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EXHIBIT 10.64
AMENDMENT NO. 7 dated as of December ___, 1998 to
the Credit, Security, Guaranty and Pledge Agreement
dated as of June 19, 1996, as amended, among THE
XXXXXXX-XXXXX COMPANY (the "Borrower"), the
Guarantors named therein, the Lenders referred to
therein and THE CHASE MANHATTAN BANK (formerly
known as Chemical Bank), as Agent and as Fronting
Bank for the Lenders (the "Agent") (as heretofore
amended, the "Credit Agreement").
INTRODUCTORY STATEMENT
The Lenders have made available to the Borrower a revolving credit facility
pursuant to the terms of the Credit Agreement.
The Borrower has requested certain modifications to the Credit Agreement as
hereinafter set forth.
The Borrower, the Guarantors, the Lenders and the Agent have agreed to make
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:
Section 1. Defined Terms. Capitalized terms used herein and not otherwise
defined herein shall have the meaning given them in the Credit Agreement.
Section 2. Amendments to the Credit Agreement. Subject to the satisfaction of
the conditions precedent set forth in Section 3 hereof, the Credit Agreement is
hereby amended effective as of the Amendment Effective Date or the Library
Credit Effective Date, as the case may be (such terms being used herein as
defined in Section 3 hereof) as follows:
(A) Article 1 of the Credit Agreement is hereby amended by adding the following
definitions in the appropriate alphabetical sequence:
"Off-Balance Sheet Commitments" shall mean all binding commitments of the Credit
Parties for the acquisition of items of Product, including cash flow
commitments, negative pick-up obligations and print and advertising commitments
which are not, pursuant to GAAP, reflected on the Consolidated balance sheet of
the Borrower, both conditional and unconditional.
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"Off-Balance Sheet Receivables" shall mean all amounts contractually owed to any
Credit Party under Distribution Agreements for any item of Product, which
amounts are not, pursuant to GAAP, reflected on the Consolidated balance sheet
of the Borrower.
(B) The definition of "Consolidated Capital Base" appearing in Article 1 of the
Credit Agreement is hereby amended by adding the following proviso at the end
thereof:
"; provided that for purposes of determining compliance with Section 6.18 (Total
Unsubordinated Liabilities to Consolidated Capital Base Ratio) hereof, the
amount of any Investment in US-SEARCH by a Credit Party shall be deducted from
Stockholders' Equity."
(C) The definitions of "Consolidated", "Consolidated Subsidiaries", "EBIT" and
"Total Unsubordinated Liabilities" appearing in Article 1 of the Credit
Agreement are each hereby amended by adding the parenthetical "(other than
US-SEARCH)" after the word "Subsidiaries" appearing each time therein.
(D) The definition of "Subordinated Debt" appearing in Article 1 of the Credit
Agreement is hereby amended by adding the parenthetical "(other than US-SEARCH)"
after the words "Credit Parties" appearing therein.
(E) The definition of "Tier 1 Borrowing Base" appearing in Article 1 of the
Credit Agreement is hereby amended by adding the following proviso immediately
following clause (vii) appearing therein:
"; provided, however, that the Tier 1 Borrowing Base credit attributable to
Eligible Receivables from obligors whose principal place of business is located
in a Latin American country (other than Major Foreign Account Debtors) shall not
exceed the lesser of (x) $10,000,000 in the aggregate and (y) twenty-five
percent (25%) of the total Borrowing Base."
(F) Section 6.3 of the Credit Agreement is hereby amended by deleting clause (v)
in its entirety and inserting in lieu thereof the phrase "Intentionally
Omitted".
(G) Section 6.3 of the Credit Agreement is hereby further amended by (i)
amending clause (vi) in its entirety to read as follows and (ii) adding the
following clause (vii) at the end of such amended clause (vi):
"(vi) Guarantees by the Borrower or a Guarantor of the obligations of another
Guarantor (other than US-SEARCH), and (vii) the following Guarantees by the
Borrower of certain obligations of US-SEARCH, each in an amount not to exceed
the amounts set forth below:
(1) Guaranty of a line of credit from Comerica Bank in an amount not to exceed
$345,000; (2) Guaranty of loan from Xxxx Xxxx in an amount not to exceed
$68,000; (3) Guaranty of the media buying obligation of US-SEARCH in favor of
PIC-TV in an amount not to exceed $487,000; (4) Guaranty of the media buying
obligation of US-
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SEARCH in favor of Xxxxxx X. Xxxxx & Co. in an amount not to exceed $349,859;
and (5) Guaranty of payment obligations of US-SEARCH to INFOSPACE, Inc. pursuant
to that certain Amended and Restated Content Provider Agreement made as of
August 24, 1998, effective as of April 25, 1998 among INFOSPACE, Inc., US-SEARCH
and the Borrower."
(H) Section 6.4 of the Credit Agreement is hereby amended by adding the
following clauses (x), (xi) and (xii) at the end thereof:
"(x) a loan to US-SEARCH by the Borrower in an amount not to exceed the net
proceeds received by the Borrower in connection with the proposed $5,000,000
private placement offering of the common stock of the Borrower organized by
Xxxxx & Company Incorporated (the "US-SEARCH Offering"), (xi) other equity
investments in or loans to US-SEARCH by the Borrower (other than the investment
of the proceeds of the US-SEARCH Offering) in an amount not to exceed $1,000,000
in the aggregate; and (xii) deferments of management fees payable to the
Borrower by US-SEARCH."
(I) Section 6.7 of the Credit Agreement is hereby amended by deleting the
exception appearing as the last clause of such section and replacing such
exception with the following language:
"except that a Credit Party may merge with and into another Credit Party or with
and into the Borrower".
(J) Section 6.17 of the Credit Agreement is hereby amended by (i) inserting the
parenthetical "(excluding expenses attributable to US-SEARCH)" immediately after
the words "overhead expenses" appearing therein and (ii) deleting the amount
"$9,500,000" with respect to fiscal year 1998 and inserting in lieu thereof the
amount "$10,000,000".
(K) Section 6.18 of the Credit Agreement is hereby amended in its entirety to
read as follows:
"Section 6.18. Total Unsubordinated Liabilities to Consolidated Capital Base
Ratio. At any time during the periods indicated below, permit the ratio of Total
Unsubordinated Liabilities plus Off-Balance Sheet Commitments less all
Off-Balance Sheet Receivables and Borrowing Base credits that relate to items of
Product that are the subject of Off-Balance Sheet Commitments (but not more with
respect to any particular item of Product than the related amount of Off-Balance
Sheet Commitments) to Consolidated Capital Base to exceed the corresponding
ratio set forth below:
Period Ratio
------ -----
Closing Date through 9/29/98 2.00 to 1
9/30/98 through 9/29/99 2.75 to 1
9/30/99 and thereafter 2.00 to 1
(L) The Credit Agreement is hereby amended by adding the following Section 13.17
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immediately following Section 13.16 appearing therein:
"Section 13.17. Increase in Commitments. \(a) After the date hereof, the amount
of the Commitments may be increased by additional financial institutions (each
an "Assuming Bank"), approved in writing by the Agent and the Borrower, each
such Assuming Bank to become a party to this Credit Agreement by executing and
delivering to the Agent, for its acceptance and recording in the Register, an
Assumption Agreement in the form of Exhibit M attached hereto; provided,
however, that no further Assumption Agreement will be permitted which would
result in the aggregate amount of the Commitments hereunder (without giving
effect to any optional or mandatory reduction of Commitments pursuant to Section
2.6 hereof) to exceed $75,000,000. Subject to Section 2.9(b), upon such
execution, delivery, acceptance and recording, (x) from and after the effective
date specified in each Assumption Agreement (each, an "Effective Date"), which
effective date shall not be earlier than 5 Business Days after the date of
acceptance and recording by the Agent, the Assuming Bank thereunder shall be a
party hereto and shall have all of the rights and obligations of a Lender
hereunder, (y) on such Effective Date, the Assuming Bank shall purchase from
each of the other Lenders a portion of their outstanding Loans such that after
giving effect thereto each of the Lenders will hold its proportionate share of
all outstanding Loans in accordance with the Commitments then in effect and (z)
the Assuming Bank shall be deemed to have irrevocably and unconditionally
purchased and received from each of the other Lenders 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 Commitments then in effect.
(b) As of such Effective Date, additional Loans made on or after the
effectiveness thereof shall be made by the Lenders pro rata based on the
Commitment Percentages in effect on and after such Effective Date.
(c) Within five (5) Business Days after the applicable Effective Date, the
Borrower, at its own expense, shall execute and deliver to the Assuming Bank a
Note to the order of such Assuming Bank in an amount equal to the Commitment
assumed by it pursuant to such Assumption Agreement."
(M) Schedule 1 to the Credit Agreement is hereby amended in its entirety and
replaced by Schedule 1 attached hereto.
(N) Schedule 2 to the Credit Agreement is hereby amended by adding the following
Approved Account Debtors and their respective Allowable Amounts:
Name of Approved
Debtor Category Account Debtor Allowable Amount
--------------- ---------------- ----------------
MAJOR DOMESTIC ACCOUNT
DEBTORS
Major Domestic Account Blockbuster Video Unlimited
Debtor (95%)
ACCEPTABLE DOMESTIC ACCOUNT
DEBTORS
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Acceptable Domestic Account Behaviour Communications $ 750,000
Debtor (85%)
Acceptable Domestic Account Xxxxxxx Hills $ 500,000
Debtor (85%) Entertainment
Acceptable Domestic Account Bonneville (BWE $1,000,000
Debtor (85%) Distribution)
Acceptable Domestic Account Destination Films $1,000,000
Debtor (85%)
Acceptable Domestic Account Echostar $2,000,000
Debtor (85%)
Acceptable Domestic Account Hollywood Video $1,000,000
Debtor (85%)
Acceptable Domestic Account HSX Films / Ignite $ 750,000
Debtor (85%) Entertainment
Acceptable Domestic Account Xxxxxx Communications $1,500,000
Debtor (85%)
Acceptable Domestic Account Rhino Films $1,000,000
Debtor (85%)
Acceptable Domestic Account Seagull Communications $ 750,000
Debtor (85%)
Acceptable Domestic Account Unapix $ 750,000
Debtor (85%)
Acceptable Domestic Account Telemundo $1,000,000
Debtor (85%)
Acceptable Domestic Account Television Film $ 250,000
Debtor (85%) Distributors
Acceptable Domestic Account York Home Video $ 350,000
Debtor (85%)
MAJOR FOREIGN ACCOUNT
DEBTORS
Major Foreign Account Caracol Television $2,000,000
Debtor (85%)
Major Foreign Account Entertainment Film $1,000,000
Debtor (85%) Distributors
Major Foreign Account Globo Organization $3,000,000
Debtor (85%)
Major Foreign Account Grupo Televisa $2,000,000
Debtor (85%)
Major Foreign Account Metropole Television(M6) $ 750,000
Debtor (85%)
Major Foreign Account Nine Network $ 500,000
Debtor (85%)
Major Foreign Account TV Azteca $2,000,000
Debtor (85%)
Major Foreign Account Village Roadshow $1,000,000
Debtor (85%)
ACCEPTABLE FOREIGN ACCOUNT
DEBTORS (COUNTRY LIST A)
Acceptable Foreign Account AB SAT $1,500,000
Debtor (Country List A)
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(80%)
Acceptable Foreign Account Xxxxxx Xxxxx $ 750,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Audiovisual $ 250,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Channel 4 TV $ 500,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Chilevision $1,000,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Comerex S.A. $2,000,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Xxxxx $ 500,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Diprom $ 500,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Fab Films $ 750,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account First Independent $1,500,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Galfin $ 750,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Grupo Video Visa $ 750,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Injuca Investment $ 250,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Megalis $ 750,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Multivision $2,000,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Patagonia Export Co. $ 250,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Play Arte $ 500,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Quality Films $2,000,000
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Debtor (Country List A)
(80%)
Acceptable Foreign Account Xxxx & Xxxxxx $ 500,000
Debtor (Country List A)
(80%)
Acceptable Foreign Account Sogedasa $1,500,000
Debtor (Country List A)
(80%)
ACCEPTABLE FOREIGN ACCOUNT
DEBTORS (COUNTRY LIST B)
Acceptable Foreign Account Delta Video $ 250,000
Debtor (Country List B)
(50%)
Acceptable Foreign Account Ecuavisa $ 250,000
Debtor (Country List B)
(50%)
Acceptable Foreign Account Foxtel Management $ 500,000
Debtor (Country List B)
(50%)
Acceptable Foreign Account Medyavizyon $ 150,000
Debtor (Country List B)
(50%)
Acceptable Foreign Account Ovo/VA Films $ 250,000
Debtor (Country List B)
(50%)
Acceptable Foreign Account Swen $ 750,000
Debtor (Country List B)
(50%)
Acceptable Foreign Account Venavision $ 250,000
Debtor (Country List B)
(50%)
(O) Schedule 2 to the Credit Agreement is hereby further amended by moving the
following Approved Account Debtors to the debtor category indicated below, and
in the case of Cinecanal, increasing the Allowable Amount to the amount set
forth below:
Name of Approved New Debtor Allowable
Account Debtor Old Debtor Category Category Amount
---------------- ------------------- ---------- -----------
Direct TV Acceptable Domestic Major Domestic unlimited
Account Debtor (85%) Account Debtor
(95%)
Cinecanal Acceptable Foreign Major Domestic $2,000,000
Account Debtor Account Debtor
(Country List B) (95%)
(50%)
(P) Schedule 2 to the Credit Agreement is hereby further amended by increasing
the Allowable Amount for each account debtor listed below to the amount opposite
its name set forth below:
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Debtor Category Approved Account Debtor Allowable Amount
-------------- ---------------------- ----------------
Acceptable Domestic Account USA Network $1,500,000
Debtor (85%)
Acceptable Domestic Account New City Releasing $1,500,000
Debtor (85%)
Acceptable Foreign Account RCV 2001 $5,000,000
Debtor (Country List A)
(80%)
(Q) Schedule 3 to the Credit Agreement is hereby amended by (i) moving Chile,
Mexico and Brazil from Country List B to Country List A and (ii) adding
Argentina as an Approved Country on Country List A.
(R) The definition of "Tier 2 Borrowing Base" appearing in Article 1 of the
Credit Agreement is hereby amended by deleting the words "thirty-five percent
(35%)" and inserting in lieu thereof the words "forty percent (40%)".
Section 3. Conditions to Effectiveness. This Amendment is effective (i) with
respect to each clause set forth in Section 2 above (other than clause (R)), as
of the first date on which all of the following conditions precedent have been
satisfied in full (the "Amendment Effective Date") and (ii) with respect to
clause (R) set forth in Section 2 above, the later to occur of (x) the Amendment
Effective Date and (y) the date on which all of the Lenders have approved the
1998 valuation of the Eligible Library Amount (the "Library Credit 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; and
(B) all legal matters incident to this Amendment shall be satisfactory to
Xxxxxx, Xxxxx & Bockius LLP, counsel for the Agent.
Section 4. Representations and Warranties. Each Credit Party 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 5. Further Assurances. At any time and from time to time, upon the
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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 6. Fundamental Documents. This Amendment is designated a Fundamental
Document by the Agent.
Section 7. Full Force and Effect. Except as expressly amended 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 8. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 9. Counterparts. This Amendment may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute but one instrument.
Section 10. Expenses. The Borrower agrees to pay all out-of-pocket 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 11. 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
IN WITNESS WHEREOF, the parties hereby have caused this Amendment to be
duly executed as of the date first written above.
BORROWER:
THE XXXXXXX-XXXXX COMPANY
By: /S/ XXXXX ST.J XXXXXXXXX
--------------------------
Name:
Title:
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GUARANTORS:
KL PRODUCTIONS, INC.
KL INTERNATIONAL, INC.
ACME PRODUCTIONS, INC.
XXXXXXX-XXXXX PRODUCTIONS, INC.
THE RELATIVES COMPANY
POST AND PRODUCTION SERVICES, INC.
L-K ENTERTAINMENT, INC.
INTERNATIONAL COURTROOM NEWS SERVICE
FAMILY PICTURES, INC.
TROPICAL HEAT, INC.
KL SYNDICATION, INC.
ANDRE PRODUCTIONS, INC.
TKLC NO. 2, INC.
TWILIGHT ENTERTAINMENT, INC.
KLC FILMS, INC.
KL FEATURES, INC.
KLF GUILD CO.
KLF DEVELOPMENT CO.
KLTV GUILD CO.
KLTV DEVELOPMENT CO.
XXXXXXX-XXXXX INTERNATIONAL, INC.
KL INTERACTIVE MEDIA, INC.
DAYTON WAY PICTURES, INC.
DAYTON WAY PICTURES II, INC.
DAYTON WAY PICTURES III, INC.
DAYTON WAY PICTURES IV, INC.
FW COLD CO., INC.
By /S/ XXXXX ST.J XXXXXXXXX
------------------------
Name:
Title:
800-U.S. SEARCH
By /S/ XXXXXX XXXXXXX
------------------
Name:
Title:
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KLC/NEW CITY
By its General Partner
THE XXXXXXX-XXXXX COMPANY
By /S/ XXXXX ST.J XXXXXXXXX
-------------------------
Name:
Title:
LENDERS:
Executed in THE CHASE MANHATTAN BANK
(formerly known as Chemical Bank), as Agent
New York, New York On
_____________, 1998
By /S/ XXXX X. XXXXXXXXX
-------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
DE NATIONALE INVESTERINGSBANK N.V.
By /S/ XXXX X. XXXXXXXX
-------------------------
Name: Xxxx X. Xxxxxxxx
Title: Senior Vice President
By /S/ X. XXXXXXX
-------------------------
Name: X. Xxxxxxx
Title: V.P.
COMERICA BANK -- CALIFORNIA
By /S/ D. XXXXXXX XXXXXXX
-------------------------
Name: D. Xxxxxxx Xxxxxxx
Title: Vice President
Schedule 1 (Revised as of December ___, 1998)
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Schedule of Commitments
Lender Commitment
------ ----------
The Chase Manhattan Bank $35,000,000
DeNationale Investeringsbank N.V. $15,000,000
Comerica Bank -- California $13,000,000
Total Commitments $63,000,000
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EXHIBIT M
Form of Assumption Agreement
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