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EXHIBIT 10.60
AMENDMENT NO. 1 dated as of February 27, 1998 to
the Credit, Security, Guaranty and Pledge
Agreement dated as of November 4, 1997 (the
"Credit Agreement"), among DOVE ENTERTAINMENT,
INC. (the "Borrower"), the Corporate Guarantors
named therein and THE CHASE MANHATTAN BANK, as
Lender (the "Lender").
INTRODUCTORY STATEMENT
The Lender has made available to the Borrower a revolving credit
facility pursuant to the terms of the Credit Agreement.
The Borrower has requested, among other things, that certain
provisions of the Credit Agreement be modified in order to provide for the
making of additional loans to Dove Four Point, Inc. in connection with the
production of the television motion picture tentatively entitled "Futuresport".
The Borrower, the Corporate Guarantors and the Lender 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 as of the Effective Date (as hereinafter
defined) as follows:
(A) Article 1 of the Credit Agreement is hereby amended by inserting the
following definitions in their correct alphabetical position:
"Futuresport ABC Contract" shall mean that certain license agreement
dated as of January 12, 1998, revised as of January 26, 1998, February 4,
1998 and February 13, 1998, between the Futuresport Borrower and American
Broadcasting Companies, Inc.
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"Futuresport Borrower" shall mean Dove Four Point, Inc.
"Futuresport Closing Date" shall mean the date on which the conditions
precedent set forth in Section 4.3 have been satisfied or waived and the
initial Futuresport Loan is made hereunder.
"Futuresport Columbia Contract" shall mean that certain license
agreement dated as of January 9, 1998, between Dove International, Inc. and
Columbia Tristar Home Video with respect to worldwide video distribution
rights for 'Futuresport'.
"Futuresport Commitment Termination Date" shall mean June 30, 1998.
"Futuresport Distribution Agreements" shall mean, collectively, the
agreements entered into by the Futuresport Borrower or the Borrower,
whether existing on the Futuresport Closing Date or thereafter executed,
pursuant to which the Futuresport Borrower or the Borrower has licensed,
leased, assigned or sold distribution, exhibition or other exploitation
rights to "Futuresport" in any media or territory to any Person.
"Futuresport Rights Agreements" shall mean, collectively, the
following documents:
(i) Writing Services Agreement dated as of February 3, 1997
between Dove Four Point, Inc. and Xxxxxx Xxxxx with respect to
the writing services of Xxxxxx Xxxxx in connection with a
teleplay tentatively entitled 'Futuresport' (the "Futuresport
Screenplay");
(ii) Letters dated January 13, 1997 and September 22, 1997, each
from Dove Four Point, Inc. to Writers and Artists Agency
confirming that Dove Four Point, Inc. has engaged Xxxxxx Xxxxx
to provide a first rewrite and a second rewrite of the
Futuresport Screenplay;
(iii) Certificate of Authorship dated February 13, 1998 from Xxxxxx
Xxxxx in favor of Dove Four Point, Inc.;
(iv) Production Services Deal Memo dated as of January 6, 1998
between Dove Four Point, Inc. and MEC Futuresport Productions
Inc.
"Futuresport RTL Contract" shall mean that certain Deal Memo dated as
of January 27, 1998, between Dove International, Inc. and RTL Plus
Deutschland Fernshen GmbH & Co., KG with respect to 'Futuresport'.
(B) Clause (xiii) of the definition of "Eligible Receivables" appearing in
Article 1 of the Credit Agreement is hereby amended by adding the following
clause at the end thereof:
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" or (3) with respect to 'Futuresport', amounts attributable to such
Product (other than the proceeds of the Futuresport ABC Contract, the
Futuresport Columbia Contract and the Futuresport RTL Contract) may be
treated as Eligible Receivables (even though 'Futuresport' has not yet been
Completed), provided that such amounts otherwise meet all of the applicable
criteria for inclusion as Eligible Receivables; provided, further, that
upon payment in full of the Futuresport Loans, amounts payable under the
Futuresport ABC Contract, the Futuresport Columbia Contract and the
Futuresport RTL Contract which have not previously been applied to repay
the Futuresport Loans may also be treated as Eligible Receivables if such
amounts otherwise meet all of the applicable criteria for inclusion as
Eligible Receivables; or"
(C) The definition of "Commitment" appearing in Article 1 of the Credit
Agreement is hereby amended by adding the words "(other than the
Futuresport Loans)" immediately following the word "Loans" appearing in the
first line therein.
(D) Section 2.1(a) to the Credit Agreement is hereby amended by adding the
words "(excluding the Futuresport Loans)" immediately following the word
"Loans" in such Section 2.1(a).
(E) Section 2.1(d) of the Credit Agreement is hereby amended by adding the
parenthetical "(excluding the Futuresport Loans)" immediately following the
word "Loans" appearing in the second line therein and third line therein.
(F) Section 2.1 to the Credit Agreement is hereby amended by adding the
following clause (e) at the end thereof:
"(e) In addition to the Loans contemplated pursuant to Section 2.1(a)
and (b) above, the Lender agrees, upon the terms and subject to the
conditions hereof, to make loans (the "Futuresport Loans") to the
Futuresport Borrower, on any Business Day from the Futuresport Closing Date
to but excluding the Futuresport Commitment Termination Date for use in
paying (i) production costs in connection with the motion picture
tentatively entitled "Futuresport", in amounts not to exceed $3,289,260 in
the aggregate (the "Futuresport Production Commitment"), and (ii) all
charges of the Lender in connection with "Futuresport", including, but not
limited to, interest, bank fees and legal fees, in amounts not to exceed
$210,740 in the aggregate (the "Futuresport Bank Charges Commitment"). The
Futuresport Production Commitment and the Futuresport Bank Charges
Commitment are collectively referred to herein as the "Futuresport
Commitment". Once repaid, amounts constituting the Futuresport Commitment
may not be reborrowed and the Futuresport Commitment shall be reduced
accordingly."
(G) Section 2.2(c) to the Credit Agreement is hereby amended by adding the
words "other than a Futuresport Loan" immediately preceding the words "in
excess of the Borrowing Base" appearing in the proviso of such section.
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(H) Section 2.2(e) to the Credit Agreement is hereby amended by adding the
words "or the Futuresport Commitment, as the case may be" immediately
following the words "Commitment" appearing therein.
(I) Section 2.2 to the Credit Agreement is hereby amended by adding the
following clause (g) at the end thereof:
"(g) The Lender shall disburse the proceeds of the Futuresport Loans
directly into the Production Account for "Futuresport", located at Royal
Bank of Canada, 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, X.X. X0X 0X0, Account
No. 2829-15507, ABA No. 00010- 003, Reference: "Futuresport", which account
has been established for the sole purpose of paying production costs of
such motion picture."
(J) Section 2.3(a) to the Credit Agreement is hereby amended in its entirety to
read as follows
"(a) The Loans made by the Lender hereunder shall be evidenced by
promissory notes substantially in the forms of Exhibit A and A-2
(Production) and A-2 (Bank Charges) hereto (collectively, the "Note"), in
the face amount of the Lender's Commitment, the Futuresport Production
Commitment and Futuresport Bank Charges Commitment, respectively, payable
to the order of the Lender, duly executed by the Borrower or the
Futuresport Borrower, as the case may be, and dated the date of the Closing
Date or Futuresport Closing Date, as the case may be. The outstanding
principal balance of the Loans shall be payable on the Commitment
Termination Date, except in the case of the Futuresport Loans, the
outstanding principal balance of such loans shall be payable on October 31,
1998."
(K) Section 2.5(a) to the Credit Agreement is hereby amended by adding the
words "(excluding the Futuresport Loans)" immediately following the words
"outstanding Loans" appearing in the last line therein.
(L) Section 2.6(a) to the Credit Agreement is hereby amended by adding the
words "(excluding the Futuresport Loans)" immediately following the word
"Loans" appearing in the second to last line therein.
(M) Section 2.9(d) of the Credit Agreement is hereby amended by adding the
words "(excluding the Futuresport Loans)" immediately after the word
"Loans" appearing in the first and fourth lines therein.
(N) Section 2.9(e) of the Credit Agreement is hereby amended by adding the
words "(excluding the Futuresport Loans)" immediately after the word
"Loans" appearing therein.
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(O) Section 2.9 of the Credit Agreement is hereby amended by adding the
following clause (h) at the end thereof:
"(h) In addition to the mandatory prepayment contemplated by Section
2.9(d), the Futuresport Borrower shall prepay the Futuresport Loans (i) in
an amount equal to any balance in the Production Account for "Futuresport"
remaining after all expenditures relating to the production of
"Futuresport" shall have been paid, (ii) in an amount equal to and promptly
upon the receipt of any other funds which shall be paid to the Futuresport
Borrower in connection with that portion of the Collateral relating to
"Futuresport" (other than the first $3,950,000 of the advance payable to
the Futuresport Borrower by American Broadcasting Companies, Inc. pursuant
to the Futuresport ABC Contract) and (iii) as otherwise provided in Article
8."
(P) Section 2.14(a) to the Credit Agreement is hereby amended by adding the
words "(excluding the Futuresport Loans)" immediately after the words
"loans then outstanding" appearing in clause (A) of the proviso of such
section.
(Q) Section 2.14(h) of the Credit Agreement is hereby amended by adding the
words "(excluding the Futuresport Loans)" immediately following the words
"Loans outstanding" appearing in the second line therein.
(R) The Credit Agreement is hereby amended by adding the following Article 3A
immediately prior to Article 4 appearing therein:
"3A. ADDITIONAL REPRESENTATIONS AND COVENANTS RELATING TO "FUTURESPORT". In
order to induce the Lender to make the Futuresport Loans, the Futuresport
Borrower makes the following representations, warranties and covenants to
the Lender:
(a) Ownership of Copyright, etc. Futuresport Borrower owns under
copyright sufficient motion picture, television and allied rights in the
literary properties upon which the motion picture tentatively entitled
"Futuresport" (hereinafter referred to as "Futuresport") is based to enable
the Futuresport Borrower to produce such picture in accordance with, and to
satisfy its obligations under, the Futuresport Distribution Agreements.
Futuresport Borrower has duly recorded a Form PA covering the Futuresport
Screenplay in the United States Copyright Office (and in no other offices)
and delivered copies of all such recordation to the Lender. "Futuresport"
and any Film Asset or any component part thereof will not violate or
infringe upon any copyright, right of privacy, trademark, patent, trade
name, performing right or any literary, dramatic, musical, artistic,
personal, private, civil, contract or property right or any other right of
any Person or contain any libelous or slanderous material. There is no
claim, suit, action or proceeding pending or threatened against the
Futuresport Borrower that involves a claim of infringement of any copyright
with respect to "Futuresport" or any Film Asset
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and the Futuresport Borrower has no knowledge of any existing infringement
by any other Person of any copyright held by the Futuresport Borrower with
respect to "Futuresport" or any Film Asset.
(b) Futuresport Rights Agreements. Futuresport Rights Agreements are
the only documents and agreements pursuant to which the Futuresport
Borrower obtained rights to the Film Assets for "Futuresport". True and
complete copies of the various agreements constituting the Futuresport
Rights Agreements and all agreements with all persons whose services in
connection with "Futuresport" are a requirement of the Futuresport
Distribution Agreements, have been furnished to the Lender and are
consistent with the requirements of the Futuresport Distribution
Agreements. At the time of each Futuresport Loan, the above mentioned
agreements will be in full force and effect, all amounts required to be
paid to prevent reversion of the rights under the Futuresport Rights
Agreement shall have been paid in full and no party to any such agreements
will be in default thereunder or have any accrued right of termination
thereunder. Futuresport Borrower agrees that it will not amend, alter,
modify or waive, or consent to any amendment, alteration, modification or
waiver of, the Futuresport Rights Agreements without the consent of the
Lender.
(c) The Futuresport Borrower agrees that it will direct, or cause to
be directed, payment of the first $3,950,000 payable to the Futuresport
Borrower by ABC under the Futuresport ABC Contract, to the production
account for 'Futuresport' set forth in Section 2.2(g) hereof.
(S) Article 4 of the Credit Agreement is hereby amended by adding the following
Section 4.3 at the end thereof:
"SECTION 4.3. Conditions Precedent to Futuresport Loans. The
obligations of the Lender to make each Futuresport Loan are subject to the
following conditions precedent (in addition to those conditions precedent
set forth in Section 4.2):
(a) Security and Supporting Documentation. The Lender shall have
received each of the items required by Section 5.21 of the Credit Agreement
(as amended by Amendment No. 1) with respect to the production of
'Futuresport'."
(T) Section 5.13 (a)(i) of the Credit Agreement is hereby amended by adding the
words "(or the case of 'Futuresport', to a location outside the United
States or Canada)" immediately after the words "United States".
(U) Section 5.21(ix) of the Credit Agreement is hereby amended by adding the
words "with respect to the motion picture tentatively entitled
'Futuresport' and" immediately after the words "shall not be applicable"
appearing in the proviso.
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(V) Section 6.21(b)(ii) of the Credit Agreement is hereby amended by adding the
words "(other than 'Futuresport') immediately after the words
"movie-of-the-week" and "movies-of-the-week" respectively.
(W) Article 7 of the Credit Agreement is hereby amended by adding the words
"and/or the Futuresport Commitment" following word "Commitment" appearing
in the third and eighth lines of the concluding paragraph of such Article
7.
Section 3. Conditions to Effectiveness. The effectiveness of this
Amendment is subject to the satisfaction in full of each of the conditions
precedent set forth in this Section 3 (the date on which all such conditions
have been satisfied being herein called the "Effective Date"):
(A) the Lender shall have received counterparts of this Amendment
which, when taken together, bear the signatures of the Borrower, each Corporate
Guarantor and the Lender; and
(B) all legal matters incident to this Amendment shall be satisfactory
to Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Lender.
Section 4. Fees. In consideration for the Lender entering into this
Amendment and making the Futuresport Loans, on the Futuresport Closing Date, the
Futuresport Borrower agrees to pay the Lender a one-time fee in the amount of
$35,000.
Section 5. 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 6. Further Assurances. At any time and from time to time, upon
the Lender'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 Lender reasonably deems
necessary to effect the purposes of this Amendment.
Section 7. Fundamental Documents. This Amendment is designated a
Fundamental Document by the Lender.
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Section 8. 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 9. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 10. 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 11. Expenses. The Borrower agrees to pay all out-of-pocket
expenses incurred by the Lender 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 Lender.
Section 12. 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:
DOVE ENTERTAINMENT, INC.
By: /s/ XXXX XXXXXX
------------------------------
Name: Xxxx Xxxxxx
Title: Vice President & Chief
Financial Officer
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CORPORATE GUARANTORS:
DOVE INTERNATIONAL, INC.
By: /s/ XXXX XXXXXX
--------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
DOVE FOUR POINT, INC.
By: /s/ XXXX XXXXXX
--------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
LENDER:
Executed in THE CHASE MANHATTAN BANK, as Lender
New York, New York
On February 27, 1998
By: /s/ XXX X. XXXXX
--------------------------------
Name: Xxx X. Xxxxx
Title: Vice President
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EXHIBIT A-2 (Production)
FORM OF FUTURESPORT PRODUCTION NOTE
$3,289,260 New York, New York
as of February 27, 1998
FOR VALUE RECEIVED, DOVE FOUR POINT, INC., a Florida corporation (the
"Obligor"), DOES HEREBY PROMISE TO PAY to the order of THE CHASE MANHATTAN BANK
(the "Lender") at the office of The Chase Manhattan Bank at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, in lawful money of the United States of America in
immediately available funds, the principal amount of THREE MILLION TWO HUNDRED
EIGHTY NINE THOUSAND TWO HUNDRED SIXTY DOLLARS ($3,289,260), or the aggregate
unpaid principal amount of all Futuresport Loans (as defined in the Credit
Agreement referred to below) made by the Lender to the Obligor under the
Futuresport Production Commitment pursuant to said Credit Agreement, whichever
is less, on such date or dates as is required by said Credit Agreement, and to
pay interest at the rates and times provided in the Credit Agreement on the
unpaid principal amount from time to time outstanding hereunder, in like money,
at such office and at such times as set forth in said Credit Agreement. All
amounts payable hereunder shall be payable no later than October 31, 1998.
The Obligor and any and all sureties, guarantors and endorsers of this
Note and all other parties now or hereafter liable hereon severally waive grace,
demand, presentment for payment, protest, notice of any kind (including, but not
limited to, notice of dishonor, notice of protest, notice of intention to
accelerate or notice of acceleration) and diligence in collecting and bringing
suit against any party hereto and agree to the extent permitted by applicable
law (i) to all extensions and partial payments, with or without notice, before
or after maturity, (ii) to any substitution, exchange or release of any security
now or hereafter given for this Note, (iii) to the release of any party
primarily or secondarily liable hereon, and (iv) that it will not be necessary
for any holder of this Note, in order to enforce payment of this Note, to first
institute or exhaust such holder's remedies against the Obligor or any other
party liable hereon or against any security for this Note. The nonexercise by
the holder of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
The Lender may (but is not obligated to) set forth on the last page
hereof such information as is designated on the last page hereof.
This Note is the Production Note with respect to "Futuresport"
referred to in that certain Credit, Security, Guaranty and Pledge Agreement
dated as of November 4, 1997, as amended (as the same may be further amended,
supplemented or otherwise modified, renewed or replaced
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from time to time, the "Credit Agreement") among the Obligor, the Corporate
Guarantors referred to therein and The Chase Manhattan Bank, and is entitled to
the benefits of, and is secured by the security interests granted in the Credit
Agreement and the other security documents and guarantees referred to and
described therein, which among other things, contains provisions for optional
and mandatory prepayment and for acceleration of the maturity hereof upon the
occurrence of certain events, all as provided in the Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
WHOLLY WITHIN THE STATE OF NEW YORK.
DOVE FOUR POINT, INC.
By: _____________________________
Name:
Title:
12
[LAST PAGE OF NOTE]
Unpaid Name of
Principal Person
Payments Balance Making
Date Amount of Loan Principal Interest of Note Notation
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EXHIBIT A-2 (Bank Charges)
FORM OF FUTURESPORT BANK CHARGES NOTE
$210,740 New York, New York
as of February 27, 1998
FOR VALUE RECEIVED, DOVE FOUR POINT, INC., a Florida corporation (the
"Obligor"), DOES HEREBY PROMISE TO PAY to the order of THE CHASE MANHATTAN BANK
(the "Lender") at the office of The Chase Manhattan Bank at 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, in lawful money of the United States of America in
immediately available funds, the principal amount of TWO HUNDRED TEN THOUSAND
SEVEN HUNDRED FORTY DOLLARS ($210,740), or the aggregate unpaid principal amount
of all Futuresport Loans (as defined in the Credit Agreement referred to below)
made by the Lender to the Obligor under the Futuresport Bank Charges Commitment
pursuant to said Credit Agreement, whichever is less, on such date or dates as
is required by said Credit Agreement, and to pay interest at the rates and times
provided in the Credit Agreement on the unpaid principal amount from time to
time outstanding hereunder, in like money, at such office and at such times as
set forth in said Credit Agreement. All amounts payable hereunder shall be
payable no later than October 31, 1998.
The Obligor and any and all sureties, guarantors and endorsers of this
Note and all other parties now or hereafter liable hereon severally waive grace,
demand, presentment for payment, protest, notice of any kind (including, but not
limited to, notice of dishonor, notice of protest, notice of intention to
accelerate or notice of acceleration) and diligence in collecting and bringing
suit against any party hereto and agree to the extent permitted by applicable
law (i) to all extensions and partial payments, with or without notice, before
or after maturity, (ii) to any substitution, exchange or release of any security
now or hereafter given for this Note, (iii) to the release of any party
primarily or secondarily liable hereon, and (iv) that it will not be necessary
for any holder of this Note, in order to enforce payment of this Note, to first
institute or exhaust such holder's remedies against the Obligor or any other
party liable hereon or against any security for this Note. The nonexercise by
the holder of any of its rights hereunder in any particular instance shall not
constitute a waiver thereof in that or any subsequent instance.
The Lender may (but is not obligated to) set forth on the last page
hereof such information as is designated on the last page hereof.
This Note is the Bank Charges Note with respect to "Futuresport"
referred to in that certain Credit, Security, Guaranty and Pledge Agreement
dated as of November 4, 1997, as amended (as the same may be further amended,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Credit Agreement") among the Obligor, the Corporate Guarantors referred to
therein and The Chase Manhattan Bank, and is entitled to the benefits of, and is
secured by the security interests granted in the Credit Agreement and the
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other security documents and guarantees referred to and described therein, which
among other things, contains provisions for optional and mandatory prepayment
and for acceleration of the maturity hereof upon the occurrence of certain
events, all as provided in the Credit Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
WHOLLY WITHIN THE STATE OF NEW YORK.
DOVE FOUR POINT, INC.
By: _____________________________
Name:
Title:
15
[LAST PAGE OF NOTE]
Unpaid Name of
Principal Person
Payments Balance Making
Date Amount of Loan Principal Interest of Note Notation
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