As of April 9, 1999
From: Xxxxxx & Co.
000 Xxxxxx
Xxxxxx XX0X 0XX
Berliner Bank A.G. London Branch
No. 0 Xxxxx Xxxxx
Xxxxxxxxx
Xxxxxx XX0X 0XX
To: Overseas Filmgroup, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: Restated and Amended Syndication Agreement dated as of October 31, 1996
(the "Syndication Agreement") among Xxxxxx & Co. ("Coutts"), Berliner Bank
A.G. London Branch ("Berliner") (Coutts and Xxxxxxxx collectively referred
to herein as the "Banks"), Overseas Filmgroup, Inc. and Entertainment/Media
Acquisition Corporation (the "Company") as amended and extended by that
certain amendment dated as of April 14, 1998 (the "1998 Amendment").
Dear Sirs:
This letter (the "Amendment") constitutes an amendment to the Syndication
Agreement on the terms set forth below. Capitalized terms used but not defined
herein shall have the meaning set forth in the Syndication Agreement.
1. EXTENSION: Subject to the Company's continued compliance with the terms of
the Syndication Agreement and the terms of 1998 Amendment, the Company's
compliance with the terms of this letter agreement and the agreement of the
Xxxxxxx to the provisions of paragraph 6 below, we hereby agree that all
references to 9th May (and such later dates as provided by earlier amendment) in
clauses 2.8 and 17 of the Syndication Agreement shall be deemed to be references
to April 9, 2000.
2. BORROWING LIMITS: The borrowing limits and the conditions thereof as set
forth in the 1998 Amendment shall remain in full force and effect through April
9, 2000, save that references in Clause 2 of the 1998 Amendment to the Cash Flow
Schedule shall be deemed to be references to the cash flow schedule supplied by
the Company to Coutts during its most recent review of the Company for the
period March 1999 through April 2000, a copy of which is attached
Overseas Filmgroup, Inc.
April 9, 1999
Page 2
hereto. For the avoidance of doubt, payment of all fees, interest and
expenses payable pursuant to the Syndication Agreement are to be kept
current. Without prejudice to the foregoing, in the event the Banks
capitalize the same (which they may do in their absolute discretion) interest
shall be charged at the rate set out in clause 5.7 of the Syndication
Agreement.
3. EXTENSION OF INDIVIDUAL FILM FACILITIES: With respect to all Film
Facilities outstanding at the date hereof, notwithstanding the maturity date set
forth in each of the Film Facilities, Coutts and Berliner agree to waive such
maturity dates and agree that the maturity date for the Film Facility for FIRST
TO GO shall be May 31, 1999, the Film Facility for DIFFERENT FOR GIRLS shall be
October 31, 1999 and the Film Facilities for ALIVE AND KICKING, BODY OF A WOMAN,
BROTHER'S KISS, COUNTDOWN, DESIGNATED MOURNER, ROAD TO RUIN, GODMONEY, INFINITY,
XXXXX, KEEP THE ASPIDISTRA FLYING, LIFEBREATH, ONE GOOD TURN, SLAVES TO THE
UNDERGROUND, STAND INS and THIS IS THE SEA shall be April 9, 2000.
4. ADDITIONAL FINANCIAL INFORMATION: Clause 10 of the Syndication Agreement
shall be amended to include an obligation of the Company to provide the
following additional financial information in a form acceptable to the Banks on
a monthly basis: (i) aged creditors report and (ii) rolling cash flow schedule.
5. FEES AND INTEREST:
A new Clause 6.1.6 shall be inserted into the Syndication Agreement as follows:
"to the Agent an extension fee of US$5,000 per month or part thereof, the first
such payment to be made on signature hereof and thereafter at monthly intervals
in advance and a further extension fee of $US15,833.33 per month or part thereof
accruing on a monthly basis but payable on the earliest of (i) the first
anniversary of this agreement; (ii) the date on which all amounts outstanding to
the Banks are repaid in full; and (iii) the date on which the Banks mutually
determine that the Company has sufficient cash to pay the same."
6. MERGER NOTE: The Banks agree that at the date hereof and prior thereto, at
the election of the Company and the Xxxxxxx and notwithstanding the terms of the
1998 Amendment, amounts otherwise payable as weekly salary payments to the
Xxxxxxx as set forth in the Employment Agreements dated as of October 31, 1996
between each of Xxxxx Xxxxxx and Xxxxxx Xxxxxx and the Company may be deferred
and amounts equal to such weekly salary payments (as deferred) may be applied in
payment of amounts due pursuant to the note received by them in the Merger (the
"Merger Note") until such time as the Merger Note has been fully repaid. The
obligation of the Company to pay such salary shall accrue and become a new
liability of the Company provided such accrued salary shall not be paid to the
Xxxxxxx by the Company until the
Overseas Filmgroup, Inc.
April 9, 1999
Page 3
Operating Facility returns to the limit of $5,000,000 and the Banks, in their
sole opinion, view such return to be permanent. The rights of Xxxxxx X.
Xxxxxx and Xxxxx Xxxxxx under the Merger Note and related security agreement
will not otherwise be affected.
7. CERTAIN WAIVERS:
(a) Notwithstanding Clause 11.1.1 of the Syndication Agreement, pursuant
to the 1998 Amendment, the Banks amended Clause 11.1.1 of the
Syndication Agreement in relation to a minimum net worth (the "Net
Worth Covenant") to provide that such Net Worth Covenant would be
$11,000,000 for a twelve month period beginning on the date of the
1998 Amendment. The banks hereby extend such reduced net worth
provision for an additional twelve months from April 9, 1999.
(b) The Banks hereby acknowledge that certain unsecured liabilities
incurred in the ordinary course of business as provided under Clause
11.1.3.1 of the Syndication Agreement are more than forty-five days
past due and the Banks waive any non-compliance with Clause 11.1.3.1
of the Syndication Agreement in connection therewith as of the date
hereof and prior thereto. However, the Banks do not waive any non-
compliance with clause 11.1.3.1 after the date hereof even if such
non-compliance results from an unsecured liability existing at the
date hereof (whether due at the date hereof for more or less than 45
days).
(c) Notwithstanding Clause 11.1.4 of the Syndication Agreement, the Banks
hereby waive as of the date of this Agreement and/or prior thereto the
Banks' requirements for letters of credit or bank guarantees for
License Agreements with Subdistributors. However, the Banks
specifically reserve all their rights pursuant to the Syndication
Agreement and Clause 11.1.4 thereof in particular to require
irrevocable letters of credit or bank guarantees to secure payments
under any License Agreements entered into after the date hereof.
(d) Notwithstanding Clause 11.2 of the Syndication Agreement, the Banks
hereby acknowledge that the overhead budget as agreed with Coutts and
Berliner has been exceeded and the Banks hereby waive any non-
compliance with paragraph 11.2 as of the date of this Agreement and/or
prior thereto. The Banks acknowledge and approve the overhead budget
as set forth in the cash flow schedule attached hereto as the
applicable overhead budget from the date hereof for the next twelve
months.
(e) The Banks hereby waive any non-compliance with Clause 11.4 wherein the
Banks require that receivables in connection with each Film Facility
shall not be less than 30% of the amount outstanding under such Film
Facility, as of the date of this Agreement
Overseas Filmgroup, Inc.
April 9, 1999
Page 4
and prior thereto. However, the Banks so not waive their rights
with respect to Clause 11.4 at all times after the date hereof.
8. GOVERNING LAW AND JURISDICTION: This Amendment shall be governed by and
construed in accordance with English law and the parties hereby submit to the
non-exclusive jurisdiction of the English Courts and the state and federal
courts located in Los Angeles, California.
This Amendment sets out, inter alia, the terms under which the Syndication
Agreement is amended. Except as expressly provided herein, the Syndication
Agreement, as hereby amended, shall remain in full force and effect. The
parties hereto agree to use their best efforts to expeditiously effectuate any
further documents and/or instruments reasonably requested or necessary to carry
out the intention of the provisions hereof. This Amendment may be executed in
any number of counterparts each of which, when executed, shall be deemed an
original and all of which shall together constitute one and the same agreement.
When signed by all the parties hereto, this Amendment shall be a binding
agreement on the parties hereto.
Overseas Filmgroup, Inc.
April 9, 1999
Page 5
Please sign and return the enclosed copies of this letter to indicate your
agreement to the foregoing.
Yours faithfully
for and on behalf of Xxxxxx & Co.
By: /s/ X.X. Xxxxx
-------------------------
Its: Senior Manager
------------------------
By: /s/ X.X. Xxxxxxx
-------------------------
Its: Client Manager
------------------------
for and on behalf of Berliner Bank A.G.
By: /s/ Xxxxx Xxxx
-------------------------
Its:
------------------------
By: /s/ Xxxxx Xxxxxxx
-------------------------
Its:
------------------------
ACCEPTED AND AGREED
AS OF THE DATE WRITTEN ABOVE:
Overseas Filmgroup, Inc.
By: Xxxxxxx X. Lischack
-------------------------
Its: Chief Operating Officer,
Chief Financial Officer
------------------------
ACCEPTED AND AGREED
AS OF THE DATE WRITTEN ABOVE:
Xxxxx Xxxxxx (in her capacity as an individual)
/s/ Xxxxx Xxxxxx
-------------------------------------------
Xxxxxx Xxxxxx (in his capacity as an individual)
/s/ Xxxxxx Xxxxxx
--------------------------------------------
