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F-66



Table of Contents

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS(Continued)


26. Related Party Transactions
Sobini Films
In November 2011, the Company entered into a distribution agreement with Sobini Films pursuant to which the Company acquired certain North American distribution rights to the film Sexy Evil Genius . Scott Paterson, a director of the Company, is an investor in Sexy Evil Genius . During the year ended March 31, 2012, the Company did not make any payments to Sobini Films under this agreement.
Thunderbird Films
In March 2012, the Company announced that it had entered into a partnership with Thunderbird Films, a television production, distribution and financing company, to produce programming for broadcast and cable networks. Frank Giustra, a director and former founder of the Company, owns an interest in Thunderbird Films. The venture, Sea To Sky Entertainment (“Sea to Sky”), will generate a broad range of scripted programming for mainstream commercial audiences in the U.S. and Canada. Sea To Sky, which will be jointly managed, will share production and distribution costs for series picked up by television networks, allowing co-funding of network television programming while mitigating risk. During the year ended March 31, 2012, the Company did not make any payments to Thunderbird Films under this arrangement.
Icon International
In April 2012, the Company entered into a three year vendor subscription agreement (the “Vendor Agreement”) with Icon International, Inc. (“Icon”), a company which directly reports to Omnicom Group, Inc. Daryl Simm, a director of the Company, is the Chairman and Chief Executive Officer of Omnicom Media Group, a division of Omnicom Group, Inc. Under the Vendor Agreement, the Company agreed to purchase media advertising of approximately $7.6 million per year through Icon, and Icon agreed to reimburse the Company for certain operating expenses of approximately $1.3 million per year. The actual amount of media advertising to be purchased is determined using a formula based upon values assigned to various types of advertising, as set forth in the Vendor Agreement. For accounting purposes, the operating expenses incurred by the Company will continue to be expensed in full and the reimbursements from Icon of such expenses will be treated as a discount on media advertising and will be reflected as a reduction of advertising expense as the media advertising costs are incurred by the Company. The Vendor Agreement may be terminated by the Company effective as of any Vendor Agreement year end with six months' notice.
During the year ended March 31, 2012 , under a previous vendor agreement with Icon (which expired in the fourth quarter of fiscal 2012), Icon paid the Company $1.0 million ( 2011 — $1.3 million , 2010 — $1.2 million ). During the year ended March 31, 2012 , the Company incurred $8.6 million in media advertising expenses with Icon under the previous vendor Agreement ( 2011 — $7.8 million , 2010 — $7.2 million ).

Other Transactions with Equity Method Investees

      FEARnet. During the year ended March 31, 2012 , the Company recognized $1.9 million in revenue pursuant to the five-year license agreement with FEARnet ( 2011 — $3.2 million , 2010 — $2.2 million ), and held accounts receivable due from FEARnet pursuant to the agreement of $0.5 million ( 2011 — $0.3 million ).

      Roadside. During the year ended March 31, 2012 , the Company recognized $6.4 million in revenue from Roadside in connection with the release of certain theatrical titles ( 2011 — nil , 2010 — nil ), and held accounts receivable due from Roadside of $4.1 million ( 2011 — nil ). During the year ended March 31, 2012 , the Company recognized $12.1 million in distribution and marketing expenses paid to Roadside in connection with the release of certain theatrical titles ( 2011 — $0.5 million , 2010 — less than $0.1 million ). During the year ended March 31, 2012 , the Company made $5.7 million in participation payments to Roadside in connection with the distribution of certain theatrical titles ( 2011 — $10.4 million , 2010 — $3.1 million ).

      Break Media. During the year ended March 31, 2012 , the Company recognized $1.9 million in interest income associated with a $15.7 million note receivable from Break Media, see Note 8 ( 2011 — $1.6 million , 2010 — $0.6 million ).

      EPIX. During the year ended March 31, 2012 , the Company recognized $70.3 million of revenue from EPIX in connection with the licensing of certain theatrical releases and other films and television programs, see Note 7 ( 2011 — $89.4 million , 2010 — $38.6 million ). As of March 31, 2012 , the Company held $24.1 million of accounts receivables from EPIX ( 2011 — $25.9 million ). In addition, as of March 31, 2012 , the Company had $6.4 million in deferred revenue from EPIX ( 2011 — $2.4 million ).
F-67


Table of Contents

LIONS GATE ENTERTAINMENT CORP.

NOTES TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS(Continued)

      TV Guide Network. During the year ended March 31, 2012 , the Company recognized $2.9 million of revenue ( 2011 — $14.9 million , 2010 — $0.3 million ) from TV Guide Network in connection with the licensing of certain films and/or television programs, see Note 7. Additionally, the Company recognized $15.1 million of income for the accretion of the dividend and discount of the mandatorily redeemable preferred stock units as equity interest income ( 2011 — $14.1 million , 2010 — $10.5 million ). Also, during the year ended March 31, 2011 , the Company received a pay-out of accreted interest on the mandatorily redeemable preferred stock units of $10.2 million . As of March 31, 2012 , the Company held $13.5 million of accounts receivables from TV Guide Network ( 2011 — $12.7 million ).


F-68

Exhibit 10.7
Director Compensation Summary
In April 2012, the Compensation Committee of the Board of Directors (the “Board”) engaged Pearl Meyer & Partners (“PM&P”) to review the compensation provided to members of the Company's Board who are not employees of Lionsgate (the “Non-Employee Directors”). In conducting its assessment, PM&P reviewed the following: (i) the components of the Company's then-current Non-Employee Director compensation program (which included an annual Non-Employee Director retainer, per meeting Board fees, committee compensation and past grants of equity awards); (ii) the Company's non-executive chairman compensation relative to the Company's Non-Employee director compensation; (iii) the general structure of the Board (including past and projected time commitments for service on the Board); and (iv) Non-Employee Director compensation among two comparator groups consisting of (a) a group of general industry companies with revenues ranging from $750 million to $3 billion and (b) a select group of eight companies within the broader media and leisure product industries. PM&P's assessment found the Company's then-current non-employee director compensation levels to be in the bottom quartile of the comparators.
Based on PM&P's assessment and as recommended and approved by the Compensation Committee and the Board at meetings held in May 2012, effective May 24, 2012, the Non-Employee Directors are entitled to receive an annual retainer of $50,000, an equivalent of $50,000 in the form of restricted share units to be granted annually on the date of the Company's Annual General Meeting of Shareholders and a fee of $1,400 for each meeting of a committee on which a Non-Employee Director is a member and attends, in person via teleconference or via videoconference. The restricted share units vest in annual installments over three years following the date of grant and are paid upon vesting in an equivalent number of Lionsgate common shares (the “Shares”). Additionally, the non-employee Chairman of the Board is entitled to receive an additional annual retainer of $52,000, the Chairman of the Audit Committee of the Board is entitled to receive an additional annual retainer of $15,000, and the Chairman of the Compensation Committee of the Board, the Chairman of the Nominating and Corporate Governance Committee of the Board, and the Chairman of the Strategic Advisory Committee of the Board are each entitled to receive an additional annual retainer of $10,000. Resulting fiscal year 2013 compensation levels are projected to be at the 30 th percentile of comparators,
The retainers and fees for the Non-Employee Directors are paid, at the director's election, either 50% in cash and 50% in the form of Lionsgate Shares or 100% in the form of Shares. Retainers are paid in two installments each year, with the number of Shares to be delivered in payment of any retainer to be determined by dividing the dollar amount of the retainer to be paid in the form of Shares by the average closing price of Shares for the previous five business days prior to payment.
Lionsgate requires that Non-Employee Directors maintain an ownership position in Lionsgate of at least $150,000 of Shares; provided, however, that new directors shall have three years from their initial election to the Board to reach this ownership threshold. Pursuant to Lionsgate's policies, directors are also reimbursed for reasonable expenses incurred in the performance of their duties.


Exhibit 10.87
Portions of this document have been redacted pursuant to a Request for Confidential Treatment filed with the

Securities and Exchange Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as

amended. Redacted portions are indicated with the notation “[**]”.
EXECUTION VERSION

AMENDED AND RESTATED CREDIT, SECURITY,

GUARANTY AND PLEDGE AGREEMENT

Dated as of February 21, 2012

among

SUMMIT ENTERTAINMENT, LLC

as Borrower,



THE GUARANTORS REFERRED TO HEREIN ,

THE LENDERS REFERRED TO HEREIN ,

and


JPMORGAN CHASE BANK, N.A.

as Administrative Agent



________________














 

J.P. MORGAN SECURITIES LLC,

BARCLAYS CAPITAL

and

JEFFERIES FINANCE LLC

as Joint Syndication Agents, Co-Lead Arrangers and Joint Bookrunners

 



TABLE OF CONTENTS








1.

DEFINITIONS    2










SECTION 1.1

Terms Generally    2










SECTION 1.2

Definitions    2










2.

AMOUNT AND TERMS OF THE COMMITMENTS AND LOANS    41










SECTION 2.1

Commitments and Loans    41










SECTION 2.2

Notes    42










SECTION 2.3

Interest on Loans    42










SECTION 2.4

Fees    42










SECTION 2.5

Default Interest; Alternate Rate of Interest    43










SECTION 2.6

Continuation and Conversion of Loans    43










SECTION 2.7

Voluntary and Mandatory Prepayment of Loans; Reimbursement of Lenders    44










SECTION 2.8

Increased Costs    48










SECTION 2.9

Change in Legality    50










SECTION 2.10

Manner of Payments    50










SECTION 2.11

Taxes    50










SECTION 2.12

Interest Adjustments    52










SECTION 2.13

Defaulting Lenders    53










SECTION 2.14

Replacement of Lenders    54










3.

REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES    54










SECTION 3.1

Existence and Power    54










SECTION 3.2

Authority and No Violation    55










SECTION 3.3

Governmental Approval    55










SECTION 3.4

Binding Agreements    56










SECTION 3.5

Financial Statements    56










SECTION 3.6

No Material Adverse Change    56










SECTION 3.7

Ownership of Pledged Securities, Subsidiaries, etc    56










SECTION 3.8

Copyrights, Trademarks and Other Rights    57










SECTION 3.9

Fictitious Names    58










SECTION 3.10

Title to Properties    58










SECTION 3.11

Chief Executive Office; Location of Collateral; Tax

Identification Number    58








SECTION 3.12

Litigation    59










SECTION 3.13

Federal Reserve Regulations    59










SECTION 3.14

Investment Company Act    59










SECTION 3.15

Taxes    59










SECTION 3.16

Compliance with ERISA    59










SECTION 3.17

Agreements    60










SECTION 3.18

Security Interest    60










SECTION 3.19

Environmental Liabilities    61










SECTION 3.20

Pledged Securities    61










SECTION 3.21

Compliance with Laws    62










SECTION 3.22

Subsidiaries    62










SECTION 3.23

Solvency    62










SECTION 3.24

True and Complete Disclosure    63










SECTION 3.25

Status as a Pass-Through Entity    63










SECTION 3.26

Excluded Subsidiaries    63










SECTION 3.27

Representations on behalf of Excluded Subsidiaries    63










4.

CONDITIONS OF LENDING    64










SECTION 4.1

Conditions Precedent to Loan    64










SECTION 4.2

Conditions Precedent in connection with Pictures    68










SECTION 4.3

Conditions Precedent to the Extension of the Loan    69










5.

AFFIRMATIVE COVENANTS    70










SECTION 5.1

Financial Statements, Reports and Audits    70










SECTION 5.2

Corporate Existence; Compliance with Laws    73










SECTION 5.3

Maintenance of Properties    74










SECTION 5.4

Notice of Material Events    74










SECTION 5.5

Insurance    75










SECTION 5.6

[Intentionally omitted]    76










SECTION 5.7

Copyrights and Trademarks    76










SECTION 5.8

Books and Records; Examination    77










SECTION 5.9

Audit Rights    78










SECTION 5.10

Observance of Agreements    78










SECTION 5.11

Laboratories; No Removal    78










SECTION 5.12

Taxes and Charges; Indebtedness in Ordinary Course of Business    79










SECTION 5.13

Liens    80










SECTION 5.14

Further Assurances; Security Interests    80










SECTION 5.15

ERISA Compliance and Reports    80










SECTION 5.16

Environmental Laws    81










SECTION 5.17

Use of Proceeds    82










SECTION 5.18

Distribution Agreements; Letters of Credit    82










SECTION 5.19

Location of Production Accounts    83










SECTION 5.20

Subsidiaries    83










SECTION 5.21

Picture Documents    84










SECTION 5.22

Facility Rating    85










SECTION 5.23

Residual Calculations    85










SECTION 5.24

Affirmative Covenants with respect to Excluded Subsidiaries

and Co-Financing Joint Venture Entities    85








SECTION 5.25

Third Party Agreements    86










SECTION 5.26

Post-Closing Requirements    86










6.

NEGATIVE COVENANTS    86










SECTION 6.1

Limitations on Indebtedness    87










SECTION 6.2

Limitations on Liens    88










SECTION 6.3

Limitation on Guaranties    92










SECTION 6.4

Limitations on Investments    92










SECTION 6.5

Restricted Payments    94










SECTION 6.6

Consolidation, Merger or Sale of Assets, etc    95










SECTION 6.7

Receivables    95










SECTION 6.8

Sale and Leaseback; Other Tax Motivated Transactions    95










SECTION 6.9

Places of Business; Change of Name, Jurisdiction    96










SECTION 6.10

Limitations on Capital Expenditures    96










SECTION 6.11

Transactions with Affiliates    96










SECTION 6.12

Business Activities    96










SECTION 6.13

Fiscal Year End    97










SECTION 6.14

Bank Accounts    97










SECTION 6.15

ERISA Compliance    97










SECTION 6.16

Hazardous Materials    98










SECTION 6.17

Use of Proceeds    98










SECTION 6.18

Swap Agreements    98










SECTION 6.19

Subsidiaries    98










SECTION 6.20

Amendment, Modification or Termination of Material Agreements    98










SECTION 6.21

No Negative Pledge    99










SECTION 6.22

Negative Pick-Up Obligation    99










SECTION 6.23

Co-Financed Pictures    100










SECTION 6.24

Picture Requirements    100










SECTION 6.25

Liquidity Ratio    100










SECTION 6.26

Breaking Dawn 2 Liquidity; Co-Financing Liquidity    100










SECTION 6.27

Fixed Charge Coverage Ratio    101










SECTION 6.28

No Adverse Selection    101










SECTION 6.29

No Election to be Treated as a Corporation    101










SECTION 6.30

Overhead Covenant    101










SECTION 6.31

Negative Covenants with respect to Excluded Subsidiaries and

Co-Financing Joint Venture Entities    101








7.

EVENTS OF DEFAULT    102










SECTION 7.1

Events of Default    102










SECTION 7.2

Right to Cure    105










8.

GRANT OF SECURITY INTEREST; REMEDIES    105










SECTION 8.1

Security Interests    105










SECTION 8.2

Use of Collateral    105










SECTION 8.3

Collection Accounts    105










SECTION 8.4

Credit Parties to Hold in Trust    107










SECTION 8.5

Collections, etc    107










SECTION 8.6

Possession, Sale of Collateral, etc    107










SECTION 8.7

Application of Proceeds after Event of Default    109










SECTION 8.8

Power of Attorney    109










SECTION 8.9

Financing Statements; Direct Payments    110










SECTION 8.10

Termination and Release    110










SECTION 8.11

Remedies Not Exclusive    110










SECTION 8.12

Quiet Enjoyment    111










SECTION 8.13

Continuation and Reinstatement    111










9.

GUARANTY OF GUARANTORS    111










SECTION 9.1

Guaranty    111










SECTION 9.2

No Impairment of Guaranty, etc    113










SECTION 9.3

Continuation and Reinstatement, etc    113










SECTION 9.4

Limitation on Guaranteed Amount, etc    114










10.

PLEDGE    114










SECTION 10.1

Pledge    114










SECTION 10.2

Covenant    114










SECTION 10.3

Registration in Nominee Name; Denominations    114










SECTION 10.4

Voting Rights; Dividends; etc    115










SECTION 10.5

Remedies Upon Default    115










SECTION 10.6

Application of Proceeds of Sale and Cash    117










SECTION 10.7

Securities Act, etc    117










SECTION 10.8

Continuation and Reinstatement    118










SECTION 10.9

Termination    118










SECTION 10.10

Transfer of Pledged Securities    118










11.

CASH COLLATERAL    118










SECTION 11.1

Cash Collateral Accounts    118










SECTION 11.2

Investment of Funds    119










SECTION 11.3

Grant of Security Interest    119










SECTION 11.4

Remedies    119










12.

THE ADMINISTRATIVE AGENT    120










SECTION 12.1

Administration by the Administrative Agent    120










SECTION 12.2

Payments    122










SECTION 12.3

Sharing of Setoffs and Cash Collateral    122










SECTION 12.4

Notice to the Lenders    123










SECTION 12.5

Liability of the Administrative Agent    123










SECTION 12.6

Reimbursement and Indemnification    124










SECTION 12.7

Rights of Administrative Agent    124










SECTION 12.8

Independent Investigation by Lenders    124










SECTION 12.9

Agreement of Required Lenders    124










SECTION 12.10

Notice of Transfer    125










SECTION 12.11

Successor Administrative Agent    125










SECTION 12.12

Other Agent Titles    125










13.

MISCELLANEOUS    125










SECTION 13.1

Notices    126










SECTION 13.2

Survival of Agreement, Representations and Warranties, etc    127










SECTION 13.3

Successors and Assigns; Syndications; Loan Sales; Participations    127










SECTION 13.4

Expenses; Documentary Taxes    130










SECTION 13.5

Indemnity    131










SECTION 13.6

CHOICE OF LAW    132










SECTION 13.7

WAIVER OF JURY TRIAL    132










SECTION 13.8

WAIVER WITH RESPECT TO DAMAGES    133










SECTION 13.9

No Waiver    133










SECTION 13.10

Amendments, etc    133










SECTION 13.11

Severability    134










SECTION 13.12

SERVICE OF PROCESS; SUBMISSION TO JURISDICTION    134










SECTION 13.13

Headings    136










SECTION 13.14

Execution in Counterparts    136










SECTION 13.15

Subordination of Inter-Company Indebtedness, Receivables

and Advances    136








SECTION 13.16

USA Patriot Act    136










SECTION 13.17

Entire Agreement    136










SECTION 13.18

Confidentiality    137










SECTION 13.19

Platform; Materials    137










SECTION 13.20

Foreign Rights Loans    138










SECTION 13.21

Unwind of Foreign Rights Loans    138










SECTION 13.22

Servicer    138










SECTION 13.23

Services Agreement    138










SECTION 13.24

Non-Recourse    138










SECTION 13.25

Reorganization of Ownership of Borrower and Release of

LGAC as a Credit Party    139








SECTION 13.26

Effect of Amendment and Restatement of the Initial 2012

Credit Agreement    140

Schedules :







1

Schedule of Commitments







1.1

Approved Co-Financiers







3

Co-Financing Venture Terms and Conditions







3.1

List of Jurisdictions







3.2(b)

Restrictions on Transfer of Pledged Securities







3.7(a)

Ownership of Equity Interests of the Credit Parties







3.7(b)

Ownership of Pledged Securities other than Credit Parties







3.7(c)

Organizational Chart







3.8(a)

Pictures







3.8(b)

Trademarks







3.8(c)

Applications and Registrations Not in Full Force and Effect







3.9

Fictitious Names







3.11

Chief Executive Office; Location of Collateral and Records; Tax Identification      Numbers







3.12

Litigation







3.16

ERISA Plans







3.17

Agreements







3.18

Filing Offices for UCC-1 Financing Statements







3.19

Environmental Liabilities







3.22

Subsidiaries







3.26

Excluded Subsidiaries







5.19

Production Account Banks







6.1

Existing Indebtedness







6.2(j)

Existing Liens







6.3

Existing Guaranties







6.4

Existing Investments







6.11

Transactions with Affiliates







6.14

Bank Accounts







6.23

Approved Co-Financing Transactions







10.1

Initial Pledged Securities


Exhibits :







A

Form of Note







B-1

Form of Copyright Security Agreement







B-2

Form of Copyright Security Agreement Supplement







C

Form of Trademark Security Agreement







D-1

Form of Pledgeholder Agreement (Uncompleted Picture)







D-2

Form of Pledgeholder Agreement (Completed Picture)







E

Form of Laboratory Access Letter







F

Form of Borrowing Notice







G

Form of Assignment and Assumption







H

Form of Instrument of Assumption and Joinder

I        Form of Notice of Assignment and Irrevocable Instructions

J        Form of Asset Coverage Certificate

K        Form of Liquidity Certificate

L        Form of Contribution Agreement

M        Form of Withholding Tax Statement (Foreign Lenders)

N-1        Form of Refinancing Notice (No Acknowledgment)

N-2        Form of Refinancing Notice (With Acknowledgment)

O        Form of Solvency Certificate







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