United states securities and exchange commission



Download 6.39 Mb.
Page84/105
Date31.05.2016
Size6.39 Mb.
1   ...   80   81   82   83   84   85   86   87   ...   105

with an undated stock power, executed in blank, and (b) use commercially reasonable efforts to deliver, with respect to each Picture acquired, or for which principal photography commenced, after the Original Closing Date but prior to the Closing Date, an intercreditor agreement (on terms satisfactory to the Agent) with each guild that has been granted a Lien which is pari passu or senior to the Lien granted to the Administrative Agent with respect to each such Picture; provided that for any acquired Picture, such an intercreditor agreement shall only be required if the acquisition price was greater than $15,000,000.

(b)      If at any time on or after the date that is 30 days after the Closing Date, the LGAC 1 Account shall have a cash balance in excess of $1,000, promptly deliver to the Administrative Agent a fully-executed Account Control Agreement in favor of the Administrative Agent with respect to the LGAC 1 Account.

6.      NEGATIVE COVENANTS

From the date hereof and for so long as any amount shall remain outstanding under any Loan or any other Obligation shall remain unpaid or unsatisfied, each of the Credit Parties agrees that it will not, and will not allow (to the extent required under Section 6.31) each of its Subsidiaries and the Co-Financing Joint Venture Entities to:

SECTION 6.1      Limitations on Indebtedness . Incur, create, assume or suffer to exist any Disqualified Capital Stock or Indebtedness or permit any partnership or joint venture in which any Credit Party is a general partner to incur, create, assume or suffer to exist any Disqualified Capital Stock or Indebtedness other than the following, in each case (other than clauses (a), (b), (c) (solely with respect to trade payables), (d), (e), (i), (j), (k), (l), (n), (q), (t) and (u) below) which are incurred no later than the Closing Date:

(a)      Indebtedness of Credit Parties represented by the Loans, the Notes and the other Obligations;

(b)      Guaranties permitted pursuant to Section 6.3;

(c)      unsecured liabilities for acquisitions of rights and trade payables incurred in the ordinary course of business and payable on normal trade terms and not otherwise prohibited hereunder;

(d)      Indebtedness in respect of inter-company advances payable by one Credit Party to another Credit Party to the extent constituting Investments permitted under Section 6.4(c) including outstanding indebtedness under the Existing Comerica Loan Facility;

(e)      Indebtedness arising in connection with the transactions contemplated by Section 6.8;

(f)      Indebtedness with respect to Subordinated Debt;


(g)      Indebtedness in respect of secured purchase money financing and refinancings thereof (including Capital Leases) to the extent permitted by Section 6.2(k), in an aggregate principal amount not to exceed $1,000,000 at any one time outstanding;

(h)      Indebtedness in respect of Negative Pick Up Obligations;

(i)      Indebtedness to a Co-Financier in relation to a Co-Financed Picture; provided that such Indebtedness is non-recourse to the Credit Parties other than with respect to such Picture;

(j)      to the extent constituting Indebtedness, amounts payable to an Approved Completion Guarantor from the proceeds of a Picture to recoup its contribution to the Negative Cost of such Picture and other amounts that may be recouped by such Approved Completion Guarantor with regard to such Picture pursuant to the terms of the applicable Approved Completion Bond;

(k)      Foreign Rights Loans;

(l)      loans from a third party lender to a Special Purpose Producer for a particular Picture or group of Pictures which are non-recourse to any Credit Party or any Subsidiary of a Credit Party other than such Special Purpose Producer; provided that in each case such loan shall be subject to an Interparty Agreement, if applicable, as reasonably determined by the Administrative Agent;

(m)      loans from a third party lender to a Non-Theatrical Subsidiary or Disqualified Capital Stock issued by a Non-Theatrical Subsidiary, in each case which are non-recourse to any Credit Party or any Subsidiary of a Credit Party other than such Non-Theatrical Subsidiary;

(n)      Indebtedness of a Co-Financing Venture Entity to an Approved Co-Financing Venture Counterparty in relation to an Approved Co-Financing Venture Transaction and pursuant to the relevant Co-Financing Venture Interparty Agreement; provided , that such Indebtedness is non-recourse to the Credit Parties;

(o)      Indebtedness of a Co-Financing Venture Entity in accordance with the terms of paragraph 11(a) of Schedule 3 hereto;

(p)      Indebtedness in respect of inter-company advances payable by a Co-Financing Venture Entity to a Credit Party, to the extent constituting Investments permitted under Section 6.4(i) hereof;

(q)      Indebtedness pursuant to Swap Agreements permitted under Section 6.18;

(r)      the Existing Comerica Loan Facility;

(s)      existing Indebtedness listed on Schedule 6.1 ;

(t)      to the extent current, liabilities relating to net or gross profit participations

and other contingent compensation, including royalties, deferments and guild residuals with respect to the production, distribution, acquisition or other exploitation of Pictures;

(u)      loans made against subsidies or other soft money benefits; provided that such loans are non-recourse other than to the applicable Credit Party’s rights to the applicable subsidy or soft money benefit and are secured solely to the extent permitted under Section 6.2(v); and

(v)      the Intercompany Note dated as of January 13, 2012, by LGAC in favor of LGEC in exchange for LGAC’s receipt of share consideration payable to Sellers pursuant to the Purchase Agreement; provided that the note shall be expressly subordinated in right of payment to the Obligations and should not be due and payable until after repayment in full of the Obligations and termination of the Facility.

SECTION 6.2      Limitations on Liens . Incur, create, assume or suffer to exist any Lien on any of its revenue stream, property or assets, whether now owned or hereafter acquired, except the following, in each case (other than clauses (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (l), (m), (n), (o), (q), (r), (s), (v), (w), (x), (y), (z) and (bb) below) which are incurred, created or assumed no later than the Closing Date:

(a)      Liens of the Administrative Agent (or the benefit of the Secured Parties) created under this Credit Agreement, the other Fundamental Documents and any Swap Agreements permitted by Section 6.18 which satisfy the conditions of clause (ii) of the definition of “Obligations;”

(b)      Liens pursuant to written security agreements in favor of guilds that are (i) required pursuant to collective bargaining agreements and (ii) if such Lien is pari passu or senior to the Lien granted to the Administrative Agent with respect to the applicable Picture, it shall be subject to an intercreditor agreement on terms satisfactory to the Administrative Agent (unless such Lien was granted prior to the Closing Date and is subject to an intercreditor agreement with Comerica Bank as collateral agent for the Existing Comerica Loan Facility, in which case a new intercreditor agreement will not be required); provided , that for any acquired Picture, an intercreditor agreement shall only be required to the same extent required under Section 6.24;

(c)      Liens customarily granted or incurred in the ordinary course of business with regard to goods provided or services rendered by laboratories and production houses, record warehouses, common carriers, landlords, warehousemen, mechanics and suppliers of materials and equipment; provided , such Liens are limited to the goods provided or to the goods relating to which services were rendered;

(d)      Liens arising out of attachments, judgments or awards as to which an appeal or other appropriate proceedings for contest or review are timely commenced (and as to which foreclosure and other enforcement proceedings shall not have been commenced (unless fully bonded or otherwise effectively stayed)) and as to which appropriate reserves have been established in accordance with GAAP and that do not otherwise result in an Event of Default;

(e)      Liens for taxes, assessments or other governmental charges or levies the


validity or amount of which is not yet due or is currently being contested in good faith by appropriate proceedings pursuant to the terms of Section 5.12;

(f)      Liens arising by virtue of any statutory or common law provision relating to banker’s Liens, rights of setoff or similar rights with respect to deposit accounts;

(g)      Liens in favor of Distributors to secure their right to enjoy their licensed rights pursuant to Distribution Agreements entered into in the ordinary course of business or to secure first negotiation and/or last refusal rights; provided such Distributor has entered into an Interparty Agreement or intercreditor agreement with the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent; provided , further , that if such Lien is solely a customary “distributor’s lien”, then no Interparty Agreement or intercreditor agreement shall be required (except that if requested by such Distributor, the Administrative Agent shall execute a customary “quiet enjoyment” letter in accordance with Section 8.12);

(h)      Liens granted in favor of an Approved Co-Financier in connection with a Co-Financed Picture; provided , that such Liens shall be subject to a Co-Financing Intercreditor Agreement and otherwise consistent with the requirements set forth in Section 6.23;

(i)      Liens to secure transactions permitted under Section 6.8 (including, in the case of transactions contemplated by clause (ii) of Section 6.8, liens granted to third parties provided such third party liens are (A) assigned to a Credit Party, and (B) are expressly subject and subordinate to the liens in such Picture held by the Administrative Agent and, if applicable, any Credit Party);

(j)      existing Liens listed on Schedule 6.2(j) ;

(k)      Liens granted in connection with purchase money Indebtedness, including refinancings thereof, permitted under Section 6.1(g); provided , that such Liens only cover the property so purchased, are reasonably acceptable to the Administrative Agent, and the Indebtedness secured thereby does not exceed the acquisition cost of the particular assets acquired;

(l)      possessory Liens (other than those of Laboratories and production houses) that (i) occur in the ordinary course of business, (ii) secure normal trade debt which is not yet due and payable, and (iii) do not secure Indebtedness;

(m)      deposits (i) under worker’s compensation, unemployment insurance, old age pensions and other Social Security laws or (ii) to secure statutory obligations, or surety, appeal, performance or other similar bonds (other than completion bonds) and other obligations of a like nature, in each case incurred in the ordinary course of business;

(n)      Liens in favor of an Approved Completion Guarantor in connection with a Picture to secure the rights of such Approved Completion Guarantor to recoup its contributions to the Negative Cost of such Picture pursuant to the terms of the applicable Approved Completion Bond, subject to an Interparty Agreement;

(o)      Liens on cash collateral posted in lieu of providing a letter of credit (provided


a letter of credit could otherwise have been issued);

(p)      Liens in favor of licensors of Negative Pick-Up Obligations (to the extent granted pursuant to a negative pick-up agreement executed prior to the Closing Date) to secure obligations of Credit Parties thereunder; provided , that such licensor shall have agreed (in a form reasonably acceptable to the Administrative Agent) to provide the Administrative Agent with a notice of default with respect to any such obligations and a reasonable opportunity to cure;

(q)      Liens securing Indebtedness permitted under Section 6.1(k), (l) or (m); provided that Liens securing Foreign Rights Loans shall be subject to an Interparty Agreement with the Foreign Rights Lender;

(r)      Liens granted by Co-Financing Venture Entities (i) to the Approved Domestic Distributor which are customary, protective “distributor liens” over the domestic distribution rights in a Picture to secure its distribution rights and right to receive related distribution fees and expenses, (ii) to an Approved Co-Financing Venture Counterparty or any Affiliate thereof to secure advances of P&A expenses made by such Approved Co-Financing Venture Counterparty or any Affiliate in connection with the applicable Picture, which Lien shall be pari passu with the Approved Domestic Distributor’s lien securing such entity’s entitlement to recoup such P&A expenses or (iii) which are customary, protective “distributor liens” over the licensed foreign distribution rights to secure distribution rights granted to such Credit Party and the rights of such Credit Party to receive its related fees and expenses;

(s)      Liens granted by a Co-Financing Venture Entity in favor of an Approved Co Financing Venture Counterparty or as otherwise reasonably approved by the Administrative Agent, in each case as part of an Approved Co-Financing Venture Transaction, provided , that such Liens are subject to a Co-Financing Venture Interparty Agreement;

(t)      Liens granted by a Co-Financing Venture Entity in accordance with paragraphs 9, 10 and 11(b) of Schedule 3 hereto;

(u)      Liens securing the Existing Comerica Loan Facility;

(v)      Liens securing loans pursuant to Section 6.1(u); provided , that such Liens are limited to the proceeds of the applicable subsidy or soft money benefit and do not extend to other assets, including other rights in or to the Picture;

(w)      Liens granted by a Foreign Rights Borrower or Co-Financing Venture Entity in favor of a Credit Party;

(x)      Liens granted by a Special Purpose Producer, Borrower or Summit Distribution, LLC to secure Indebtedness incurred by such Special Purpose Producer pursuant to Section 6.1(l); provided that each such Lien shall be limited to the rights in the applicable Unreleased Picture or New Picture (each as defined in the Services Agreement) being financed by such Indebtedness;

(y)      customary Liens granted to a third party licensor to secure its rights in connection with “rent-a-system” Pictures; provided , that in any such arrangement entered into after the Closing Date, the Servicer shall be responsible for funding all of the distributor’s obligations thereunder, and no Credit Party shall have any liability thereunder;

(z)      any Lien in connection with a Picture to which a Credit Party obtains a license of rights, to the extent granted by the licensor of such rights in favor of a guarantor of completion of such Picture or a third party lender financing the production of such Picture by such licensor, provided that (i) such Lien is terminated with respect to the Credit Party's rights in and to the Picture on the later to occur of (a) such rights fully vesting in such Credit Party, and (b) such Credit Party paying the fixed mandatory payment to acquire such rights (the “ Credit Party Acquisition Date ”), or (ii) the holder of such Lien enters into a customary non-disturbance or other agreement reasonably satisfactory to the Administrative Agent to the effect that such Credit Party’s licensed rights will not be terminated or disturbed in any exercise of remedies with respect to such Lien at any time on or after the Credit Party Acquisition Date;

(aa)      Liens granted by a Credit Party or a Subsidiary of a Credit Party in its capacity as a licensing intermediary or sales agent with respect to a Picture or group of Pictures granted prior to April 18, 2007 and with respect to which no Credit Party has a material economic ownership interest; and

(bb)      Liens granted by the Borrower in favor of Servicer pursuant to the Services Agreement, which shall be subject to the LG Intercreditor Agreement.

SECTION 6.3      Limitation on Guaranties . Incur, create, assume or suffer to exist any Guaranty (including any obligation as a general partner of a partnership or as a joint venturer of a joint venture in respect of Indebtedness of such partnership or joint venture), either directly or indirectly, except for the following, in each case (other than clauses (a), (b), (c), (d), (e), (f), (g) and, to the extent related to Breaking Dawn 2 or any Picture that has been Released prior to the Closing Date, (h) below) which are incurred, created or assumed no later than the Closing Date:

(a)      performance guarantees in the ordinary course of business under guild agreements, or to suppliers, talent, licensees or laboratories which are providing services in connection with the production, acquisition, distribution or exploitation of any Picture by or for a Credit Party or any of its Subsidiaries;

(b)      the endorsement of negotiable instruments for deposit or collection in the ordinary course of business;

(c)      the Guaranties made by the Guarantors pursuant to Article 9;

(d)      customary Guaranties in connection with participations and deferments;

(e)      Guaranties of obligations of a Credit Party or Licensing Intermediary that the guarantor could have incurred directly as a primary obligor without violating the terms of any Fundamental Document;

(f)      existing Guaranties listed on Schedule 6.3 , and any extensions and renewals thereof acceptable to the Administrative Agent;

(g)      with respect to a Picture financed in part by a Foreign Rights Loan, guarantees by the Borrower, in favor of the applicable Foreign Rights Lender, of delivery of such Picture to foreign Distributors who are contractually obligated to pay minimum guarantees following such delivery, provided that such guarantees (i) shall be subject to the prior completion and delivery of such Picture to Summit Distribution, LLC pursuant to an Approved Completion Bond and (ii) shall only be effective with respect to territories not covered by such Approved Completion Bond; and

(h)      Guaranties of payment of an item of Negative Cost that could have been incurred directly.

SECTION 6.4      Limitations on Investments . Create, make or incur any Investment after the date hereof, except for the following, in each case (other than clauses (a), (b), (c), (d), (h)(i), (i)(ii), (j), (k), (l) and (n) below) which are created, made or incurred no later than the Closing Date:

(a)      Investments in Cash Equivalents;

(b)      to the extent constituting Investments, Guaranties permitted under Section 6.3;

(c)      Investments in or to any other Credit Party;

(d)      to the extent constituting Investments, inter-company Indebtedness permitted under Section 6.1(d);

(e)      existing Investments listed on Schedule 6.4 ;

(f)      Investments (i) of cash by Credit Parties in Non-Theatrical Subsidiaries; and (ii) by Credit Parties in Non-Theatrical Subsidiaries by contributing or otherwise transferring to such Non-Theatrical Subsidiary applicable rights with respect to a property for the purpose of the production of television-related product or live stage performance by such Non-Theatrical Subsidiary; provided , that the aggregate amount of such Investments pursuant to clauses (i) and (ii) above shall not exceed $7,500,000 in the aggregate in any calendar year;

(g)      cash Investments in Special Purpose Producers with respect to a new Picture; provided that the amount of such Investments shall not exceed $[**] in any calendar year or $[**] in the aggregate;

(h)      Investments in a Co-Financing Venture Entity (i) by contributing or otherwise transferring to such Co-Financing Venture Entity applicable rights with respect to a Picture to be produced, acquired or financed by such Co-Financing Venture Entity, or (ii) to finance a Credit Party’s share of the Negative Cost of a Picture pursuant to a Co-Financing

Venture Agreement; provided the amounts invested by a Credit Party are deposited into a Production Account for such Picture

(i)      Investments of cash by a Credit Party in or to a Co-Financing Venture Entity in an amount not to exceed the sum of (i) the Credit Parties’ portion of the Bonded Budget for a Picture to be produced or acquired by such Co-Financing Venture Entity, or such greater amount as shall be required to Complete such Picture if any other applicable co-financier defaults on its payment obligations pursuant to such Approved Co-Financing Venture Transaction and as a result of such over-funding the Credit Parties will be entitled to a corresponding pro rata increased share of the proceeds of such Picture, in each case so long as the use of investment proceeds by such Co-Financing Venture Entity is covered by an Approved Completion Bond, plus (ii) the Credit Parties’ share of any nominal administrative costs to be incurred in connection with the formation and maintenance of such Co-Financing Venture Entity;

(j)      contributions of, or other transfers of, foreign distribution rights for a Picture to a Foreign Rights Borrower in connection with a Foreign Rights Loan;

(k)      Investments received in settlement of delinquent obligations arising in the ordinary course of business;

(l)      Investments in a Foreign Rights Borrower or the production services company formed in connection with production of a Picture for which such Foreign Rights Borrower is obtaining a Foreign Rights Loan (i) by contributing or otherwise transferring to such Foreign Rights Borrower or production services company the rights required to allow the Picture to be produced or financed by such Foreign Rights Borrower or production services company (provided that the copyright and U.S. distribution rights not be so transferred and shall be held by a Credit Party), or (ii) to finance the portion of the Negative Cost of a Picture not otherwise financed from the proceeds of a Foreign Rights Loan or other sources; provided , the amounts invested by a Credit Party are deposited into a Production Account for such Picture;

(m)      Investments in a Person received as partial consideration for the license of distribution rights in a Picture or Pictures to such Person; provided , that such Investments shall not exceed $3,000,000 in the aggregate (unless agreed by the Administrative Agent, in which case such Investments shall not exceed $10,000,000 in the aggregate);

(n)      cash Investments in International Distribution Company, LLC not to exceed $1,000,000 per calendar year; and

(o)      any Investment received as consideration in an LG Rights Sales Transaction.

SECTION 6.5      Restricted Payments . Pay or declare or enter into any agreement to pay or otherwise become obligated to make any Restricted Payment, other than:

(a)      dividends or distributions payable to a Credit Party solely in additional Equity Interests of a Credit Party; provided , that such Equity Interests (other than Equity Interests of the Borrower) are pledged to the Administrative Agent (for the benefit of the Secured Parties) as

additional Pledged Securities;

(b)      cash dividends or distributions to a Credit Party;

(c)      so long as no Default or Event of Default shall have occurred and be continuing, payments of Permitted Distributions and Permitted Tax Distributions; provided , that in the case of Permitted Tax Distributions the Borrower shall provide to the Administrative Agent at least five (5) Business Days prior to making an associated Permitted Tax Distribution a certificate showing the calculation of such Permitted Tax Distribution, including a reasonably detailed statement of the amounts described in paragraph (b) of the definition of “Permitted Tax Distributions”;




Share with your friends:
1   ...   80   81   82   83   84   85   86   87   ...   105




The database is protected by copyright ©essaydocs.org 2020
send message

    Main page