EXHIBIT 10.24
April 14, 1998
From: Xxxxxx & Co.
000 Xxxxxx
Xxxxxx XX0X OQS
Berliner Bank A.G. London Branch
No. 0 Xxxxx Xxxxx
Xxxxxxxxx
Xxxxxx XX0X 0XX
To: Overseas Filmgroup, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: Restated and Amended Syndication Agreement dated as of October 31, 1996
(the "Syndication Agreement") among Xxxxxx & Co. ("Coutts"), Berliner Bank
A.G. London Branch ("Berliner") (Coutts and Xxxxxxxx collectively referred
to herein as the "Banks"), Overseas Filmgroup, Inc. and Entertainment/Media
Acquisition Corporation (the "Company") as amended and extended.
Dear Sirs:
This letter (the "Amendment") constitutes an amendment to the Syndication
Agreement on the terms set forth below. Capitalized terms used but not
defined herein shall have the meaning set forth in the Syndication Agreement.
1. EXTENSION: Subject to the Company's continued compliance with the terms of
the Syndication Agreement, the Company's compliance with the additional
financial information requirements (the "Additional Financial Information
Requirements") as provided in paragraph 4 below, the additional financial
obligations (the "Additional Financial Obligations") as provided in paragraph
5 below, Xxxxx and Xxxxxx Xxxxxx (the "Xxxxxxx"), co-Chairmen and co-CEO's of
the Company, providing a guarantee as more fully described in paragraph 7
below, and agreement of the Xxxxxxx to defer payment under the Merger Note as
more fully described in paragraph 8 below, we hereby agree that all
references to 9th May (and such later dates as
Overseas Filmgroup, Inc.
April 15, 1998
Page 2
provided by earlier amendment) in clauses 2.8 and 17 of the Syndication
Agreement shall be deemed to be references to April 9, 1999.
2. BORROWING LIMITS: Effective as of April 9, 1998 subject
to Xxxxxx Xxxxxx and Xxxxx Xxxxxx'x execution of guarantees in a form
acceptable to the Banks pursuant to paragraph 7 below, the borrowing limit
under the Operating Facility shall be increased as and when needed to a
maximum of US$7,234,000 ($50,000 of such amount being available to pay a fee
to the Banks in exchange for their agreement to extend further borrowing
under this Amendment); provided always that the increases and decreases shall
be substantially in line with the projected cash flow schedule provided to
Coutts during its most recent review of the Company for the period April 1998
through October 1999 (the "Cash Flow Schedule"). Further the Company
acknowledges that under the Syndication Agreement, Coutts and Xxxxxxxx have
absolute discretion with respect to the approval of each new Film Facility.
With effect from the date hereof, the Film Facilities are no longer a
revolving credit line and sums repaid may not be reborrowed. We confirm that
as at today's date the maximum amount available as Film Facilities is
$17,863,716.
3. EXTENSION OF INDIVIDUAL FILM FACILITIES: With respect to the following
Film Facilities, notwithstanding the maturity date set forth in each of the
Film Facilities, Coutts and Berliner agree to waive such maturity dates and
agree that the maturity date for each individual Film Facility named herein
shall be the last day of the month reflected in the Cash Flow Schedule in
which the individual Film Facility is projected to be fully repaid: (i)
"INFINITY", (ii) "ONE GOOD TURN", (iii) "BODY OF A WOMAN", (iv) "THIS IS THE
SEA", (v) "ROAD TO RUIN" a/k/a "DRIVE", (vi) "COUNTDOWN", (vii) "XXXXX",
(viii) "DESIGNATED MOURNER", (ix) "KEEP THE ASPIDISTRA FLYING", (x)
"A BROTHER'S KISS", (xi) "SLAVES TO THE UNDERGROUND", (xii) "LIFEBREATH",
(iix) "STAND-INS", (ix) "ALIVE AND KICKING", (x) "GOD MONEY", (xi) "FIRST TO
GO" and (xii) "DIFFERENT FOR GIRLS". The maturity dates for those Film
Facilities not projected to be fully repaid during the term of the Cash Flow
Schedule shall be subject to review in October 1999.
4. ADDITIONAL FINANCIAL INFORMATION: Paragraph 10 of the Syndication
Agreement shall be amended to include an obligation of the Company to provide
the following financial information on a monthly basis: (i) Doubtful Debt
Report, (ii) Receivable Due Date Report, (iii) New Sales Report, (iv) Sales
Exception Report, (v) Actual vs. Budget Operating Expense Report, (vi)
Existing Films Distribution Expense Variance Report, and (vii) the additional
information required pursuant to the letter from Coutts dated 6 August 1997.
The information to be included in such reports identified here shall be in
accordance with discussions held during the last review conducted by Coutts,
such discussions to be confirmed by Coutts and Berliner in writing as soon as
practicable after execution hereof.
Overseas Filmgroup, Inc.
April 15, 1998
Page 3
5. ADDITIONAL FINANCIAL OBLIGATIONS: Paragraph 11 of the Syndication
Agreement shall be amended to include an obligation of the Company to seek
written approval of Coutts, as agent, prior to entering into any new
acquisitions or commitments, which approval shall specifically provide the
amount the Company may expend in connection with such acquisition as well as
the amount of distribution expenses and/or print and advertising costs
expected to be incurred in connection with the distribution of such picture
proposed to be acquired. Additionally, the Company hereby reaffirms and
undertakes the following obligations:
(a) The Company is reminded that clause 2.5 of the Restated and Amended
Syndication Agreement states that "the purpose of the Operating
Facility is to meet the Borrower's working capital requirements".
This does not allow the Company to advance monies to producers on
"any basis", including but not limited to enhancements, as the risk
on the commerciality of the film should be borne by distributors.
Any loan requests of this nature are to be made to the Banks for
assessment; if agreed, such loans will have to be bonded and
documented as usual.
(b) The Company will not be permitted, except with the prior approval of
the Banks, to supplement any letters of credit or advances drawn
under the Project Line with drawings under the Operating Line.
(c) The Company is not to acquire any more copyrights under the
Operating Line, except with prior approval of the Banks which will
in any event requires specific estimate cover.
6. FILM FACILITY CROSSING: The Company agrees that gross receipts collected
on any film financed under a Film Facility after such Film Facility has been
repaid (exclusive of all amounts payable to a third party rights owner or
producer and receipts related to the motion pictures, "MRS. DALLOWAY" and
"DIFFERENT FOR GIRLS"), shall be available to Coutts and Xxxxxxxx for
purposes of reducing other outstanding Film Facilities as determined by
Coutts and Berliner in their sole discretion.
7. GUARANTEES OF XXXXX AND XXXXXX XXXXXX: The Xxxxxxx, in their capacities as
individuals and not as directors or officers of the Company, will give joint
and several personal guarantees (the "Guarantees"), for the benefit of Coutts
and Berliner, for all amounts in excess of $6,000,000 outstanding under the
Operating Facility only, up to an aggregate guarantee amount of $618,000 (the
"Guarantee Limit"), callable only as and when monies are payable in
accordance with the terms of the Syndication Agreement. At such time as the
amount outstanding under the Operating Facility has been permanently reduced
to less than $6,000,000, in the Banks' sole opinion, the Guarantees shall be
automatically released and extinguished. The Xxxxxxx obligations under the
Guarantees shall survive any enforcement by Coutts and Berliner of their
security interests in the Company.
8. MERGER NOTE: The Xxxxxxx agree that payments by the Company pursuant to
the $2,000,000 note received by them in the October 1996 merger of Overseas
Filmgroup, Inc. and Entertainment/Media Acquisition Corporation (the "Merger
Note") shall continue to accrue, but payments shall be deferred, until the
Operating Facility returns to the pre-existing limit of $5,000,000 which
Coutts and Berliner, in their sole opinion, view as permanent and not before
May 1999 except with the prior written approval of Coutts and Xxxxxxxx. The
Merger Note shall be extended for a period of time equal to the period
payments are deferred pursuant to the foregoing, the deferred payments will
continue to bear interest and such payment amounts shall be adjusted to
compensate for additional interest accrued pursuant to the deferral of
payments. The rights of Xxxxxx X. Xxxxxx and Xxxxx Xxxxxx under the Merger
Note and related security agreement will not otherwise be affected.
Overseas Filmgroup, Inc.
April 15, 1998
Page 4
9. CERTAIN WAIVERS: Notwithstanding paragraph 11.1.1 of the Syndication
Agreement, Coutts and Berliner hereby acknowledge and waive the breach by the
Company as of the date of this Amendment and/or prior thereto, of the Banks'
requirement in Section 11.1.1 of the Syndication Agreement in relation to a
minimum net worth (the "Net Worth Covenant") and provide further that such
Net Worth Covenant shall be amended for the next twelve months to be
$11,000,000 and thereafter shall be subject to further review. Additionally,
Coutts and Xxxxxxxx hereby acknowledge that certain unsecured liabilities
incurred in the ordinary course of business as provided under paragraph
11.1.3.1 of the Syndication Agreement are more than forty-five days past due
(and waive any non-compliance with paragraph 11.1.3.1 in connection
therewith), that the Company expects to meet these liabilities in accordance
with the Cash Flow Schedule and that they consent to such arrangements.
10. GOVERNING LAW AND JURISDICTION: This Amendment shall be governed by and
construed in accordance with English law and the parties hereby submit to the
non-exclusive jurisdiction of the English Courts and the state and federal
courts located in Los Angeles, California.
This Amendment sets out, inter alia, the terms under which the Syndication
Agreement is amended. Except as expressly provided herein, the Syndication
Agreement, as hereby amended, shall remain in full force and effect. The
parties hereto agree to use their best efforts to expeditiously effectuate
any further documents and/or instruments reasonably requested or necessary to
carry out the intention of the provisions hereof. This Amendment may be
executed in any number of counterparts each of which, when executed, shall be
deemed an original and all of which shall together constitute one and the
same agreement. When signed by all the parties hereto, this Amendment shall
be a binding agreement on the parties hereto.
Overseas Filmgroup, Inc.
April 15, 1998
Page 5
Please sign and return the enclosed copies of this letter to indicate your
agreement to the foregoing.
Yours faithfully
for and on behalf Xxxxxx & Co.
By: /s/ XXXXX XXXXXXX /s/ XXXXXX XXXXX
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Its:
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for and on behalf of Berliner Bank A.G.
By: /s/ XXXXX XXXXXXX
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Its: Associate Director
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By: /s/ XXXXX XXXX
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Its: Director
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ACCEPTED AND AGREED
AS OF THE DATE WRITTEN ABOVE:
Overseas Filmgroup, Inc.
By: /s/ XXXXXXX X. XXXXXXX
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Its: COO/CFO
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ACCEPTED AND AGREED
AS OF THE DATE WRITTEN ABOVE:
Xxxxx Xxxxxx (in her capacity as an individual)
/s/ XXXXX XXXXXXXX LITTLE
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Xxxxxx Xxxxxx (in his capacity as an individual)
/s/ XXXXXX X. XXXXXX
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