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EXHIBIT 10.72
AMENDMENT NO. 3 TO
LIMITED FORBEARANCE AGREEMENT
AMENDMENT NO. 3 dated as of March 30, 2001 (the "Amendment"), to Limited
Forbearance Agreement dated as of January 11, 2001, as heretofore amended (the
"Forbearance Agreement") among THE XXXXXXX-XXXXX COMPANY (the "Borrower"), its
subsidiaries (the "Guarantors", and together with the Borrower, the "Credit
Parties"), the Lenders party to the Credit Agreement defined below (the
"Lenders") and THE CHASE MANHATTAN BANK (formerly known as Chemical Bank), as
Agent and as Fronting Bank for the Lenders (the "Agent").
The Borrower, the Guarantors, the Lenders and the Agent are parties to a
Credit, Security, Guaranty and Pledge Agreement, dated as of June 16, 1996, as
amended (the "Credit Agreement").
As set forth in Section 1 of the Forbearance Agreement, Defaults and
Events of Default under the Credit Agreement have occurred and are continuing.
In order to allow the Borrower additional time to prepare for the proposed sale
of its film library and related accounts receivable and to explore various
restructuring options, the Borrower has requested that the Agent and the
Lenders amend the Forbearance Agreement to (i) extend the Lenders' agreement to
forebear from applying collections in respect of the Credit Parties'
receivables to repayment of the Loans, (ii) release an additional portion of
such collections to fund operating expenses of the Credit Parties and (iii)
make certain other modifications to the Forbearance Agreement.
The Borrower has advised the Agent that the Borrower is proposing to sell
to Xxxx Xxxx (the "Purchaser") all of the shares of stock and warrants and
other rights in The Xxxxxx Entertainment Company currently held by the Company
for an aggregate purchase price of $1,250,000 which will be paid in two
installments (the "Sale"). The first installment will consist of a cash down
payment of $125,000 to be paid upon closing of the proposed sale (the "First
Installment"). The Purchaser will pay the balance of the purchase price by
delivering a non-interest-bearing promissory note (the "Promissory Note") to
the Borrower in the principal amount of $1,125,000 which will be payable within
45 days after delivery thereof, subject to a ten-day grace period (the "Second
Installment").
The Agent and the Lenders have agreed to the foregoing requests, all on
the terms and subject to the conditions hereinafter set forth.
Accordingly, the parties hereby agree as follows:
1. Defined Terms. All capitalized terms not otherwise defined herein
are used as defined in the Forbearance Agreement.
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2. Amendments to Forbearance Agreement. Subject to the satisfaction of
the condition precedent set forth in Section 4 hereof, the Forbearance
Agreement is hereby amended effective as of the Effective Date (as hereinafter
defined) as follows:
(a) The reference to "April 4, 2001" as the Stated Expiration Date
set forth in Section 2 of the Forbearance Agreement is hereby amended to be
"May 9, 2001."
(b) The Disbursement Schedule attached as Exhibit A to the
Forbearance Agreement is hereby replaced in its entirety with the Disbursement
Schedule attached as Exhibit A to this Amendment.
(c) The following new paragraph shall be added to Section 5
immediately following clause (iii) thereof:
"Notwithstanding the provision in Section 4 above, no later than
5:00 p.m. (Los Angeles time) on Tuesday of each week during the
Forbearance Period, the Agent shall apply 50% of all amounts, if
any, in excess of $2,500,000 on deposit in the Chase Accounts and
the Comerica Accounts collectively as of 5:00 p.m. (Los Angeles
time) on the Friday of the preceding week towards payment of the
Obligations."
3. Xxxxxx Sale. In connection with the Sale, the Credit Parties hereby
covenant and agree to:
(a) pay, or cause the Purchaser to pay, the portion of the First
Installment remaining after deducting the reasonable fees and expenses of the
Borrower's counsel directly relating to the Sale directly to one of the
Comerica Accounts, and to use amounts so received in accordance with Section 4
of the Forbearance Agreement prior to requesting that the Agent disburse
Collected Funds pursuant to Section 5 of the Forbearance Agreement;
(b) deliver, or cause the Purchaser to deliver, the Promissory Note
to the Agent (on behalf of the Lenders) to be held by the Agent as part of the
Collateral; and
(c) pay, or cause the Purchaser to pay, the Second Installment
directly to the Cash Collateral Account to be applied in the same manner as
other Collected Funds pursuant to the Forbearance Agreement.
4. Condition to Effectiveness. The provisions of Section 2 of this
Amendment shall not become effective unless and until the Agent shall have
received counterparts of this Agreement executed by each of the parties hereto.
5. Full Force and Effect. Except as expressly amended hereby, the
Forbearance Agreement shall continue in full force and effect in accordance
with the provisions thereof on the date hereof. As used in the Forbearance
Agreement, the terms "Agreement", "this Agreement", "herein", "hereafter",
"hereto", "hereof," and words of similar import shall, unless the context
otherwise requires, mean the Forbearance Agreement as amended by this Amendment.
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6. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
7. 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.
8. Headings. The headings of this Amendment are for the purposes of
reference only and shall not affect the construction of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the date and year
first above written.
BORROWER:
THE XXXXXXX-XXXXX COMPANY
By:
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Name:
Title:
GUARANTORS:
KL PRODUCTIONS, INC.
POST AND PRODUCTION SERVICES, INC.
TWILIGHT ENTERTAINMENT INC.
KLF GUILD CO.
KLTV DEVELOPMENT CO.
XXXXXXX-XXXXX INTERNATIONAL, INC.
KL INTERACTIVE MEDIA, INC.
DAYTON WAY PICTURES III, INC.
By:
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Name:
Title:
KLC/NEW CITY
By its General Partner
THE XXXXXXX-XXXXX COMPANY
By:
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Name:
Title:
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LENDERS:
Executed in THE CHASE MANHATTAN BANK (formerly
New York, New York known as Chemical Bank), as Agent
By:
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Name:
Title:
NIB CAPITAL BANK N.V. (formerly known as
De Nationale Investeringsbank N.V.
By:
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Name:
Title:
By:
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Name:
Title:
COMERCIA BANK -- CALIFORNIA
By:
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Name:
Title:
FAR EAST NATIONAL BANK
By:
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Name:
Title:
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