Exhibit 10.65
AMENDATORY AGREEMENT
AMENDATORY AGREEMENT (the "Amendatory Agreement") dated as of August
14, 1995 between XXXXX PAY-PER-VIEW, INC., a Delaware corporation ("Borrower")
and MIDLANTIC BANK, N.A., a national banking association (the "Bank").
RECITALS:
A. Borrower and the Bank are parties to an Amended and Restated Loan
and Security Agreement dated as of December 9, 1994 (the "Loan Agreement") which
provides for a term loan in the amount of $900,000 and a revolving credit loan
in the maximum amount of $9,000,000.
B. Borrower has requested, and the Bank is willing to increase the
revolving credit loan up to a maximum amount of $15,000,000, in order to
accommodate Borrower's working capital needs.
C. The parties have agreed to amend the Loan Agreement for the
purpose of affecting the foregoing and to provide for the grant of additional
collateral to the Bank.
NOW, THEREFORE, in consideration of the foregoing, and the mutual
agreements contained herein, the parties hereby agree as follows:
1. DEFINED TERMS.
(a) Capitalized terms used in this Amendatory Agreement without
definition shall have the respective meanings assigned to such terms in the Loan
Agreement, as amended hereby.
(b) A new defined term is added to the Loan Agreement as follows:
"'HOME VIDEO CHANNEL SECURITY DOCUMENTS' shall mean all agreements
and instruments deemed necessary and appropriate by the Bank for
execution and delivery by Home Video Channel for the purpose of
Home Video Channel guarantying the payment and performance of the
Obligations and granting to the Bank a security interest in its
assets."
(c) Certain defined terms in the Loan Agreement are amended and
restated as follows:
"'COPYRIGHT SECURITY AGREEMENT' shall mean a Copyright Security
Agreement of the Obligor thereto executed and delivered on the
Closing Date, the Restatement Closing Date, or subsequent thereto
as
contemplated by Section 9.10, as any of the same may be amended,
modified or supplemented from time to time."
"'OBLIGOR' shall mean each of Borrower, Spice, Inc., a New York
corporation ("Spice"), Cable Video Store, Inc., a Delaware corporation
("Video Store"), Xxxxx Marketing Corporation, Inc., a Delaware
corporation ("Xxxxx Marketing"), CPV Productions, Inc., a Delaware
corporation ("CPV"), Pay-Per-View International, Inc., a Delaware
corporation ("PPV International"), Guest Cinema, Inc., a Delaware
corporation ("Guest Cinema"), Cyberspice, Inc., a Delaware corporation
("Cyberspice"), Media licensing, Inc., a Nevada corporation ("Media
Licensing"), Magic Hour Pictures, Inc., a California corporation,
formerly Magic Hour Productions, Inc. ("Magic Hour"), American Gaming
Network, Inc., a Delaware corporation, ("American Gaming"), American
Interactive Games, Inc., a Delaware Corporation ("American
Interactive") and, after the execution and delivery of the Home Video
Channel Security Documents, Home Video Channel."
"'PLEDGED INTERESTS' shall mean all the issued and outstanding capital
stock of the Obligors (other than Borrower) and, upon Home Video
Channel becoming an Obligor, Borrower's indirect ownership interest in
Danish Satellite Television, Ltd.'
"'SECURITY DOCUMENTS' shall mean the Guaranty and Security Agreement,
the Pledge Agreement, each Trademark Assignment, each Copyright
Security Agreement, the Patent Assignment and the Home Video Channel
Security Documents."
"'TERMINATION DATE' shall mean December 31, 1996."
(d) All references in the Loan Agreement to Obligors shall give effect
to such term after the amendment made hereby.
2. REGARDING THE REVOLVING CREDIT LOAN.
(a) Section 3.1 of the Loan Agreement is amended and restated in its
entirety as follows:
"3.1. REVOLVING CREDIT ADVANCES. (a) Upon and subject to the terms and
conditions hereof, the Bank agrees to make available, at any time and
from time to time, until the Termination Date, for Borrower's use and
upon the request of Borrower therefor, advances (each, a "Revolving
Credit Advance"); provided, however, that after giving effect to
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each requested Revolving Credit Advance, until Borrower complies with
the provisions of Section 5.5, the aggregate
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amount of Revolving Credit Advances will not exceed $13,500,000, and
after Borrower complies with Section 5.5 or the Bank waives such
requirement in writing, $15,000,000 (the maximum amount at any time in
effect is hereafter, the "Revolving Credit Maximum"). The amount
available under the Revolving Credit Loan at any time shall be subject
to reserves established in respect of Foreign Exchange Transactions in
accordance with Section 3.1(d) below."
(b) Section 3.3(a) of the Loan Agreement is deleted in its entirety.
3. AMENDMENT OF SECTION 5.
(a) Section 5.3 of the Loan Agreement is deleted in its entirety.
(b) The introductory clause to Section 5.4 of the Loan Agreement is
amended and restated as follows:
"5.4. ADDITIONAL CONDITIONS TO EACH REVOLVING CREDIT
ADVANCE. It shall be a condition to the funding of each
Revolving Credit Advance that the following conditions be
satisfied:"
(c) The Loan Agreement is amended by the addition of a new Section 5.5
as follows:
"5.5. CONDITIONS TO INCREASE OF REVOLVING CREDIT MAXIMUM TO
$15,000,000. It shall be a condition to the increase of the
Revolving Credit Maximum to $15,000,000 that Borrower shall
have provided the Bank with the following no later than
September 29, 1995, or that the Bank shall have otherwise
waived compliance with the requirements of this Section in
writing
"(a) The Home Video Channel Security Documents, in form and
substance satisfactory to the Bank and its counsel;
"(b) Results of appropriate searches disclosing no Liens on the
assets of Home Video Channel other than Permitted Encumbrances;
"(c) Evidence of appropriate corporate action by Home Video
Channel authorizing its becoming a guarantor of the Obligations
and granting a Lien on its assets in favor of the Bank;
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"(d) An opinion of Worsdell & Vintner, Special English counsel
to Borrower, confirming that Home Video Channel has legally and
validly become a guarantor of the Obligations and granted a
Lien on its assets in favor of the Bank; and
"(e) Evidence of insurance on the assets of Home Video Channel,
with an appropriate loss payable and additional insured clause
in favor of the Bank."
4. AMENDMENT OF SECTION 10.
(a) Section 10.7 of the Loan Agreement is amended and restated as
follows:
"10.7. INDEBTEDNESS. No Obligor shall create, incur, assume or permit
to exist any Indebtedness, whether recourse or nonrecourse, and
whether superior or junior, resulting from borrowings, loans,
advances, the granting of credit, whether secured or unsecured, except
(i) Indebtedness secured by Permitted Encumbrances, (ii) Indebtedness
to the Bank arising under or as a consequence of this Agreement or the
other Loan Documents, (iii) Indebtedness existing on the date hereof
and listed on Schedule 10.7, (iv) Indebtedness in respect of Capital
Leases and Purchase Money Loans existing on the date hereof or
hereafter incurred, provided that, in no event shall the Obligors in
the aggregate incur indebtedness for Capital Leases and Purchase Money
Loans in excess of $2,500,000 in any Fiscal Year and $ 3,500,000 in
the aggregate at any time outstanding, and in no event shall Home
Video Channel incur Indebtedness for Capital Leases and Purchase Money
Loans in excess of $250,000 in any Fiscal Year and $500,000 in the
aggregate at any time outstanding, (v) trade debt or debt to service
providers incurred in the ordinary course of business, (vi) liability
under Title IV of ERISA not required to be reflected as a liability on
Borrower's consolidated balance sheet under GAAP and (vii)
Indebtedness subordinated to the Obligations on terms satisfactory to
and approved in writing by the Bank."
(b) Section 10.12 of the Loan Agreement is amended by the addition of
a new sentence at the end thereof as follows:
"Borrower shall not, nor permit any Obligor to make an
investment in American Gaming Network joint venture, by way
of capital contribution, loan or otherwise, in excess of
$3,000,000."
(c) Section 10.14 of the Loan Agreement is amended and restated as
follows:
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"10.14. NET WORTH. Borrower shall not permit its consolidated net
worth, as determined in accordance with GAAP, to be less than:
"(i) $20,000,000 through June 29, 1995;
"(ii) $22,000,000 from June 30, 1995 through December 30, 1995;
"(iii) $28,000,000 from December 31, 1995 through June 29, 1996;
"(iv) $33,000,000 from June 30, 1996 through December 30, 1996;
and
"(v) $39,000,000 on December 31, 1996 and thereafter."
(d) Section 10.16 of the Loan Agreement is amended and restated as
follows:
"10.16. SENIOR DEBT LEVERAGE. Borrower shall not permit the Senior
Debt Leverage Ratio, measured at any time, to exceed 2.00 to
1.00."
(e) Section 10.18 of the Loan Agreement is amended and restated as
follows:
"10.18. LEVERAGE RATIO. Borrower shall not permit its ratio of
total liabilities to net worth, as determined in accordance with
GAAP, to exceed:
"(i) 1.10 to 1.00 through December 30, 1995;
"(ii) 1.00 to 1.00 from December 31, 1995 through December 30,
1996; and
"(iii) 0.75 to 1.00 on December 31, 1996 and thereafter."
(f) A new Section 10.19 is added to the Loan Agreement as follows:
"10.19. XXXXXXX ENTERTAINMENT. If Borrower acquires the business
of Xxxxxxx Entertainment Group, Inc., a California corporation
("Xxxxxxx"), Borrower shall not, nor permit any Obligor to,
guaranty any Indebtedness of Xxxxxxx or make loans, capital
contributions or advances of any kind to Xxxxxxx."
5. CONDITIONS PRECEDENT. The Bank's execution and delivery of this
Amendatory Agreement shall be conditioned upon its simultaneous receipt (or
waiver of receipt in writing) of the following, all in form and substance
satisfactory to the Bank and its counsel:
(a) A facility fee of $25,000;
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(b) A new Revolving Credit Note, duly executed and delivered by
Borrower to the Bank, in replacement of the note dated December 9, 1994;
(c) An affirmation of Security Documents, duly executed and delivered
by the Obligors and, in the case of the Guaranty and Security Agreement joined
by , American Gaming and American Interactive;
(d) A Supplemental Copyright Security Agreement duly executed and
delivered by CPV;
(e) An amendment and restatement of the Pledge Agreement duly executed
and delivered by each of Borrower, PPV International, CPV and Video Store;
(f) Certificates evidencing all the issued and outstanding capital
stock of American Gaming, and American Interactive, together with stock powers
duly executed in blank;
(g) UCC-1 financing statements of American Gaming and American
Interactive deemed necessary by the Bank in its reasonable discretion in order
to perfect its security interests in the Collateral owned by American Gaming and
American Interactive;
(h) A certificate of the Secretary of each Obligor certifying (i) the
names of the officers of the applicable Obligor authorized to sign this
Amendatory Agreement and the other Loan Documents contemplated hereby, together
with true signatures of each of such officers, (ii) the resolutions of the board
of directors of each Obligor adopted and in full force and effect as of the date
hereof, authorizing the consummation of each of the transactions (including,
without limitation, the incurrence of the Obligations and the granting of the
Liens) contemplated by this Agreement and (iii) as to the absence of any
amendments to the Obligor's certificate of incorporation or by-laws since the
Closing Date;
(i) A copy of the Certificate of Incorporation of each of American
Gaming and American Interactive;
(j) Certificates of the appropriate Governmental Authorities, dated
the most recent practicable date prior to closing, showing that each Obligor is
organized and in good standing in the jurisdiction of its organization and in
each jurisdiction where it is qualified as a foreign corporation;
(k) Evidence that the insurance policies provided for in Section 7.20
of the Loan Agreement are in full force and effect (for all Obligors), with
appropriate loss payable and additional insured clauses in favor of the Bank,
certified by the insurer;
(l) Results of UCC, judgment and tax Lien searches on American Gaming
and American Interactive and disclosing no Liens other than Permitted
Encumbrances or Liens for which discharges have been obtained;
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(m) An opinion of Xxxxxxxx Xxxxxx Xxxxxxxxxx & Xxxxxxxxx, counsel to
Borrower;
(n) A copy of American Gaming Network Joint Venture Agreement,
certified as true and complete by an officer of American Gaming Network, Inc.;
and
(o) Such additional information and documents as the Bank may
reasonably request.
6. REPRESENTATIONS AND WARRANTIES. In order to induce the Bank to enter
into this Amendatory Agreement, Borrower hereby represents and warrants to the
Bank as follows:
(a) After giving effect to the updated Schedules attached hereto, the
representations and warranties contained in Section 7 of the Loan Agreement are
true and correct on and as of the date of this Amendatory Agreement, except
insofar as any representation or warranty is stated to speak exclusively as of a
specific prior date or for a specific prior period. After giving effect to the
transactions contemplated by this Amendatory Agreement, no Default or Event of
Default will be in existence or will occur.
(b) The execution, delivery and performance of this Amendatory
Agreement and the other Loan Documents contemplated hereby will not violate any
provision of any law or regulation, or of any writ or decree of any Governmental
Authority or any provision of any Obligor's organizational documents.
(c) Each Obligor, as applicable, has the power to execute, deliver and
perform this Amendatory Agreement and the other documents contemplated hereby
and has taken all necessary action to authorize the execution, delivery and
performance of same and the performance of the Loan Agreement, as amended hereby
and the other Loan Documents.
(d) The execution, delivery and performance of this Amendatory
Agreement and the other documents contemplated hereby do not require the consent
of any other Person or the consent, license, approval or authorization of, or
registration or declaration with, any Governmental Authority. This Amendatory
Agreement, the replacement Revolving Note and the other Loan Documents executed
and delivered in connection herewith each constitute a valid obligation of the
Obligor or Obligors thereto, legally binding upon the Obligor or Obligors and
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting
creditor's rights.
(e) None of the representations, warranties or statements made to the
Bank or pursuant to this Amendatory Agreement, the Loan Agreement (prior to its
amendment hereby) or pursuant to any other documents delivered in connection
with the transactions contemplated hereby, and no report, financial statement,
projection exhibit or schedule prepared or furnished by or on behalf of Borrower
or any other Obligor contains any material misstatement of fact or omitted or
omits to state any material fact necessary to make the statements herein or
therein not misleading in light of the circumstances under which they were made.
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7. MISCELLANEOUS.
(a) Borrower agrees to pay on demand all costs and expenses
(including, without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Bank) in connection with the preparation, execution and
delivery of this Amendatory Agreement and the other documents to be delivered in
connection therewith.
(b) Except as specifically amended hereby, the Loan Agreement shall
remain in full force and effect and is hereby ratified and confirmed.
(c) This Amendatory Agreement shall be construed in accordance with
and governed by the laws of the State of New Jersey.
(d) This Amendatory Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendatory
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
XXXXX PAY-PER-VIEW, INC.
By:
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Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
MIDLANTIC BANK, N.A.
By:
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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