EXHIBIT 10.1
AMENDMENT NO. 1 dated as of December 14, 2001 to the
Credit, Security, Guaranty and Pledge Agreement dated
as of August 31, 2001 among Crown Media Holdings,
Inc. (the "Borrower"), the Guarantors named therein,
the Lenders referred to therein and JPMorgan Chase
Bank (formerly known as The Chase Manhattan Bank), as
Administrative Agent and as Issuing Bank for the
Lenders (the "Agent") (as the same may be amended,
supplemented or otherwise modified, the "Credit
Agreement").
INTRODUCTORY STATEMENT
The Lenders have made available to the Borrower a credit facility
pursuant to the terms of the Credit Agreement.
The Borrower is forming a subsidiary Delaware business trust solely for
the purpose of issuing certain common and preferred securities in exchange for
debentures of the Borrower and the Borrower is raising $265,000,000 in capital
from investors in exchange for the sale of preferred securities and certain
certificates sold to such investors.
The Borrower has requested certain amendments to the Credit Agreement
to, among other things, permit it to enter into, and perform its obligations in
connection with the above-described transaction, and the Lenders and the Agent
have agreed to certain revisions to amend 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 5 hereof, the
Credit Agreement is hereby amended as of the Effective Date (as hereinafter
defined) as follows:
(A) The second paragraph of the Introductory Statement to the
Credit Agreement shall be amended by (i) deleting the reference to
"$300,000,000" appearing therein and replacing it with "$320,000,000" and (ii)
deleting the reference to "$200,000,000" appearing therein and replacing it with
"$220,000,000".
(B) Article 1 of the Credit Agreement is hereby amended by
adding the following definitions in the appropriate alphabetic sequence:
" 'Amendment No. 1 Effective Date' shall mean the date on
which all the conditions set forth in Section 5 of Amendment No. 1 to
the Credit Agreement have been satisfied.
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'Contingent Appreciation Certificate Agreement' shall mean the
Contingent Appreciation Certificate Agreement dated as of the Trust
Issue Date among the Borrower and the holders party thereto, as the
same may be amended from time to time in accordance with the terms
hereof.
'Contingent Appreciation Certificates' shall mean the
certificates issued pursuant to the Contingent Appreciation Certificate
Agreement.
'Crown Media Trust' shall mean Crown Media Trust, a Delaware
business trust formed pursuant to a Declaration of Trust of Crown Media
Trust, dated as of December 7, 2001 as amended and restated by an
Amended and Restated Declaration of Trust of Crown Media Trust dated as
of the Trust Issue Date among Xxxxxxx X. Xxxxxx, Xxxx Xxxxxxxx and
Xxxxx Xxxxxxx, as Regular Trustees, Chase Manhattan Bank (USA), N.A.,
as Delaware Trustee, JPMorgan Chase Bank, as Property Trustee and Crown
Media Holdings, Inc., as Sponsor, as the same may be amended from time
to time in accordance with the terms hereof (the "Amended and Restated
Declaration of Trust").
'Payment Blockage Period' shall mean any period during which
(i) there exists any payment default hereunder with respect to which
the applicable grace period, if any, has expired, (ii) any other
default exists hereunder for which the Agent has provided a Payment
Blockage Notice pursuant to the terms of the Trust Indenture and the
Contingent Appreciation Certificate Agreement or (iii) the Agent has
declared the Loans to be due and payable pursuant to Article 7 hereof.
'Replacement Hallmark Cards Letter of Credit' shall mean the
Letter of Credit issued by Credit Suisse First Boston or an Affiliate
on behalf of HCC for the benefit of the Borrower in connection with the
Replacement HCC Promissory Note.
'Replacement HCC Promissory Note' shall mean the Promissory
Note dated as of the Trust Issue Date among the Borrower, as borrower,
Crown Media International, Inc. and Crown Media United States, LLC, as
guarantors, and HCC, as lender.
'Subsidiary Trust Documents' shall mean all documents entered
into in connection with the Subsidiary Trust Transaction including, but
not limited to, the Trust Indenture, the Amended and Restated
Declaration of Trust, the Contingent Appreciation Certificate
Agreement, the Trust Preferred Securities Guarantee and the Trust
Common Securities Guarantee.
'Subsidiary Trust Transaction' shall mean the transaction
pursuant to which Crown Media Trust will be issuing the Trust
Securities to certain investors, the proceeds of which will be used by
Crown Media Trust to purchase the Trust Indenture Debentures from the
Borrower pursuant to the Trust Indenture and the Borrower will be
issuing Contingent Appreciation Certificates to such investors.
'Trust Common Securities' shall mean the class of common
securities issued by Crown Media Trust in connection with the
Subsidiary Trust Transaction.
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'Trust Common Securities Guarantee' shall mean the Guarantee
provided by the Borrower pursuant to the Common Securities Guarantee
Agreement dated as of the Trust Issue Date among the Borrower and
JPMorgan Chase Bank, as trustee for the benefit of the holders of the
Trust Common Securities, as amended from time to time in accordance
with the terms hereof.
'Trust Indenture' shall mean the Indenture dated the Trust
Issue Date, between the Borrower as Issuer and JPMorgan Chase Bank as
Indenture Trustee."
'Trust Indenture Debentures' shall mean the debentures
authenticated and delivered under the Trust Indenture to Crown Media
Trust.
'Trust Issue Date' shall mean the Issue Date as defined in the
Trust Indenture.
'Trust Preferred Securities' shall mean the class of preferred
securities issued by Crown Media Trust in connection with the
Subsidiary Trust Transaction.
'Trust Preferred Securities Guarantee' shall mean the
Guarantee provided by the Borrower pursuant to the Preferred Securities
Guarantee Agreement dated as of the Trust Issue Date among the Borrower
and JPMorgan Chase Bank, as trustee for the benefit of the holders of
the Trust Preferred Securities, as amended from time to time in
accordance with the terms hereof.
'Trust Securities' shall mean the Trust Preferred Securities
and the Trust Common Securities."
(C) The definition of "GAAP" appearing in Article 1 of the
Credit Agreement is hereby amended by adding the following sentence to the end
thereof:
"Notwithstanding the foregoing, GAAP as it is applied to the
Subsidiary Trust Transaction shall not be modified for any reason and
shall be applied consistent with its application at the time of the
closing of the Subsidiary Trust Transaction."
(D) The definition of "Guarantors" appearing in Article 1 of
the Credit Agreement is hereby amended by adding the words ", Crown Media Trust"
after the words "Xxxxxx (L) Ltd." appearing in the parenthesis therein.
(E) The definition of "Change in Control" appearing in Article
1 of the Credit Agreement is hereby amended by adding the following clauses (c)
and (d) to the end thereof:
"(c) individuals who on the Issue Date (as defined in the
Trust Indenture) constituted the Board of Directors (together with any
new directors whose election by such Board of Directors or whose
nomination for election by the stockholders of the Borrower was
approved by a vote of at least 66-2/3% of the Board of Directors then
still in office who were either directors on Issue Date (as defined in
the Trust Indenture) or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority
of the Board of Directors still in office or (d) the
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consummation by the Borrower of any transaction that would constitute a
"Rule 13e-3 transaction" as defined in the Exchange Act."
(F) The definition of "Restricted Payments" is hereby amended
by adding the following clause (vi) at the end thereof:
"(vi) payments by the Borrower made in connection with the
Subsidiary Trust Documents (other than fees or other expenses subject
to Section 14.01(a), (b) and (c) of the Trust Indenture) including but
not limited to (x) all payments of principal, interest and other
amounts on or with respect to the Trust Indenture Debentures, the Trust
Securities, any Contingent Appreciation Certificates, the Trust
Securities Guarantee, or any other instrument issued or document
entered into in connection therewith and (y) any fees and expenses
payable in connection thereto."
(G) The definition of "Subsidiary" is hereby amended by adding
the following to the end thereof:
", and Crown Media Trust shall not be considered a
"Subsidiary" for any purpose hereof."
(H) Section 3.23 of the Credit Agreement is hereby amended by
adding the phrase "except the Contingent Appreciation Certificates" at the end
of clause (d) thereof.
(I) Section 5.1 of the Credit Agreement is hereby amended by
adding the following clause (l) at the end thereof:
"(l) Deliver to the Agent, or otherwise ensure that the Agent
receives, a copy of (i) any notice provided by the Borrower in
connection with the Subsidiary Trust Transaction contemporaneously with
the delivery of such notices in accordance with the provisions of the
Subsidiary Trust Documents, (ii) all notices received by the Borrower
pursuant to the Subsidiary Trust Documents, promptly upon receipt
thereof, (iii) a current list of the names and record addresses of all
holders of the Trust Preferred Securities and (iv) any proposed
amendment of the Subsidiary Trust Documents."
(J) Section 6.1 of the Credit Agreement is hereby amended by
adding the following clauses (x) and (xi) at the end thereof:
"(x) Indebtedness of the Borrower arising from the issuance of
the Trust Indenture Debentures and the Contingent Appreciation
Certificates; and
(xi) Indebtedness of the Borrower to HCC under the Replacement
HCC Promissory Note."
(K) Section 6.3 of the Credit Agreement is hereby amended by
adding the following clause (v) at the end thereof:
"(v) the Trust Preferred Securities Guarantee and the Trust
Common Securities Guarantee."
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(L) Section 6.4 of the Credit Agreement is hereby amended by
adding the following clause (vii) at the end thereof:
"(vii) Investments by the Borrower in Crown Media Trust
represented by the Trust Common Securities in an amount not to exceed
$8,196,000."
(M) Section 6.5 of the Credit Agreement is hereby amended by
deleting subclauses (x) and (y) appearing in clause (vii) thereof and replacing
the same with the following:
"(vii) payments by the Borrower to HCC of a commitment fee of
1.5% of the commitment under the Replacement HCC Promissory Note in the
form of shares of common stock of the Borrower."
(N) Section 6.5 of the Credit Agreement is hereby amended by
adding the following clause (ix) at the end thereof:
"(ix) scheduled payments of interest on the Trust Indenture
Debentures; provided, however, that no such payments may be made during
any Payment Blockage Period."
(O) Section 6.12 of the Credit Agreement is hereby amended by
(i) deleting the words "HCC Promissory Note" appearing therein and inserting in
lieu thereof the words "Replacement HCC Promissory Note", (ii) deleting the
words "Hallmark Cards Letter of Credit" appearing therein and inserting in lieu
thereof the words "Replacement Hallmark Cards Letter of Credit" and (iii) adding
the following sentence at the end thereof:
"In addition, no Credit Party shall be entitled to amend,
alter, modify, waive or consent to any amendment, alteration,
modification or waiver to any of the Subsidiary Trust Documents if such
amendment, alteration, modification or waiver materially and adversely
changes any material term thereof or is reasonably likely to materially
and adversely affect the interests of the Lenders."
(P) Section 6.23 of the Credit Agreement is hereby amended by
deleting the chart in clause (ii) in its entirety and replacing the same with
the following:
"FISCAL QUARTER/YEAR ENDING AMOUNT
--------------------------- ------
December 31, 2001 - 56,000,000
March 31, 2002 - 42,000,000
June 30, 2002 - 43,000,000
September 30, 2002 - 43,000,000
December 31, 2002 - 38,000,000
March 31, 2003 - 15,000,000
June 30, 2003 - 15,000,000
September 30, 2003 - 14,000,000
December 31, 2003 - 14,000,000
December 31, 2004 66,000,000
December 31, 2005 129,000,000
December 31, 2006 142,000,000"
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(Q) Section 6.25 of the Credit Agreement is hereby amended in
its entirety by replacing the same with the following:
"Net Worth. Permit Net Worth to be less than the sum of (x)
the base amount for each fiscal quarter set forth in the table below,
plus (y) the sum of the Consolidated Net Income of the Borrower
(subsequent to the Amendment No. 1 Effective Date) during which the
Borrower achieves positive Consolidated Net Income, plus (z) 50% of net
equity invested in the Borrower after the Amendment No. 1 Effective
Date.
FISCAL QUARTER ENDING BASE AMOUNT
--------------------- -----------
December 31, 2001 775,000,000
March 31, 2002 731,000,000
June 30, 2002 688,000,000
September 30, 2002 645,000,000
December 31, 2002 602,000,000
March 31, 2003 578,000,000
June 30, 2003 553,000,000
September 30, 2003 529,000,000
December 31, 2003 505,000,000
Thereafter 505,000,000"
(R) Article 7 of the Credit Agreement is hereby amended by
adding the following clauses (q), (r) and (s) at the end thereof:
"(q) an Event of Default (as defined in the Trust Indenture)
shall have occurred under the Trust Indenture;
(r) an Event of Default (as defined in the Trust Preferred
Securities Guarantee) shall have occurred under the Trust Preferred
Securities Guarantee; or
(s) any Restricted Payments not permitted by Section 6.5(ix)
hereof become due and payable in connection with the Subsidiary Trust
Transaction, including but not limited to, as a result of (x) an
Optional Redemption, a Special Event Redemption, a Change of Control
Redemption or a Change of Control Offer as all such terms are defined
in, and pursuant to the terms of, Sections 3.01 and 3.02 of the Trust
Indenture, (y)
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a voluntary or involuntary liquidation, winding up or termination of
Crown Media Trust or (z) an Event of Default (as defined in the Trust
Indenture) under the Trust Indenture; provided however, that any such
payments made (A) after the expiry of any Payment Blockage Period for
which no new Payment Blockage Period has begun and (B) in connection
with a distribution of Trust Indenture Debentures to holders of the
Trust Securities pursuant to Section 8.01(v) of the Amended and
Restated Declaration of Trust shall not constitute an Event of Default
hereunder."
(S) Section 12.1(b) of the Credit Agreement is hereby amended
by adding the following clauses (x) and (xi) at the end thereof:
"(x) to provide a Payment Blockage Notice to the Borrower
pursuant to the terms of the Trust Indenture and the Contingent
Appreciation Certificate Agreement in order to effectuate the
subordination provisions appearing therein, and
(xi) to amend the provisions of the Limited Guarantee and the
Hallmark Cards Subordination and Support Agreement in connection with
the issuance of the Replacement HCC Promissory Note."
(T) As of the Commitment Increase Effective Date (as defined
in Section 6 below), Schedule 1 (Schedule of Commitments) to the Credit
Agreement is hereby amended in its entirety by a new Schedule 1 as set forth as
Appendix A hereto.
Section 3. Consent. The Borrower has requested that the Agent and the
Lenders consent to a waiver of compliance with (i) Section 6.5(vii) to allow the
Borrower to use an additional $40,000,000 in Net Cash Proceeds in excess of the
amount permitted thereunder to pay down intercompany Indebtedness; (ii) Section
6.5 to allow the Borrower to transfer to Hallmark India Private Limited ("HIPL")
the funds necessary for HIPL to pay in full the principal and accrued interest
on HIPL's overdraft/working capital loan facility with The Chase Manhattan Bank;
(iii) Section 6.6 to allow (x) HIPL to dispose of decoding equipment with a fair
market value of approximately $200,000, and (y) Crown Media US to sell its
wholly-owned Subsidiary, Odyssey Productions Limited, to National Interfaith
Cable Coalition ("NICC") pursuant to a stock purchase agreement between Crown
Media US and NICC dated as of August 4, 2001, on terms and conditions described
in memo to be provided by Agent.
Section 4. Increase in Commitments. As of the Commitment Increase
Effective Date (as defined in Section 6 below), the Total Commitment shall be
increased by $35,000,000 by the addition of WestLB Bank ("WestLB") as a party to
the Credit Agreement, with a Term Loan Commitment of $10,937,500 and a Revolving
Credit Commitment of $24,062,500. On or prior to the Commitment Increase
Effective Date, WestLB shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assumption Agreement in the form of
Appendix B hereto. Upon such execution, delivery, acceptance and recording, from
and after the Commitment Increase Effective Date, WestLB shall be a party to the
Credit Agreement and shall have all the rights and obligations of a Lender
thereunder.
Section 5. Conditions to Effectiveness. The effectiveness of this
Amendment (other than the increase in the Total Commitment) is subject to the
satisfaction in full of each of the
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conditions precedent set forth in this Section 5 (the date on which all such
conditions have been satisfied being herein call the "Effective Date"):
(A) the Agent shall have received counterparts of this
Amendment which, when taken together, bear the signatures of the Borrower, each
Guarantor, the Agent and the Required Lenders;
(B) the Agent shall have received and be satisfied with final
versions of all documentation to be executed in connection with the Subsidiary
Trust Transaction; and
(C) all legal matters incident to this Amendment shall be
satisfactory to Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Agent.
Section 6. Conditions to Effectiveness of the Commitments. The
effectiveness of Section 4 of this Amendment shall be subject to the
satisfaction in full of each of the conditions precedent set forth in this
Section 6 (the date on which all such conditions have been satisfied being
herein called the "Commitment Increase Effective Date"):
(A) on or before January 7, 2002, the Agent shall have
received an Assumption Agreement (in form of Appendix B hereto), duly executed
by WestLB; and
(B) on or before January 7, 2002, the Agent shall have
received a new Revolving Credit Note and Term Note executed by the Borrower for
WestLB in the face amount of $24,062,500 and $10,937,500, respectively.
Section 7. 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 8. Fees. In consideration for the Lenders and the Agent
entering into the Amendment, on the Covenant Effective Date, the Borrowers agree
to pay the Agent for the account of each of the Lenders who executes this
Amendment prior to the consummation of the Subsidiary Trust Transaction a fee
equal to 0.025% of the aggregate Commitment of each Lender under the Credit
Agreement.
Section 9. Covenants of the Borrower. The Borrower hereby covenants
that (i) it shall use the proceeds of the Subsidiary Trust Transaction as set
forth in Schedule 2.3 of the Securities Purchase Agreement dated as of the Trust
Issue Date among the Borrower, Crown Media Trust and the Investors set forth
therein, (ii) it shall promptly following execution of all documentation
executed in connection with the Subsidiary Trust Transaction, deliver execution
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copies thereof certified by and officer of the Borrower and (iii) it shall pay
the Agent the fees set forth in Section 8 hereof on January 7, 2002.
Section 10. Consummation of Subsidiary Trust Transaction. In the event
that the Subsidiary Trust Transaction has not been consummated by December 31,
2001, Section 2 and clause (i) of Section 3 of this Amendment shall be deemed to
be void ab initio and shall be of no further force or effect.
Section 11. Further Assurances. At any time and from time to time, upon
the Agent'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 Agent reasonably deems
necessary to effect the purposes of this Amendment.
Section 12. Fundamental Documents. This Amendment is designated a
Fundamental Document by the Agent.
Section 13. 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 14. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
Section 15. 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 16. Expenses. The Borrowers agree to pay all out-of-pocket
expenses incurred by the Agent 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 Agent.
Section 17. 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.
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IN WITNESS WHEREOF, the parties hereby have caused this
Amendment to be duly executed as of the date first written above.
BORROWER:
CROWN MEDIA HOLDINGS, INC.
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer
GUARANTORS:
CROWN MEDIA INTERNATIONAL, INC.
CROWN MEDIA INTERNATIONAL (SINGAPORE) INC.
CROWN ENTERTAINMENT LIMITED
CROWN MEDIA DISTRIBUTION, LLC
CROWN MEDIA INTERNATIONAL (HK) LIMITED
HEN LLC
HEN (L) LTD.
HM HOLDINGS OF DELAWARE LLC
CROWN MEDIA UNITED STATES LLC
HM INTERMEDIARY LLC
CITI TEEVEE LLC
DOONE CITY PICTURES LLC
HALLMARK INDIA PRIVATE LIMITED
By /s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title:
LENDERS:
JPMORGAN CHASE BANK (f/k/a
The Chase Manhattan Bank),
individually and as Issuing
Bank and Agent
By /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
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BANK OF AMERICA, N. A.
By
--------------------------------------------
Name:
Title:
CREDIT SUISSE FIRST BOSTON
By /s/ Xxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
By /s/ Xxxx X'Xxxx
--------------------------------------------
Name: Xxxx X'Xxxx
Title: Vice President
CITICORP USA, INC.
By /s/ Xxxxxx Xxxx
--------------------------------------------
Name: Xxxxxx Xxxx
Title: MD
DEUTSCHE BANK AG
NEW YORK BRANCH
By
--------------------------------------------
Name:
Title:
ROYAL BANK OF CANADA
By /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: Managing Director
ABN AMRO
By
--------------------------------------------
Name:
Title:
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BANK ONE, N.A. (Main Office Chicago)
By /s/ Xxxxxxx Xxxxxxxxx
---------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
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