CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS NOTED WITH “*****.” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. FIRST...
Exhibit 10.49
CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
IS OMITTED AND IS NOTED WITH “*****.” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
FIRST AMENDMENT
TO LG FILM FINANCE I, LLC
MASTER COVERED PICTURE PURCHASE AGREEMENT
AND MASTER GLOSSARY OF DEFINITIONS
AND RULES OF CONSTRUCTION;
MASTER DISTRIBUTION AGREEMENT;
AND FILMCO OPERATING AGREEMENT
TO LG FILM FINANCE I, LLC
MASTER COVERED PICTURE PURCHASE AGREEMENT
AND MASTER GLOSSARY OF DEFINITIONS
AND RULES OF CONSTRUCTION;
MASTER DISTRIBUTION AGREEMENT;
AND FILMCO OPERATING AGREEMENT
This first amendment dated January 30, 2008 (the “First Amendment”) is entered into by
and among LG Film Finance I, LLC (“FilmCo”), Lions Gate Films, Inc. (“LGF”), and
Pride Pictures, LLC (“FundCo”) and amends (i) that certain Master Covered Picture Purchase
Agreement dated May 25, 2007 (the “Master Covered Picture Purchase Agreement”); and (2) the
Master Glossary of Definitions and Rules of Construction (the “Glossary”) attached to the
Master Covered Purchase Agreement as Schedule A and is made with reference to the following facts:
Whereas, FilmCo and LGF entered into the Master Covered Picture Purchase Agreement;
Whereas, FilmCo and FundCo entered into that certain Limited Liability Company Operating
Agreement for LG Film Finance I, LLC effective as of May 25, 2007 (the “FilmCo Operating
Agreement”); and
Whereas, LGF, FilmCo and FundCo have discussed amending the Master Covered Picture Purchase
Agreement and the Glossary;
Now, therefore, for good and valuable consideration, the parties hereto hereby agree as
follows:
1. Amendment to the Glossary / Definition of Excluded Picture.
a. A new Subpart (iv) of the definition of “Excluded Picture” set forth in the
Glossary shall be added which shall read as follows:
“(iv) subject to the terms of the First Amendment, all Reduced Back-End
Pictures.”
2. Amendment to Glossary / *****. Subpart (ii) of the definition of
“Excluded Picture” set forth in the Glossary is amended by adding the following at the end of such
subpart:
“, other than the Motion Picture presently entitled “*****” which shall be a
Covered Picture and a Sequel (but excluding any and all Sequels thereto),
which FilmCo agrees to purchase pursuant to the Master Covered Picture
Purchase Agreement provided it satisfies the Covered Picture Criteria,”
3. Amendments to Glossary / New Terms. The Glossary is amended by adding
the following new defined terms in appropriate alphabetical order therein:
“Reduced Back-End Picture” means a Picture that when applying the
Calculation (and after giving effect to any accommodations granted by LG to
its portion of Adjusted Receipts which accommodations shall apply to the
Allocable Share of each of LGE and FundCo with respect to such Picture under
the Transaction Documents) would result in the amount payable to FundCo by
FilmCo being less than a dollar amount equal to ***** of one hundred percent
(100%) of the Assumed Gross Receipts for such Picture and in all other
respects is a Covered Picture.
“Assumed Gross Receipts” means ***** of domestic Gross Receipts with
***** of such amount coming from Home Video.
“Calculation” means with respect to each Covered Picture the
following: (i) Assumed Gross Receipts (irrespective of subsequent actual
Gross Receipts), less (ii) (a) Third Party Participations, other than (1)
Third Party Participations set forth in clause (i) of the definition of
Co-Financing Transaction, (2) residuals, and (3) net profit participations
and adjusted gross receipt participations with definitions less favorable
than that of FilmCo, only if the sum of such net profit participations and
adjusted receipt gross participations do not exceed ***** of one hundred
percent (100%) of Assumed Gross Receipts, and (b) the Distribution Fee.
Example. For illustrative purposes only, the
following is an example of the Calculation and shall not
modify the Transaction Documents including this First
Amendment:
Assumptions:
| (1) | ***** in Assumed Gross Receipts | ||
| (2) | Talent participation: ***** of Gross Receipts at cash break-even, with home video royalties at *****. | ||
| (3) | Co-financiers: ***** to LGF and ***** to Co-Financier with costs off the top |
Calculation:
| Distribution Fee | = ***** | |||
| Talent Participation | = ***** [***** of (Non-Home Video revenues | |||
***** Home Video revenues)] |
||||
| Co-Financier Participation | = ***** [***** of (***** less ***** talent | |||
participation)] |
||||
| Percent payable to FilmCo | = ***** | |||
| Adjusted Receipts payable to FundCo | = ***** |
4. Covered Pictures. Subject to the terms of Section 6 of this
First Amendment, the Pictures set forth in and based on the information set forth on Schedule
A attached hereto shall not for the purposes of the Transaction Documents be Reduced Back-End
Pictures (notwithstanding that the Calculation may result in such Picture being a Reduced Back-End
Picture) and shall be Covered Pictures provided each of the Covered Picture Criteria are satisfied
without regard to such Motion Picture being a
2
Reduced Back-End Picture (the “Scheduled Pictures”). The Parties hereto agree that
the order of release of the Scheduled Pictures may change and such change will not result in a
Scheduled Picture becoming and Excluded Picture unless a Scheduled Picture is not one of the first
twenty-three (23) Covered Pictures.
5. Change in Primary Economic Terms / New Pictures.
a. Change in Primary Economic Term. If prior to the Initial Investment Date
with respect to a Scheduled Picture, and provided such Scheduled Picture satisfies the Covered
Picture Criteria (other than such Scheduled Picture being a Reduced Back-End Picture), there is a
change in the economic terms with respect to such Scheduled Picture which would reduce the amount
of Adjusted Receipts payable to FundCo using the Calculation and as a result such Picture becomes a
Reduced Back-End Picture or was a Reduced Back-End Picture, then FilmCo shall have the right to
elect to have such Scheduled Picture be an Excluded Picture as a result of such change, provided
that any change that would not be reasonably anticipated to result in a reduction of the Adjusted
Receipts using the Calculation would not require any notice from LG. The election by FilmCo shall
be made by FundCo on behalf of FilmCo. The election by FilmCo shall be in writing (as either an
affirmative “Yes, the Scheduled Picture shall remain a Covered Picture” or “No, the picture should
be an Excluded Picture”) and shall be made no later than ten (10) Business Days following receipt
by FilmCo of written notice (the “Scheduled Picture Change Notice”) from LGF that there has
been a change in the economic terms with respect to such Scheduled Picture that would reduce the
amount of Adjusted Receipts payable to FundCo using the Calculation. If FilmCo elects to keep such
Scheduled Picture as a Covered Picture or fails to respond in writing with an election within the
ten (10) Business Day period, then such Scheduled Picture shall remain a Covered Picture for all
purposes of the Transaction Documents. If FilmCo elects not to have such Scheduled Picture remain
a Covered Picture then the Excluded Picture shall be an Excluded Picture for all purposes of the
Transaction Documents.
b. New Pictures. With respect to Reduced Back-End Pictures that are not
Scheduled Pictures and that otherwise satisfy each of the Covered Picture Criteria, FilmCo shall
have the right to elect to have such Reduced Back-End Picture be a Covered Picture. The election
by FilmCo shall be made by FundCo on behalf of FilmCo. The election by FilmCo shall be in writing
(as either an affirmative “Yes, include as a Covered Picture” or “No, the picture should be an
Excluded Picture”) and shall be made no later than ten (10) Business Days following receipt by
FilmCo of written notice (the “Excluded Picture Notice”) from LGF that a picture may be a
Reduced Back-End Picture which notice shall also include a Calculation for such Picture and
information substantially in the form of Schedule A. If FilmCo elects to have such Reduced
Back-End Picture be a Covered Picture or fails to respond in writing with an election within the
ten (10) Business Day period, then such picture shall be a Covered Picture for all purposes of the
Transaction Documents. If FilmCo elects not to have such Reduced Back-End Picture be a Covered
Picture then the Reduced Back-End Picture shall be an Excluded Picture for all purposes of the
Transaction Documents. LG shall provide FilmCo with the Excluded Picture Notice any time earlier
than sixty (60) days prior to the Initial Theatrical Release Date of such picture unless (x) the
Initial Theatrical Release Date is earlier than sixty (60) days from the date LGF acquires an
Acquired Picture that is a Reduced Back-End Picture, or (y) is within sixty (60) days from the date
hereof, in which event LGF shall deliver the Excluded Picture Notice as soon as practicable. If
after the date on which the Notice Materials are sent but before the Initial Investment Date (i)
there is a change in the economic terms with respect to a Reduced Back-End Picture that is not a
Scheduled Picture and such change based on the Calculation and the related information would reduce
the amount of Adjusted Receipts payable to FundCo using the Calculation, or (i) with respect to a
Reduced Back-End Picture that is not a Scheduled Picture there is an increase in the Purchase Price
set forth on the Notice Materials by more than ***** of the amount of the Purchase Price set forth
in the Notice Materials, then the procedure set forth in the Section 5.b shall be repeated.
3
c. Determination. FundCo and FilmCo agree that (i) the determination of
whether a Picture is a Reduced Back-End Picture is being made by LG using the Calculation which
does not represent any anticipated or actual film performance or the actual amount of Adjusted
Receipts for any Picture and is being used solely for the purpose of determining whether a Picture
is a Reduced Back-End Picture, and (ii) neither LG nor any Affiliate thereof shall have any
liability to FundCo or FilmCo if the actual amounts paid to FilmCo are less than the amount
reflected when running the Calculation.
6. Agreement with respect to *****: Within ten (10) Business Days from the
date of execution of this First Amendment LG shall deliver a written notice to FilmCo in which LG
will either elect to include the motion picture project currently entitled “*****” (the
“Optional Picture”) as a Covered Picture or exclude ***** as an Excluded Picture.
a. If ***** is excluded, its shall be an Excluded Picture for all purposes of the
Transaction Documents notwithstanding that it may satisfy the Covered Picture Criteria at such time
or at a later date.
b. Subject to Section 6.c and d hereof, if ***** is included as a Covered
Picture it shall be a Covered Picture for all purposes of the Transaction Documents notwithstanding
that such Picture may not satisfy the Covered Picture Criteria at such time or at a later date.
c. If LG elects to include ***** as a Covered Picture, then, FilmCo shall send Call
Notices from time to time to FundCo in accordance with the terms of the FilmCo Operating Agreement;
provided that with respect to ***** FundCo shall only be required to make a Capital Contribution in
connection with each Call Notice for ***** to pay for the Distribution Costs and Expenses as
reflected on such Call Notice (the “***** Capital Contributions”). FundCo’s Allocable Share of
***** shall be calculated in accordance with the terms of the FilmCo Operating Agreement.
d. If LG elects to include ***** as a Covered Picture, and if on the one (1) year
anniversary of the first ***** Capital Contribution, the cumulative amount of FundCo’s Allocable Share
of Adjusted Receipts with respect to ***** (calculated without giving effect to amounts paid
pursuant to Section 6.9.2.1 and 6.9.2.2 of the FilmCo Operating Agreement) is less than the
aggregate of all ***** Capital Contributions calculated with interest thereon from the date of each *****
Capital Contribution with an interest rate of LIBOR ***** (such
difference being the “***** Shortfall”), then LG agrees to pay to the FundCo Manager on the one (1) year anniversary date
an amount equal to the ***** Shortfall.
e. If LG elects to include ***** as a Covered Picture then LG may deliver the Notice
Materials with respect to ***** at any time and payment of the Purchase Price with respect to *****
shall be made by FilmCo, if requested by LG as part of such Notice Materials no later than March 28, 2008
provided such Notice Materials are delivered no later than March 14, 2008.
f. If LG elects to include ***** as a Covered Picture, the Master Distribution
Agreement shall be amended solely with respect to the Gross Receipts from the Exploitation of *****
by inserting: (I) a new Subsection 6.3.2(iii) which shall read as follows:
| “(iii) Third, to LG ***** of all remaining amounts until such time as LG has indefeasibly received an amount equal to ***** times the Purchase Price for ***** provided LG has made the payment set forth in Section 6.d of the First Amendment.” |
4
and, (II) the sequential Subsection 6.3.2(iii), (iv) and (v) shall now be
increased by one (i.e., 6.3.2(iii) shall now be 6.3.2(iv), etc.); and (III), a new
Subsection 6.3.2(vi) shall be added which shall read as follows:
| “(vi) Fourth, to LG ***** of all remaining amounts until such time as LG has indefeasibly received an amount equal to ***** times the Purchase Price for ***** provided LG has made the payment set forth in Section 6.d of the First Amendment.” |
7. Amendment to the Master Distribution Agreement / *****: Section 6.3.2(i)
and 6.3.2.(ii) of the Master Distribution Agreement shall not apply to the allocation of Gross
Receipts with respect to the Motion Picture entitled “*****” (“*****”). Gross Receipts
solely with respect to ***** shall be allocated as follows:
a. Domestic Territory.
i) First, out of Gross Receipts generated from the United States, Canada and
their respective territories and possessions (the “Domestic Territory”), amounts due to
Distributor as reimbursement of or payment for Distribution Costs and Expenses paid or incurred in
connection with the Exploitation of ***** in such Accounting Period or a prior Accounting Period or
payable by Distributor within thirty (30) days from the end of the most recent Accounting Period to
the extent not previously recouped by Distributor or paid directly by FilmCo, all as set forth in
the applicable Settlement Report; and
ii) Second, amounts due to Distributor for payment of its Distribution Fee
with respect to Gross Receipts received from the Domestic Territory with respect to ***** in the
applicable Accounting Period as set forth in the applicable Settlement Report.
iii) The balance shall be distributed to FilmCo as Adjusted Receipts. In addition,
if on the one-year anniversary of the first Ultimate Statement for *****, FundCo’s Allocable Share
of Adjusted Receipts from ***** previously distributed to FundCo or on deposit in the FilmCo
Separate Account (with such Allocable Share calculated in each case for purposes of this subpart
(iii) only without regard to amounts paid pursuant to Section 6.9.2.1 and 6.9.2.2 of the FilmCo
Operating Agreement) do not at least equal the aggregate of all Capital Contributions made by
FundCo to FilmCo for the purpose of paying Distribution Costs and Expenses in the Domestic
Territory for ***** together with interest calculated at the prime rate plus ***** basis points
accruing from the date of each Capital Contribution to the date of repayment (the “Unrecouped
Distribution Costs and Expenses”), then LG agrees to pay to the FundCo Manager an amount equal
to the Unrecouped Distribution Costs and Expenses for the Domestic Territory.
b. International Territory.
i) First, out of Gross Receipts generated from each Territory other than the
Domestic Territory (the “International Territory”), amounts due to Distributor for payment
of its Distribution Fee with respect to Gross Receipts received from the International Territory
from ***** in the applicable Accounting Period as set forth in the applicable Settlement Report;
and
ii) Second, amounts due to Distributor as reimbursement of or payment for
Distribution Costs and Expenses paid or incurred in connection with the Exploitation of ***** in
the International Territory in such Accounting Period or a prior Accounting Period or payable by
Distributor
5
within thirty (30) days from the end of the most recent Accounting Period to the extent not
previously recouped by Distributor or paid directly by FilmCo, all as set forth in the applicable
Settlement Report; and
iii) The balance shall be distributed to FilmCo as Adjusted Receipts.
8. Legal Fees. FilmCo agrees to pay to FundCo and LGF their respective
legal fees incurred in connection with preparation of this First Amendment; provided however the
legal fees payable to FundCo in connection with this First Amendment shall not exceed ***** and
the legal fees payable to LGF in connection with this First Amendment shall not exceed *****.
FilmCo shall issue a capital call notice to its members with respect to their respective portion
(i.e., 50/50) of the legal fees.
9. Miscellaneous.
i) The execution, delivery and performance of this First Amendment by each of the
parties hereto has been duly authorized by such party. Each party hereto has obtained all
necessary consents required in connection with entering into this First Amendment including the
FundCo Manager obtaining any necessary consents from the FundCo lenders. This First Amendment when
executed and delivered by each of the parties hereto in accordance with the terms hereof, shall
constitute a valid and binding obligation of the parties hereto, enforceable against each party in
accordance with its terms, in each case subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws relating to or affecting creditors’ rights
generally and subject, as to enforceability, to the effect of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in equity or at law).
ii) Except as expressly set forth in this First Amendment, the terms and conditions
of the Transaction Documents are not modified and each such Transaction Document shall remain in
full force and effect. Capitalized terms not otherwise defined herein shall have the meaning set
forth in the Glossary.
[Signature Page to Follow]
6
The parties hereto each agree to this First Amendment as of the date first written above.
Lions Gate Films, Inc.
By:
|
/s/ XXXXX XXXXX | |||||
Pride Pictures, LLC
By: Global Securitization Services,
LLC, its Manager
| By: | /s/ | |||
LG Film Finance I, LLC
By: Lions Gate Entertainment, Inc., its Manager
By: Lions Gate Entertainment, Inc., its Manager
| By: | /s/ XXXXX XXXXX | |||
| Xxxxx Xxxxx Title: General Counsel |
and
By: Pride Pictures, LLC
By: Global Securitization Services, LLC, its
Manager
| By: | /s/ | |||
7
