Distribution Agreements. (a) As of the Closing Date, the Borrower or a Licensing Intermediary (or the Sales Agent, on behalf of the Borrower or a Licensing Intermediary) has entered into the Current Distribution Agreements. The Borrower will not enter into and will not allow the Sales Agent, any Licensing Intermediary or any other Person to enter into any other Distribution Agreement with respect to the Film without the prior written approval of the Lender. (b) The Borrower hereby represents and warrants to the Lender that: (i) the Borrower has delivered to the Lender true and complete copies of the Current Distribution Agreements, the Sales Agency Agreement and the existing Licensing Intermediary Agreements; (ii) each of the Current Distribution Agreements represents a valid and binding agreement, enforceable against the applicable Distributor, in accordance with its terms; (iii) each future Distribution Agreement will represent, a valid and binding agreement, enforceable against the applicable Distributor in accordance with its terms; (iv) no credit, discount, or extension, or agreement therefor will be granted on the Current Distribution Agreements or any other Distribution Agreement without the prior written consent of the Lender; (v) each copy of an invoice delivered to the Lender by the Borrower will be a genuine copy of the original invoice (if any) sent to the applicable Distributor and/or any other Person; and (vi) each of the Current Distribution Agreements that is not marked with an asterisk on Schedule 2 hereto constitutes an Acceptable Distribution Agreement. (c) The Borrower shall use its best efforts to itself, or cause a Licensing Intermediary to, enter into Distribution Agreements (or cause the Sales Agent on behalf of the Borrower or a Licensing Intermediary, solely with respect to the Sales Agent Territory) with respect to all territories, media, and markets throughout the world. The Borrower shall not (and shall not allow Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement which does not meet all of the requirements for an Acceptable Distribution Agreement, and without limiting the generality of the foregoing, each Acceptable Distribution Agreement shall be documented with terms acceptable to the Lender and, if required by the Lender, supported by an Acceptable L/C. The Lender’s determination that a Distribution Agreement is an Acceptable Distribution Agreement shall be evidenced only by the Lender’s written approval. The Borrower shall not (and shall not authorize Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement with an Unacceptable Distributor. (d) The Borrower shall (or shall cause the Sales Agent to) deliver to the Lender, within five (5) Business Days after the same are executed, complete original copies of all Distribution Agreements entered into by the Borrower or a Licensing Intermediary (or by Sales Agent, on behalf of the Borrower or a Licensing Intermediary) after the date hereof, and shall cause all Distributors to execute and deliver to the Lender a Notice of Assignment and (if required by the Lender) an Acceptable L/C concurrently therewith. (e) With respect to any proposed Distribution Agreement, the Borrower shall: (i) send or shall cause to be sent to the Lender during normal business hours (i.e., 9:00 a.m. — 5:00 p.m. Pacific time) the proposed Distribution Agreement or a written notice containing the proposed financial terms of such agreement and the proposed Delivery requirements; and (ii) ensure that such proposed Distribution Agreement and the terms thereof: (1) includes a Minimum Guarantee of not less than the “take” or “low” amount of the projected sale for the applicable territory specified in the Sales Estimates (provided that, in the case of the U.S. distribution rights, such Minimum Guarantee shall not be less than $2,500,000 and, in the case of the Canadian distribution rights, such Minimum Guarantee shall not be less than $700,000), (2) indicates that no Person is designated as an essential element other than the Essential Element, (3) is not to be entered into by a Distributor who is an Unacceptable Distributor, and (4) satisfies the other requirements for an Acceptable Distribution Agreement. (f) The first $489,500 of the proceeds of the Initial Advance that is available to reimburse H&W for any of its equity contribution that was used to pay for a portion of its Prior Production Advances (as defined in the Completion Guaranty) shall be remitted to the Collection Account and reserved exclusively by the Lender as cash collateral (the “Distribution Cash Collateral”) to secure (i) the $80,000 Collateral Value attributed by the Lender to the last installment of the Minimum Guarantee payable by Hollywood Classic (the Distributor for the Czech Republic and Hungary) pursuant to its Notice of Assignment and (ii) the $409,500 Collateral Value attributed by the Lender to the last two (2) installments of the Minimum Guarantee payable by Senator Film (the Distributor for Germany) pursuant to its Notice of Assignment. The Distribution Cash Collateral shall be applied against the Obligations on the Termination Date, except as otherwise provided in this Section 6.8(f). (i) After the pending $20,000 balance of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly (A) remit such Pre-Delivery Deposit balance payment (to the extent received in the Collection Account) to H&W and (B) release $80,000 from the Distribution Cash Collateral and remit such sum to H&W; provided, however, if the pending $20,000 balance of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution Agreement; and (ii) (A) After the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; and (B) after the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; provided, however, if (x) the first installment of such Minimum Guarantee was not paid prior to March 15, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then (I) an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default and (II) the Lender shall be entitled to exercise its right under the applicable Notice of Assignment to terminate such Distributor’s Distribution Agreement; and (iii) After the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are received in the Collection Account, the Lender shall promptly release $409,500 from the Distribution Cash Collateral and remit such sum to H&W; provided, however, if either (x) the first installment of such Minimum Guarantee was not paid prior to March 15, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default; and (iv) If the pending $70,000 balance of the Pre-Delivery Deposit that is due from MS Trading (the Distributor for Benelux) pursuant to its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution Agreement. Notwithstanding the foregoing, until the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are paid to the Collection Account, the Lender shall hold back $50,000 from the first portion of the Distribution Cash Collateral and/or any other sums that are to be released to H&W pursuant to this Section 6.8(f) (as applicable) as cash collateral for each Additional Gap Fee. If the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to March 15, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. If the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to April 10, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. All amounts disbursed to H&W pursuant to this Section 6.8(f) shall constitute a reimbursement to H&W of an equivalent amount of its equity contribution that was used to pay for a portion of its Prior Production Advances. (g) The Borrower agrees that, until the Lender Termination Notice is issued, it will not set (nor permit any other Person to set) an initial theatrical release date for the Film (nor make any P&A funds available to TWC) unless: (1) the Gap Amount is $0, and (2) no less than $5,000,000 (or such greater amount that is needed, if applicable, to effectuate a U.S. theatrical release of the Film that satisfies the requirements of this clause (2)) (from sources other than Collateral Proceeds, such as from the proceeds of funding provided by a P&A financier for the film) has been deposited into the P&A Accounts (as defined in the Sales Agent Interparty Agreement) for the exclusive purpose of funding the P&A expenses for the Film that are sufficient to effect a U.S. theatrical release of the Film on a minimum of 200 screens (or such greater number of screens that satisfies the requirements necessary to qualify the Film for TWC’s distribution arrangement with its pay television provider) and (3) the Lender has received a Notice of Assignment executed by TWC and the Approved Licensor (as defined in the Sales Agent Interparty Agreement) (in form and substance acceptable to the Lender subject to good faith negotiation with TWC and, if applicable, subject to the terms of any intercreditor agreement entered into by the Lender and any P&A financier of the Film), and (4) at the time that the Borrower (or any of its Affiliates) is prepared to set the initial theatrical release date for the Film (and provided that the conditions set forth in the foregoing clauses (1) through (3) have been satisfied), none of the events described in Section 10.1(a) of the Sales Agent Interparty Agreement)has occurred with respect to TWC. (h) The Borrower represents and warrants to the Lender that the copy of the TFD/TWC Agreement that Lender has received is a true and complete copy thereof (and there are no side agreements, etc. that have not been disclosed to the Lender), and the Borrower also agrees that no amendment, modification or other supplement to (including any long form version of) the TFD/TWC Agreement (solely to the extent it relates to or affects the Film) is permitted without the Lender’s prior written consent, such consent not to be unreasonably withheld (and any such amendment, modification, long form version or other supplement without Lender’s prior written consent shall be null and void ab initio). (i) Irrespective of whether or not an Event of Default has occurred and is continuing, and notwithstanding any other provision of this Agreement: (i) Provided that all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have first been satisfied to the Lender’s satisfaction by no later than July 31, 2010, and expressly subject to any applicable First Rights of Fox (as such terms are defined in Section 10.21 hereof) with respect to the Film, the Lender approves the licensing of the U.S. Rights to TWC pursuant to the TFD/TWC Agreement (provided, however, that the TFD/TWC Agreement is not approved as an Acceptable Distribution Agreement, and the Borrower expressly acknowledges that the TFD/TWC Agreement does not constitute an Acceptable Distribution Agreement); (ii) If all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010, then the Borrower shall promptly engage a sales agent pre-approved by the Lender (▇▇▇▇▇▇ ▇▇▇▇▇▇ of WME is pre-approved), pursuant to a sales agency agreement in form and substance acceptable to the Lender, to market (in each case, to the extent not yet licensed through either an Acceptable Distribution Agreement or another Distribution Agreement that has been pre-approved in writing by Lender and also subject to any applicable First Rights of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution Agreements (for the avoidance of doubt, those Distribution Agreements must be documented as Acceptable Distribution Agreements, unless otherwise agreed in writing by the Lender), and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Fox does not exercise its right to become the Distributor of the U.S. Rights for the Film, then: (1) the Borrower shall first offer the U.S. Rights to TWC in writing (the “First Offer Notice”); and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWC; and (iii) If (i) all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010 and (ii) the Gap Amount has not been reduced to $0 by December 31, 2010, then the Lender shall have the sole right, in lieu of the Borrower or any other Person, to select a Distributor for (in each case, to the extent not yet licensed through either an Acceptable Distribution Agreement or another Distribution Agreement that has been pre-approved in writing by Lender and also subject to any applicable First Rights of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution Agreements, and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Twentieth Century Fox does not exercise its right to become the Distributor of the U.S. Rights for the Film and TWC has not previously been offered the U.S. Rights pursuant to Section 6.8(i)(ii) above, then: (1) the Borrower shall give the First Offer Notice to TWC; and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWC. The Borrower ratifies all acts of the Lender taken pursuant
Appears in 1 contract
Sources: Loan and Security Agreement (Film Department Holdings, Inc.)
Distribution Agreements. (a) As Set forth on Schedule 4.23 hereto is a complete and accurate list of all Distribution Agreements of the Borrower and each of its Subsidiaries as of the Closing Date, the Borrower or a Licensing Intermediary (or the Sales Agent, on behalf of the Borrower or a Licensing Intermediary) has entered into the Current Distribution Agreements. The Borrower will not enter into and will not allow the Sales Agent, any Licensing Intermediary or any other Person to enter into any other Distribution Agreement with respect to the Film without the prior written approval of the Lender.
(b) The Borrower hereby represents execution, delivery and warrants to the Lender that: (i) the Borrower has delivered to the Lender true and complete copies of the Current Distribution Agreements, the Sales Agency Agreement and the existing Licensing Intermediary Agreements; (ii) each of the Current Distribution Agreements represents a valid and binding agreement, enforceable against the applicable Distributor, in accordance with its terms; (iii) each future Distribution Agreement will represent, a valid and binding agreement, enforceable against the applicable Distributor in accordance with its terms; (iv) no credit, discount, or extension, or agreement therefor will be granted on the Current Distribution Agreements or any other Distribution Agreement without the prior written consent of the Lender; (v) each copy of an invoice delivered to the Lender performance by the Borrower will be a genuine copy and each of its Subsidiaries of the original invoice (if any) sent Distribution Agreements to which it is a party and the applicable Distributor and/or any other Person; and (vi) each consummation of the Current Distribution Agreements that is not marked with an asterisk on Schedule 2 hereto constitutes an Acceptable Distribution Agreement.
(c) The Borrower shall use its best efforts to itself, or cause a Licensing Intermediary to, enter into Distribution Agreements (or cause the Sales Agent on behalf of the Borrower or a Licensing Intermediary, solely with respect to the Sales Agent Territory) with respect to all territories, media, and markets throughout the world. The Borrower shall not (and shall not allow Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement which does not meet all of the requirements for an Acceptable Distribution Agreement, and without limiting the generality of the foregoing, each Acceptable Distribution Agreement shall be documented with terms acceptable to the Lender and, if required transactions contemplated thereby by the Lender, supported by an Acceptable L/C. The Lender’s determination that a Distribution Agreement is an Acceptable Distribution Agreement shall be evidenced only by the Lender’s written approval. The Borrower shall not (and shall not authorize Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement with an Unacceptable Distributor.
(d) The Borrower shall (or shall cause the Sales Agent to) deliver to the Lender, within five (5) Business Days after the same are executed, complete original copies of all Distribution Agreements entered into by the Borrower or a Licensing Intermediary (or by Sales Agent, on behalf of the Borrower or a Licensing Intermediary) after the date hereof, and shall cause all Distributors to execute and deliver to the Lender a Notice of Assignment and (if required by the Lender) an Acceptable L/C concurrently therewith.
(e) With respect to any proposed Distribution Agreement, the Borrower shall: (i) send or shall cause to be sent to the Lender during normal business hours (i.e., 9:00 a.m. — 5:00 p.m. Pacific time) the proposed Distribution Agreement or a written notice containing the proposed financial terms of such agreement and the proposed Delivery requirements; and (ii) ensure that such proposed Distribution Agreement and the terms thereof: (1) includes a Minimum Guarantee of not less than the “take” or “low” amount of the projected sale for the applicable territory specified in the Sales Estimates (provided that, in the case of the U.S. distribution rights, such Minimum Guarantee shall not be less than $2,500,000 and, in the case of the Canadian distribution rights, such Minimum Guarantee shall not be less than $700,000), (2) indicates that no Person is designated as an essential element other than the Essential Element, (3) is not to be entered into by a Distributor who is an Unacceptable Distributor, and (4) satisfies the other requirements for an Acceptable Distribution Agreement.
(f) The first $489,500 of the proceeds of the Initial Advance that is available to reimburse H&W for any of its equity contribution that was used to pay for a portion of its Prior Production Advances (as defined in the Completion Guaranty) shall be remitted to the Collection Account and reserved exclusively by the Lender as cash collateral (the “Distribution Cash Collateral”) to secure (i) the $80,000 Collateral Value attributed by the Lender to the last installment of the Minimum Guarantee payable by Hollywood Classic (the Distributor for the Czech Republic and Hungary) pursuant to its Notice of Assignment and (ii) the $409,500 Collateral Value attributed by the Lender to the last two (2) installments of the Minimum Guarantee payable by Senator Film (the Distributor for Germany) pursuant to its Notice of Assignment. The Distribution Cash Collateral shall be applied against the Obligations on the Termination Date, except as otherwise provided in this Section 6.8(f).Person:
(i) After the pending $20,000 balance of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly do not and will not (A) remit such Pre-Delivery Deposit balance payment (to the extent received in the Collection Account) to H&W and contravene or violate Holdings' or any of its Subsidiaries' respective Constituent Documents, (B) release $80,000 from violate any other Requirement of Law applicable to Holdings or any of its Subsidiaries, or any order or decree of any Governmental Authority or arbitrator, (C) conflict with or result in the Distribution Cash Collateral and remit such sum to H&W; providedbreach of, howeveror constitute a default under, if or result in or permit the pending $20,000 balance termination or acceleration of, any Contractual Obligation of Holdings or any of its Subsidiaries, except for those that in the aggregate would not have a Material Adverse Effect or (D) result in the creation or imposition of any Lien upon any of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to property of Holdings or any of its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution AgreementSubsidiaries; and
(ii) (A) After do not require the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Accountconsent of, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; and (B) after the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Accountauthorization by, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; providedapproval of, howevernotice to, if (x) the first installment of such Minimum Guarantee was not paid prior to March 15or filing or registration with, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then (I) an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default and (II) the Lender shall be entitled to exercise its right under the applicable Notice of Assignment to terminate such Distributor’s Distribution Agreement; and
(iii) After the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are received in the Collection Account, the Lender shall promptly release $409,500 from the Distribution Cash Collateral and remit such sum to H&W; provided, however, if either (x) the first installment of such Minimum Guarantee was not paid prior to March 15, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default; and
(iv) If the pending $70,000 balance of the Pre-Delivery Deposit that is due from MS Trading (the Distributor for Benelux) pursuant to its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution Agreement. Notwithstanding the foregoing, until the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are paid to the Collection Account, the Lender shall hold back $50,000 from the first portion of the Distribution Cash Collateral and/or any other sums that are to be released to H&W pursuant to this Section 6.8(f) (as applicable) as cash collateral for each Additional Gap Fee. If the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to March 15, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. If the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to April 10, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. All amounts disbursed to H&W pursuant to this Section 6.8(f) shall constitute a reimbursement to H&W of an equivalent amount of its equity contribution that was used to pay for a portion of its Prior Production Advances.
(g) The Borrower agrees that, until the Lender Termination Notice is issued, it will not set (nor permit any other Person to set) an initial theatrical release date for the Film (nor make any P&A funds available to TWC) unless: (1) the Gap Amount is $0, and (2) no less than $5,000,000 (or such greater amount that is needed, if applicable, to effectuate a U.S. theatrical release of the Film that satisfies the requirements of this clause (2)) (from sources other than Collateral Proceeds, such as from the proceeds of funding provided by a P&A financier for the film) has been deposited into the P&A Accounts (as defined in the Sales Agent Interparty Agreement) for the exclusive purpose of funding the P&A expenses for the Film that are sufficient to effect a U.S. theatrical release of the Film on a minimum of 200 screens (or such greater number of screens that satisfies the requirements necessary to qualify the Film for TWC’s distribution arrangement with its pay television provider) and (3) the Lender has received a Notice of Assignment executed by TWC and the Approved Licensor (as defined in the Sales Agent Interparty Agreement) (in form and substance acceptable to the Lender subject to good faith negotiation with TWC and, if applicable, subject to the terms of any intercreditor agreement entered into by the Lender and any P&A financier of the Film), and (4) at the time that the Borrower (or any of its Affiliates) is prepared to set the initial theatrical release date for the Film (and provided that the conditions set forth in the foregoing clauses (1) through (3) have been satisfied), none of the events described in Section 10.1(a) of the Sales Agent Interparty Agreement)has occurred with respect to TWC.
(h) The Borrower represents and warrants to the Lender that the copy of the TFD/TWC Agreement that Lender has received is a true and complete copy thereof (and there are no side agreements, etc. that have not been disclosed to the Lender), and the Borrower also agrees that no amendment, modification or other supplement to (including any long form version of) the TFD/TWC Agreement (solely to the extent it relates to or affects the Film) is permitted without the Lender’s prior written consent, such consent not to be unreasonably withheld (and any such amendment, modification, long form version or other supplement without Lender’s prior written consent shall be null and void ab initio).
(i) Irrespective of whether or not an Event of Default has occurred and is continuing, and notwithstanding any other provision of this Agreement:
(i) Provided that all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have first been satisfied to the Lender’s satisfaction by no later than July 31, 2010, and expressly subject to any applicable First Rights of Fox (as such terms are defined in Section 10.21 hereof) with respect to the Film, the Lender approves the licensing of the U.S. Rights to TWC pursuant to the TFD/TWC Agreement (provided, however, that the TFD/TWC Agreement is not approved as an Acceptable Distribution Agreement, and the Borrower expressly acknowledges that the TFD/TWC Agreement does not constitute an Acceptable Distribution Agreement);
(ii) If all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010, then the Borrower shall promptly engage a sales agent pre-approved by the Lender (▇▇▇▇▇▇ ▇▇▇▇▇▇ of WME is pre-approved), pursuant to a sales agency agreement in form and substance acceptable to the Lender, to market (in each case, to the extent not yet licensed through either an Acceptable Distribution Agreement or another Distribution Agreement that has been pre-approved in writing by Lender and also subject to any applicable First Rights of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution Agreements (for the avoidance of doubt, those Distribution Agreements must be documented as Acceptable Distribution Agreements, unless otherwise agreed in writing by the Lender), and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Fox does not exercise its right to become the Distributor of the U.S. Rights for the Film, then: (1) the Borrower shall first offer the U.S. Rights to TWC in writing (the “First Offer Notice”); and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWC; and
(iii) If (i) all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010 and (ii) the Gap Amount has not been reduced to $0 by December 31, 2010, then the Lender shall have the sole right, in lieu of the Borrower Governmental Authority or any other Person, to select a Distributor for other than those which will have been obtained at the Closing Date, each of which will be in full force and effect on the Closing Date.
(c) Each of the Distribution Agreements has been, or at the Closing Date will have been, duly executed and delivered by the Borrower or its Subsidiary that is party thereto and at the Closing Date will be the legal, valid and binding obligation of the Borrower or such Subsidiary, enforceable against the Borrower or such Subsidiary in accordance with its terms.
(d) None of the Distribution Agreements has been amended or modified in any respect and no provision therein has been waived, except in each case, case to the extent not yet licensed through either an Acceptable Distribution Agreement or another Distribution Agreement that has been pre-approved in writing permitted by Lender and also subject to any applicable First Rights Section 8.11 (Modification of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution AgreementsRelated Documents), and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Twentieth Century Fox does not exercise its right to become the Distributor of the U.S. Rights for representations and warranties therein is true and correct in all material respects and no default or event which with the Film and TWC giving of notice or lapse of time or both would be a default has not previously been offered the U.S. Rights pursuant to Section 6.8(i)(ii) above, then:
(1) the Borrower shall give the First Offer Notice to TWC; and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWCoccurred thereunder. The Borrower ratifies all acts of the Lender taken pursuant66
Appears in 1 contract
Sources: Credit Agreement (Aviall Inc)
Distribution Agreements. (a) As Notwithstanding anything in this Agreement to the contrary (including the provisions of the Closing DateSection 6.1), the Borrower or a Licensing Intermediary Company and the Company Subsidiaries shall, in the ordinary course of business consistent with past practices, enter into new Distribution Agreements from time to time during the period prior to the Closing. The Company and the Company Subsidiaries shall (or i) consult with Buyer prior to entering into any such Distribution Agreement and (ii) obtain Buyer’s approval for any such Distribution Agreement not listed on Schedule 6.13
(a) to the Sales Agent, on behalf of the Borrower or a Licensing IntermediaryDisclosure Memorandum and that (x) has is not entered into in the Current Distribution Agreements. The Borrower will not enter into ordinary course and will not allow the Sales Agent, any Licensing Intermediary or any other Person to enter into any other Distribution Agreement consistent with past practice (including with respect to the Film without type of program and scope of rights licensed), (y) does not contain terms with respect to price and duration that are generally consistent with the prior written approval Company’s Distribution Agreements in effect as of the Lenderdate of this Agreement or (z) would require any change to the financial statements, pro forma financial statements or other financial information contained in the Joint Proxy Statement that would require any amendment or supplement to the Joint Proxy Statement. No new Distribution Agreements shall require the consent of any Person to the consummation of the transactions contemplated by this Agreement and shall continue to be in effect without any material changes to the terms thereof following such consummation.
(b) The Borrower hereby represents and warrants At Buyer’s reasonable request, in connection with any Distribution Agreement that requires consent to the Lender that: (i) consummation of the Borrower has delivered transactions contemplated by this Agreement or that otherwise includes Terminable Rights entered into by the Company or any Company Subsidiary and a party not listed on Exhibit 4.11, the Company and the Company Subsidiaries shall prior to Closing use commercially reasonable efforts to obtain any third party consents or approvals for and waiver of the Terminable Rights relating to the Lender true and complete copies of transactions contemplated by the Current Distribution AgreementsAgreement; provided, however, that if the Company or any Company Subsidiary is required to make any payment to any other party to obtain such a consent, approval or waiver as requested by Buyer, the Sales Agency Agreement reasonable costs of any such payment or of seeking or obtaining such consent, approval or waiver shall be borne by Buyer and the existing Licensing Intermediary Agreements; (ii) each of the Current Distribution Agreements represents a valid and binding agreement, enforceable against the applicable Distributor, in accordance with its terms; (iii) each future Distribution Agreement will represent, a valid and binding agreement, enforceable against the applicable Distributor in accordance with its terms; (iv) no credit, discount, shall not constitute Transaction Costs or extension, or agreement therefor will be granted on the Current Distribution Agreements or any other Distribution Agreement without the prior written consent of the Lender; (v) each copy of an invoice delivered to the Lender by the Borrower will be a genuine copy of the original invoice (if any) sent to the applicable Distributor and/or any other Person; and (vi) each of the Current Distribution Agreements that is not marked with an asterisk on Schedule 2 hereto constitutes an Acceptable Distribution AgreementExpense Reimbursement.
(c) The Borrower shall use its best efforts to itself, or cause a Licensing Intermediary to, enter into Distribution Agreements (or cause the Sales Agent on behalf of the Borrower or a Licensing Intermediary, solely with respect to the Sales Agent Territory) with respect to all territories, media, and markets throughout the world. The Borrower shall not (and shall not allow Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement which does not meet all of the requirements for an Acceptable Distribution Agreement, and without limiting the generality of the foregoing, each Acceptable Distribution Agreement shall be documented with terms acceptable to the Lender and, if required by the Lender, supported by an Acceptable L/C. The Lender’s determination that a Distribution Agreement is an Acceptable Distribution Agreement shall be evidenced only by the Lender’s written approval. The Borrower shall not (and shall not authorize Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement with an Unacceptable Distributor.
(d) The Borrower shall (or shall cause the Sales Agent to) deliver to the Lender, within five (5) Business Days after the same are executed, complete original copies of all Distribution Agreements entered into by the Borrower or a Licensing Intermediary (or by Sales Agent, on behalf of the Borrower or a Licensing Intermediary) after the date hereof, and shall cause all Distributors to execute and deliver to the Lender a Notice of Assignment and (if required by the Lender) an Acceptable L/C concurrently therewith.
(e) With respect to any proposed Distribution Agreement, the Borrower shall: (i) send or shall cause to be sent to the Lender during normal business hours (i.e., 9:00 a.m. — 5:00 p.m. Pacific time) the proposed Distribution Agreement or a written notice containing the proposed financial terms of such agreement Company and the proposed Delivery requirements; and (ii) ensure that such proposed Distribution Agreement and the terms thereof: (1) includes a Minimum Guarantee of not less than the “take” or “low” amount of the projected sale for the applicable territory specified in the Sales Estimates (provided thatCompany Subsidiaries shall, in the case ordinary course of the U.S. distribution rightsbusiness consistent with past practice, such Minimum Guarantee shall not be less than $2,500,000 andexercise options or other rights to extend, in the case of the Canadian distribution rights, such Minimum Guarantee shall not be less than $700,000), (2) indicates that no Person is designated as an essential element other than the Essential Element, (3) is not to be entered into by a Distributor who is an Unacceptable Distributor, renew and (4) satisfies the other requirements for an Acceptable change Distribution Agreement.
(f) The first $489,500 of the proceeds of the Initial Advance that is available to reimburse H&W for any of its equity contribution that was used to pay for a portion of its Prior Production Advances (as defined in the Completion Guaranty) shall be remitted Agreements existing prior to the Collection Account and reserved exclusively by Closing Date within the Lender as cash collateral (the “Distribution Cash Collateral”) to secure (i) the $80,000 Collateral Value attributed by the Lender to the last installment of the Minimum Guarantee payable by Hollywood Classic (the Distributor for the Czech Republic and Hungary) pursuant to its Notice of Assignment and (ii) the $409,500 Collateral Value attributed by the Lender to the last two (2) installments of the Minimum Guarantee payable by Senator Film (the Distributor for Germany) pursuant to its Notice of Assignment. The Distribution Cash Collateral shall be applied against the Obligations on the Termination Date, except as otherwise time periods provided in this Section 6.8(f).
(i) After the pending $20,000 balance of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly (A) remit such Pre-Delivery Deposit balance payment (to the extent received in the Collection Account) to H&W and (B) release $80,000 from the Distribution Cash Collateral and remit such sum to H&WAgreements; provided, however, if the pending $20,000 balance of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution Agreement; and
(ii) (A) After the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; and (B) after the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; provided, however, if (x) the first installment of such Minimum Guarantee was not paid prior to March 15, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then (I) an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default and (II) the Lender shall be entitled to exercise its right under the applicable Notice of Assignment to terminate such Distributor’s Distribution Agreement; and
(iii) After the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are received in the Collection Account, the Lender shall promptly release $409,500 from the Distribution Cash Collateral and remit such sum to H&W; provided, however, if either (x) the first installment of such Minimum Guarantee was not paid prior to March 15, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default; and
(iv) If the pending $70,000 balance of the Pre-Delivery Deposit that is due from MS Trading (the Distributor for Benelux) pursuant to its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution Agreement. Notwithstanding the foregoing, until the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are paid to the Collection Account, the Lender shall hold back $50,000 from the first portion of the Distribution Cash Collateral and/or any other sums that are to be released to H&W pursuant to this Section 6.8(f) (as applicable) as cash collateral for each Additional Gap Fee. If the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to March 15, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. If the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to April 10, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. All amounts disbursed to H&W pursuant to this Section 6.8(f) shall constitute a reimbursement to H&W of an equivalent amount of its equity contribution that was used to pay for a portion of its Prior Production Advances.
(g) The Borrower agrees that, until the Lender Termination Notice is issued, it will not set (nor permit any other Person to set) an initial theatrical release date for the Film (nor make any P&A funds available to TWC) unless: (1) the Gap Amount is $0, and (2) no less than $5,000,000 (or such greater amount that is needed, if applicable, to effectuate a U.S. theatrical release of the Film that satisfies the requirements of this clause (2)) (from sources other than Collateral Proceeds, such as from the proceeds of funding provided by a P&A financier for the film) has been deposited into the P&A Accounts (as defined in the Sales Agent Interparty Agreement) for the exclusive purpose of funding the P&A expenses for the Film that are sufficient to effect a U.S. theatrical release of the Film on a minimum of 200 screens (or such greater number of screens that satisfies the requirements necessary to qualify the Film for TWC’s distribution arrangement with its pay television provider) and (3) the Lender has received a Notice of Assignment executed by TWC and the Approved Licensor (as defined in the Sales Agent Interparty Agreement) (in form and substance acceptable to the Lender subject to good faith negotiation with TWC and, if applicable, subject to the terms of any intercreditor agreement entered into by the Lender and any P&A financier of the Film), and (4) at the time that the Borrower (or any of its Affiliates) is prepared to set the initial theatrical release date for the Film (and provided that the conditions set forth in the foregoing clauses (1) through (3) have been satisfied), none of the events described in Section 10.1(a) of the Sales Agent Interparty Agreement)has occurred with respect to TWC.
(h) The Borrower represents and warrants to the Lender that the copy of the TFD/TWC Agreement that Lender has received is a true and complete copy thereof (and there are no side agreements, etc. that have not been disclosed to the Lender), and the Borrower also agrees that no amendment, modification or other supplement to (including any long form version of) the TFD/TWC Agreement (solely to the extent it relates to or affects the Film) is permitted without the Lender’s prior written consent, such consent not to be unreasonably withheld (and any such amendment, modification, long form version or other supplement without Lender’s prior written consent shall be null and void ab initio).
(i) Irrespective of whether or not an Event of Default has occurred and is continuing, and notwithstanding any other provision of this Agreement:
(i) Provided that all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have first been satisfied to the Lender’s satisfaction by no later than July 31, 2010, and expressly subject to any applicable First Rights of Fox (as such terms are defined in Section 10.21 hereof) with respect to the Film, the Lender approves the licensing of the U.S. Rights to TWC pursuant to the TFD/TWC Agreement (provided, however, that the TFD/TWC Agreement is not approved as an Acceptable Distribution Agreement, and Company shall consult with Buyer in each instance within a reasonable time prior to the Borrower expressly acknowledges that the TFD/TWC Agreement does not constitute an Acceptable Distribution Agreement);
(ii) If all expiration of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010, then the Borrower shall promptly engage a sales agent pre-approved by the Lender (▇▇▇▇▇▇ ▇▇▇▇▇▇ of WME is pre-approved), pursuant to a sales agency agreement in form and substance acceptable to the Lender, to market (in each case, to the extent not yet licensed through either an Acceptable Distribution Agreement applicable time period for exercising any such option or another Distribution Agreement that has been pre-approved in writing by Lender and also subject to any applicable First Rights of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution Agreements (for the avoidance of doubt, those Distribution Agreements must be documented as Acceptable Distribution Agreements, unless otherwise agreed in writing by the Lender), and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Fox does not exercise its right to become the Distributor of the U.S. Rights for the Film, then: (1) the Borrower shall first offer the U.S. Rights to TWC in writing (the “First Offer Notice”); and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWC; and
(iii) If (i) all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010 and (ii) the Gap Amount has not been reduced to $0 by December 31, 2010, then the Lender shall have the sole right, in lieu of the Borrower or any other Person, to select a Distributor for (in each case, to the extent not yet licensed through either an Acceptable Distribution Agreement or another Distribution Agreement that has been pre-approved in writing by Lender and also subject to any applicable First Rights of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution Agreements, and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Twentieth Century Fox does not exercise its right to become the Distributor of the U.S. Rights for the Film and TWC has not previously been offered the U.S. Rights pursuant to Section 6.8(i)(ii) above, then:
(1) the Borrower shall give the First Offer Notice to TWC; and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWC. The Borrower ratifies all acts of the Lender taken pursuant.
Appears in 1 contract
Distribution Agreements. (a) As Set forth on Schedule 4.23 hereto is a complete and accurate list of all Distribution Agreements of the Borrower and each of its Subsidiaries as of the Closing Date, the Borrower or a Licensing Intermediary (or the Sales Agent, on behalf of the Borrower or a Licensing Intermediary) has entered into the Current Distribution Agreements. The Borrower will not enter into and will not allow the Sales Agent, any Licensing Intermediary or any other Person to enter into any other Distribution Agreement with respect to the Film without the prior written approval of the Lender.
(b) The Borrower hereby represents execution, delivery and warrants to the Lender that: (i) the Borrower has delivered to the Lender true and complete copies of the Current Distribution Agreements, the Sales Agency Agreement and the existing Licensing Intermediary Agreements; (ii) each of the Current Distribution Agreements represents a valid and binding agreement, enforceable against the applicable Distributor, in accordance with its terms; (iii) each future Distribution Agreement will represent, a valid and binding agreement, enforceable against the applicable Distributor in accordance with its terms; (iv) no credit, discount, or extension, or agreement therefor will be granted on the Current Distribution Agreements or any other Distribution Agreement without the prior written consent of the Lender; (v) each copy of an invoice delivered to the Lender performance by the Borrower will be a genuine copy and each of its Subsidiaries of the original invoice (if any) sent Distribution Agreements to which it is a party and the applicable Distributor and/or any other Person; and (vi) each consummation of the Current Distribution Agreements that is not marked with an asterisk on Schedule 2 hereto constitutes an Acceptable Distribution Agreement.
(c) The Borrower shall use its best efforts to itself, or cause a Licensing Intermediary to, enter into Distribution Agreements (or cause the Sales Agent on behalf of the Borrower or a Licensing Intermediary, solely with respect to the Sales Agent Territory) with respect to all territories, media, and markets throughout the world. The Borrower shall not (and shall not allow Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement which does not meet all of the requirements for an Acceptable Distribution Agreement, and without limiting the generality of the foregoing, each Acceptable Distribution Agreement shall be documented with terms acceptable to the Lender and, if required transactions contemplated thereby by the Lender, supported by an Acceptable L/C. The Lender’s determination that a Distribution Agreement is an Acceptable Distribution Agreement shall be evidenced only by the Lender’s written approval. The Borrower shall not (and shall not authorize Sales Agent, a Licensing Intermediary or any other Person to) enter into a Distribution Agreement with an Unacceptable Distributor.
(d) The Borrower shall (or shall cause the Sales Agent to) deliver to the Lender, within five (5) Business Days after the same are executed, complete original copies of all Distribution Agreements entered into by the Borrower or a Licensing Intermediary (or by Sales Agent, on behalf of the Borrower or a Licensing Intermediary) after the date hereof, and shall cause all Distributors to execute and deliver to the Lender a Notice of Assignment and (if required by the Lender) an Acceptable L/C concurrently therewith.
(e) With respect to any proposed Distribution Agreement, the Borrower shall: (i) send or shall cause to be sent to the Lender during normal business hours (i.e., 9:00 a.m. — 5:00 p.m. Pacific time) the proposed Distribution Agreement or a written notice containing the proposed financial terms of such agreement and the proposed Delivery requirements; and (ii) ensure that such proposed Distribution Agreement and the terms thereof: (1) includes a Minimum Guarantee of not less than the “take” or “low” amount of the projected sale for the applicable territory specified in the Sales Estimates (provided that, in the case of the U.S. distribution rights, such Minimum Guarantee shall not be less than $2,500,000 and, in the case of the Canadian distribution rights, such Minimum Guarantee shall not be less than $700,000), (2) indicates that no Person is designated as an essential element other than the Essential Element, (3) is not to be entered into by a Distributor who is an Unacceptable Distributor, and (4) satisfies the other requirements for an Acceptable Distribution Agreement.
(f) The first $489,500 of the proceeds of the Initial Advance that is available to reimburse H&W for any of its equity contribution that was used to pay for a portion of its Prior Production Advances (as defined in the Completion Guaranty) shall be remitted to the Collection Account and reserved exclusively by the Lender as cash collateral (the “Distribution Cash Collateral”) to secure (i) the $80,000 Collateral Value attributed by the Lender to the last installment of the Minimum Guarantee payable by Hollywood Classic (the Distributor for the Czech Republic and Hungary) pursuant to its Notice of Assignment and (ii) the $409,500 Collateral Value attributed by the Lender to the last two (2) installments of the Minimum Guarantee payable by Senator Film (the Distributor for Germany) pursuant to its Notice of Assignment. The Distribution Cash Collateral shall be applied against the Obligations on the Termination Date, except as otherwise provided in this Section 6.8(f).Person:
(i) After the pending $20,000 balance of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to its Notice of Assignment is received in the Collection Account, the Lender shall promptly do not and will not (A) remit such Pre-Delivery Deposit balance payment (to the extent received in the Collection Account) to H&W and contravene or violate Holdings' or any of its Subsidiaries' respective Constituent Documents, (B) release $80,000 from violate any other Requirement of Law applicable to Holdings or any of its Subsidiaries, or any order or decree of any Governmental Authority or arbitrator, (C) conflict with or result in the Distribution Cash Collateral and remit such sum to H&W; providedbreach of, howeveror constitute a default under, if or result in or permit the pending $20,000 balance termination or acceleration of, any Contractual Obligation of Holdings or any of its Subsidiaries, except for those that in the SECOND AMENDED AND RESTATED CREDIT AGREEMENT AVIALL SERVICES, INC. aggregate would not have a Material Adverse Effect or (D) result in the creation or imposition of any Lien upon any of the Pre-Delivery Deposit that is due from Hollywood Classic pursuant to property of Holdings or any of its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution AgreementSubsidiaries; and
(ii) (A) After do not require the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Accountconsent of, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; and (B) after the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment is received in the Collection Accountauthorization by, the Lender shall promptly remit such installment (to the extent received in the Collection Account) to H&W; providedapproval of, howevernotice to, if (x) the first installment of such Minimum Guarantee was not paid prior to March 15or filing or registration with, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then (I) an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default and (II) the Lender shall be entitled to exercise its right under the applicable Notice of Assignment to terminate such Distributor’s Distribution Agreement; and
(iii) After the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are received in the Collection Account, the Lender shall promptly release $409,500 from the Distribution Cash Collateral and remit such sum to H&W; provided, however, if either (x) the first installment of such Minimum Guarantee was not paid prior to March 15, 2010 and/or (y) the second installment of such Minimum Guarantee was not paid prior to April 10, 2010, then an Additional Gap Fee shall be due and payable to the Lender with respect to each such payment default; and
(iv) If the pending $70,000 balance of the Pre-Delivery Deposit that is due from MS Trading (the Distributor for Benelux) pursuant to its Notice of Assignment is not received in the Collection Account by March 15, 2010, then the Lender shall be entitled to exercise its right under such Notice of Assignment to terminate such Distributor’s Distribution Agreement. Notwithstanding the foregoing, until the first and the second installments of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment are paid to the Collection Account, the Lender shall hold back $50,000 from the first portion of the Distribution Cash Collateral and/or any other sums that are to be released to H&W pursuant to this Section 6.8(f) (as applicable) as cash collateral for each Additional Gap Fee. If the first installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to March 15, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. If the second installment of the Minimum Guarantee due from Senator Film pursuant to its Notice of Assignment was not paid prior to April 10, 2010, then the Lender shall apply such cash collateral to the payment of the Additional Gap Fee due with respect to such payment default. All amounts disbursed to H&W pursuant to this Section 6.8(f) shall constitute a reimbursement to H&W of an equivalent amount of its equity contribution that was used to pay for a portion of its Prior Production Advances.
(g) The Borrower agrees that, until the Lender Termination Notice is issued, it will not set (nor permit any other Person to set) an initial theatrical release date for the Film (nor make any P&A funds available to TWC) unless: (1) the Gap Amount is $0, and (2) no less than $5,000,000 (or such greater amount that is needed, if applicable, to effectuate a U.S. theatrical release of the Film that satisfies the requirements of this clause (2)) (from sources other than Collateral Proceeds, such as from the proceeds of funding provided by a P&A financier for the film) has been deposited into the P&A Accounts (as defined in the Sales Agent Interparty Agreement) for the exclusive purpose of funding the P&A expenses for the Film that are sufficient to effect a U.S. theatrical release of the Film on a minimum of 200 screens (or such greater number of screens that satisfies the requirements necessary to qualify the Film for TWC’s distribution arrangement with its pay television provider) and (3) the Lender has received a Notice of Assignment executed by TWC and the Approved Licensor (as defined in the Sales Agent Interparty Agreement) (in form and substance acceptable to the Lender subject to good faith negotiation with TWC and, if applicable, subject to the terms of any intercreditor agreement entered into by the Lender and any P&A financier of the Film), and (4) at the time that the Borrower (or any of its Affiliates) is prepared to set the initial theatrical release date for the Film (and provided that the conditions set forth in the foregoing clauses (1) through (3) have been satisfied), none of the events described in Section 10.1(a) of the Sales Agent Interparty Agreement)has occurred with respect to TWC.
(h) The Borrower represents and warrants to the Lender that the copy of the TFD/TWC Agreement that Lender has received is a true and complete copy thereof (and there are no side agreements, etc. that have not been disclosed to the Lender), and the Borrower also agrees that no amendment, modification or other supplement to (including any long form version of) the TFD/TWC Agreement (solely to the extent it relates to or affects the Film) is permitted without the Lender’s prior written consent, such consent not to be unreasonably withheld (and any such amendment, modification, long form version or other supplement without Lender’s prior written consent shall be null and void ab initio).
(i) Irrespective of whether or not an Event of Default has occurred and is continuing, and notwithstanding any other provision of this Agreement:
(i) Provided that all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have first been satisfied to the Lender’s satisfaction by no later than July 31, 2010, and expressly subject to any applicable First Rights of Fox (as such terms are defined in Section 10.21 hereof) with respect to the Film, the Lender approves the licensing of the U.S. Rights to TWC pursuant to the TFD/TWC Agreement (provided, however, that the TFD/TWC Agreement is not approved as an Acceptable Distribution Agreement, and the Borrower expressly acknowledges that the TFD/TWC Agreement does not constitute an Acceptable Distribution Agreement);
(ii) If all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010, then the Borrower shall promptly engage a sales agent pre-approved by the Lender (▇▇▇▇▇▇ ▇▇▇▇▇▇ of WME is pre-approved), pursuant to a sales agency agreement in form and substance acceptable to the Lender, to market (in each case, to the extent not yet licensed through either an Acceptable Distribution Agreement or another Distribution Agreement that has been pre-approved in writing by Lender and also subject to any applicable First Rights of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution Agreements (for the avoidance of doubt, those Distribution Agreements must be documented as Acceptable Distribution Agreements, unless otherwise agreed in writing by the Lender), and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Fox does not exercise its right to become the Distributor of the U.S. Rights for the Film, then: (1) the Borrower shall first offer the U.S. Rights to TWC in writing (the “First Offer Notice”); and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWC; and
(iii) If (i) all of the conditions set forth in Section 3.10(a) of the Sales Agent Interparty Agreement have not been satisfied to the Lender’s satisfaction by July 31, 2010 and (ii) the Gap Amount has not been reduced to $0 by December 31, 2010, then the Lender shall have the sole right, in lieu of the Borrower Governmental Authority or any other Person, to select a Distributor for other than those which will have been obtained at the Closing Date, each of which will be in full force and effect on the Closing Date.
(c) Each of the Distribution Agreements has been, or at the Closing Date will have been, duly executed and delivered by the Borrower or its Subsidiary that is party thereto and at the Closing Date will be the legal, valid and binding obligation of the Borrower or such Subsidiary, enforceable against the Borrower or such Subsidiary in accordance with its terms.
(d) None of the Distribution Agreements has been amended or modified in any respect and no provision therein has been waived, except in each case, case to the extent not yet licensed through either an Acceptable Distribution Agreement or another Distribution Agreement that has been pre-approved in writing permitted by Lender and also subject to any applicable First Rights Section 8.11 (Modification of Fox) the U.S. Rights and (subject to any applicable rights of Alliance Films Inc.) the Canadian exploitation rights for the Film and to negotiate the terms of those Distributor’s respective Distribution AgreementsRelated Documents), and the Borrower shall promptly execute each such Distribution Agreement (in the form required by the Lender) and take all other actions that are necessary to document each such Distribution Agreement as an Acceptable Distribution Agreement. Notwithstanding the foregoing, if Twentieth Century Fox does not exercise its right to become the Distributor of the U.S. Rights for representations and warranties therein is true and correct in all material respects and no default or event which with the Film and TWC giving of notice or lapse of time or both would be a default has not previously been offered the U.S. Rights pursuant to Section 6.8(i)(ii) above, then:
(1) the Borrower shall give the First Offer Notice to TWC; and (2) if a Distribution Agreement is not concluded between the Borrower and TWC with regard to the license of the U.S. Rights for the Film on terms acceptable to the Lender (and a Notice of Assignment with respect thereto has not been executed and delivered to the Lender by the Borrower and TWC) within thirty (30) calendar days after TWC’s receipt of the First Offer Notice, then the Borrower shall thereafter have the right to offer the U.S. Rights to any other Person without any further obligation to TWC. The Borrower ratifies all acts of the Lender taken pursuantoccurred thereunder.
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Sources: Credit Agreement (Aviall Inc)