments, representations and
warranties.
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EXHIBIT 10.97 (CONTINUED)
Section 5. FULL FORCE AND EFFECT. Except as expressly set forth
herein, this Amendment does not constitute a waiver or modification of any
provision of the Credit Agreement or a waiver of any Default or Event of
Default under the Credit Agreement, in either case whether or not known to
the Lenders. Except as expressly amended hereby, the Credit Agreement shall
continue in full force and effect in accordance with the provisions thereof
on the date hereof. As used herein, the terms "Credit 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. References to the terms "Agreement"
or "Credit Agreement" appearing in the Exhibits or Schedules hereto or to the
Credit Agreement, shall, unless the context otherwise requires, mean the
Credit Agreement as amended by this Amendment.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WHICH ARE
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED WHOLLY WITHIN THE STATE OF
NEW YORK.
Section 7. COUNTERPARTS. This Amendment may be executed in two or
more counterparts, each of which shall constitute as an original, but all of
which when taken together shall constitute but one instrument.
Section 8. EXPENSES. The Borrowers agree to pay all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection
with the preparation, execution, delivery, performance or enforcement of this
Amendment, the Credit Agreement or the other Fundamental Documents and any
other documentation contemplated hereby or thereby, including, but not
limited to, the reasonable fees and disbursements of external legal counsel
for the Administrative Agent and the allocated costs and charges of its
internal legal counsel.
Section 9. HEADINGS. The headings of this Amendment are for the
purposes of reference only and shall not affect the construction of, or be
taken into consideration in interpreting, this Amendment.
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EXHIBIT 10.97 (CONTINUED)
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their duly authorized officers, all as of the date and
year first written above.
TRIMARK PICTURES, INC.
TRIMARK TELEVISION, INC.
TRIMARK HOLDINGS, INC.
TRIMARK MUSIC
CHEAP DATE, INC.
WRITERS ON THE WAVE
PURPLE TREE PRODUCTIONS, INC.
LOVING GUN PRODUCTIONS, INC.
TRIMARK INTERACTIVE
By /s/
-----------------------------------
Name:
Title: Authorized Signatory for
each of the foregoing
THE CHASE MANHATTAN BANK,
individually and as Administrative Agent
By: /s/
-----------------------------------
Name:
Title:
CITY NATIONAL BANK
By: /s/
-----------------------------------
Name:
Title:
COMERICA BANK-CALIFORNIA
By: /s/
-----------------------------------
Name:
Title:
FIRST HAWAIIAN BANK
By: /s/
-----------------------------------
Name:
Title:
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EXHIBIT 10.97 (CONTINUED)
IMPERIAL BANK
By: /s/
-----------------------------------
Name:
Title:
SILICON VALLEY BANK
By: /s/
-----------------------------------
Name:
Title:
THE SUMITOMO TRUST & BANKING CO.,LTD.,
NEW YORK BRANCH
By: /s/
-----------------------------------
Name:
Title:
UNION BANK OF CALIFORNIA
By: /s/
-----------------------------------
Name:
Title:
DE NATIONALE INVESTERINGSBANK N.V.
By: /s/
-----------------------------------
Name:
Title:
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