Document:

exv10w70

EXHIBIT 10.70

CONFIDENTIAL TREATMENT REQUESTED: INFORMATION FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
IS OMITTED AND NOTED WITH “[REDACTED].” AN UNREDACTED VERSION OF THIS DOCUMENT HAS BEEN FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

AMENDMENT NO. 1 TO CREDIT AGREEMENT

     AMENDMENT NO. 1 dated as of September 30, 2009 (the “Amendment”) to the Second Amended
and Restated Credit, Security, Pledge and Guaranty and Agreement dated as of July 25, 2008 (as
amended, supplemented or otherwise modified, renewed or replaced from time to time, the “Credit
Agreement”) among (i) LIONS GATE ENTERTAINMENT INC., LIONS GATE UK LIMITED AND LIONS GATE
AUSTRALIA PTY LIMITED, as Borrowers (collectively, the “Borrowers”), (ii) the GUARANTORS
referred to herein, (iii) the LENDERS referred to therein (each, a “Lender,” and
collectively, the “Lenders”) (iv) JPMORGAN CHASE BANK, N.A., as Administrative Agent (in
such capacity, the “Administrative Agent”) and as Issuing Bank and (v) WACHOVIA BANK, N.A.,
as Syndication Agent.

     The Borrowers have requested, and the Administrative Agent and the Lenders have agreed, to
amend the Credit Agreement as set forth herein.

     Therefore, the parties hereto hereby agree as follows:

     1. Defined Terms. All terms used but not otherwise defined herein have the meanings
assigned to them in the Credit Agreement.

     2. Amendments to Credit Agreement. Subject to the satisfaction of the conditions
precedent set forth in Section 3 below, the Credit Agreement is hereby amended as of the
Effective Date (as defined below) as follows:

          (a) Article 1 of the Credit Agreement is hereby amended by adding the following definitions in
the proper alphabetical place:

               “Defaulting Lender” shall mean any Lender, as reasonably determined by the
Administrative Agent, that has (a) failed to fund any portion of its Loans or participations in
Letters of Credit within three (3) Business Days of the date required to be funded by it hereunder,
unless the subject of a good faith dispute, (b) notified the Administrative Agent, the Issuing
Bank, any Lender (subject to such Lender having given notice thereof to the Administrative Agent)
or the Borrowers (subject to the Borrowers having given notice thereof to the Administrative Agent)
in writing that it does not intend to comply with any of its funding obligations under this Credit
Agreement unless the subject of a good faith dispute or has made a public statement to the effect
that it does not intend to comply with its funding obligations under this Credit Agreement unless
the subject of a good faith dispute, (c) failed, within five (5) Business Days after written
request by the Administrative Agent, to confirm that it will comply

 

 

with the terms of this Credit Agreement relating to its obligations to fund prospective Loans
and participations in then outstanding Letters of Credit, provided that such Lender shall cease to
be a Defaulting Lender under this clause (c) upon receipt of such confirmation, (d) otherwise
failed to pay over to the Administrative Agent or any other Lender any other amount required to be
paid by it hereunder within three (3) Business Days of the date when due, unless the subject of a
good faith dispute, or (e) (i) become or is insolvent or has a parent company that has become or is
insolvent, or (ii) become the subject of a bankruptcy or insolvency proceeding, or has had a
receiver, conservator, trustee or custodian appointed for it, or has a parent company that has
become the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator,
trustee or custodian appointed for it, provided that a Lender shall not be a Defaulting Lender
solely by virtue of the ownership or acquisition of any ownership interest in such Lender or parent
company thereof or the exercise of control over a Lender or parent company thereof by a
governmental authority or instrumentality thereof.

               “Permitted Refinancing Indebtedness” shall mean any Indebtedness issued in exchange
for, or the Net Cash Proceeds of which are used within 18 months of the incurrence of such
Indebtedness to extend, refinance, renew, replace, redeem, repurchase, defease, repay or refund, in
whole or in part (collectively, to “Refinance”), the Indebtedness being Refinanced (or
previous refinancings thereof constituting Permitted Refinancing Indebtedness); provided
that (a) the principal amount (or accreted value, if applicable) of such Permitted Refinancing
Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the
Indebtedness so Refinanced (plus unpaid accrued interest and premium (including tender premiums)
thereon and underwriting discounts, defeasance costs, fees, commissions and expenses), (b) either
(x) the Permitted Refinancing Indebtedness does not require any principal payments (whether
scheduled or as a result of a mandatory prepayment, a “put” at the option of the holder, a sinking
fund or similar payment) prior to one year after the Maturity Date or (y) (A) the proceeds of such
Permitted Refinancing Indebtedness are used concurrently with the issuance thereof to Refinance
other Indebtedness (B) the Permitted Refinancing Indebtedness is scheduled to mature either (i) no
earlier than the Indebtedness being Refinanced or (ii) at least one year after the Maturity Date,
(C) the portion, if any, of the Permitted Refinancing Indebtedness that is scheduled to mature on
or prior to one year after the Maturity Date has a weighted average life to maturity at the time
such Permitted Refinancing Indebtedness is incurred that is greater than or equal to the weighted
average life to maturity of the portion of the Indebtedness being Refinanced that is scheduled to
mature on or prior to one year after the Maturity Date and (D) the Permitted Refinancing
Indebtedness does not have additional security or Guaranties as compared to the Indebtedness being
Refinanced, (c) if the Indebtedness being Refinanced is subordinated in right of payment to the
Obligations under this Agreement, such Permitted Refinancing Indebtedness shall be subordinated in
right of payment to such Obligations on terms at least as favorable to the Lenders as those
contained in the documentation governing the Indebtedness being Refinanced (unless otherwise
approved by the Administrative Agent), (d) no Permitted Refinancing Indebtedness shall have
different obligors (but may have additional obligors) or greater guarantees or security, than the
Indebtedness being Refinanced (unless meeting the requirements of (b)(x) above and otherwise
approved by the Administrative Agent), (e) Indebtedness which is intended to constitute Permitted
Refinancing Indebtedness but which is not applied to Refinance other Indebtedness concurrently with
the incurrence thereof must satisfy the requirements of the definition of Subordinated Debt as if
it were “other Indebtedness” at the time of incurrence thereof and shall not constitute Permitted
Refinancing Indebtedness unless

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and until actually applied to Refinance Indebtedness in accordance with the terms of this
definition and (f) the proceeds of Permitted Refinancing Indebtedness may be used initially to
repay the Obligations and then borrowed hereunder as Loans and used to Refinance Indebtedness in
accordance with terms of this definition (a “Permitted Refinancing Reborrowing”). For the
avoidance of doubt, the term Refinance shall (i) include without limitation, the satisfaction of
mandatory repayment or “put” obligations required by the terms of Convertible Senior Subordinated
Notes, but shall exclude temporary repayments of outstanding loans under committed revolving credit
facilities except to the extent accompanied by a permanent commitment reduction.”

               “Unapplied Refinancing Proceeds” shall mean Indebtedness incurred with the intention
(as evidenced by a Certificate of an Authorized Officer delivered to the Administrative Agent
concurrently with the incurrence of such Indebtedness) of being used as Permitted Refinancing
Indebtedness but which has not been used to Refinance Indebtedness within 18 months of its
incurrence; provided that (1) the Borrowers may at any time prior to 18 months after such
incurrence of Permitted Refinancing Indebtedness provide a Certificate of an Authorized Officer
delivered to the Administrative Agent declaring that all or any portion of such proceeds of
Permitted Refinancing Indebtedness that have not been used to Refinance Indebtedness will not be
used to Refinance Indebtedness within 18 months of its incurrence, (2) upon the delivery of such
Certificate of an Authorized Officer to the Administrative Agent, such amounts shall immediately be
considered Unapplied Refinancing Proceeds and (3) such declaration shall be irrevocable.

          (b) The definition of “Applicable Margin” in Article 1 of the Credit Agreement is hereby
amended in its entirety to read as follows:

          ““Applicable Margin” shall mean (i) in the case of U.S. Dollar Loans that are
Alternate Base Rate Loans, 1.50% per annum, (ii) in the case of U.S. Dollar Loans that are
Eurodollar Loans, 2.50% per annum, (iii) in the case of Sterling Eurodollar Loans, 2.50% per annum
and (iv) in the case of Australian Dollar Eurodollar Loans, 2.50% per annum.”

          (c) The definition of “Convertible Senior Subordinated Notes” in Article 1 of the Credit
Agreement is hereby amended by (x) deleting the word “and” before “(ii)” and inserting a comma in
lieu thereof, and (y) adding the following words to the end thereof: “and (iii) LGEI’s 3.625%
Convertible Senior Subordinated Notes due 2025 which were issued in April 2009 and (iv) any
Permitted Refinancing Indebtedness in respect of items (i), (ii) or (iii)”.

          (d) The definition of “Investment” in Article 1 of the Credit Agreement is hereby amended by
replacing the proviso at the end thereof with the following:

          “provided, however, that (i) an Acquisition and (ii) a Refinancing of outstanding Subordinated
Debt (including, without limitation, any Convertible Senior Subordinated Notes) with Permitted
Refinancing Indebtedness shall not be considered an “Investment”.”

          (e) The definition of “Subordinated Debt” in Article 1 of the Credit Agreement is hereby
amended in its entirety to read as follows:

          ““Subordinated Debt” shall mean the Convertible Senior Subordinated Notes and

3

 

other Indebtedness (including Permitted Refinancing Indebtedness which is issued in respect of
other Subordinated Debt) issued after the date hereof which is either subordinated on terms
satisfactory to the Administrative Agent to the Borrowers’ obligations to the Administrative Agent
and the Group Lenders under the Facility or secured by a Lien that is subordinated on terms
satisfactory to the Administrative Agent to the Lien granted to the Administrative Agent for the
benefit of itself, the Issuing Bank and the Group Lenders under the Facility; provided,
that (i) at the time of issuance of any such other Indebtedness, the ratio (the
“Subordinated Debt Ratio”) of (A) the Borrowing Base to (B) all outstanding Loans
plus the L/C Exposure plus the aggregate amount of all Subordinated Debt (other
than the Subordinated Debt represented by (x) the Convertible Senior Subordinated Notes and (y) the
Subordinated Debt to be concurrently or previously Refinanced by Permitted Refinancing Indebtedness
constituting Subordinated Debt), must not be less than 1.25 to 1, (ii) the Borrowers shall
demonstrate pro forma compliance with the covenants set forth in Section 6.19 through 6.21 and 6.32
hereof after giving effect to such Indebtedness, (iii) such Indebtedness does not require any cash
principal payments prior to one year after the Maturity Date and (iv) all other terms and
conditions relating to such Indebtedness (including, without limitation, subordination provisions,
if any, covenants and defaults and any related security, intercreditor or subordination agreement)
shall be satisfactory to Administrative Agent.”

          (f) Section 2.23(a) of the Credit Agreement is hereby amended by deleting the figure
“U.S.$160,000,000” in the third line thereof and replacing it with “U.S.$60,000,000”.

          (g) Article 2 of the Credit Agreement is hereby amended by adding the following section at the
end thereof:

     “SECTION 2.24 Defaulting Lenders. Notwithstanding any provision of this
Agreement to the contrary, if any Lender becomes a Defaulting Lender, then the following
provisions shall apply for so long as such Lender is a Defaulting Lender:

(a) if any L/C Exposure exists at the time a Lender is a Defaulting Lender,
the Borrowers shall within one (1) Business Day following notice by the
Administrative Agent cash collateralize such Defaulting Lender’s L/C Exposure in
accordance with the procedures set forth in Section 2.6(j) for so long as such L/C
Exposure is outstanding; and

(b) the Issuing Bank shall not be required to issue, amend or increase any Letter of
Credit unless it is satisfied that cash collateral will be provided by the Borrower
in accordance with Section 2.6(j).”

          (h) Section 5.19(iv) of the Credit Agreement is hereby amended in its entirety to read as
follows:

“(iv) for other general corporate purposes, including without limitation
acquisitions, permitted stock and indebtedness repurchases, dividends and cash
collateralizing a Defaulting Lender’s L/C Exposure in accordance with Section
2.24(a) hereof”.

          (i) Section 6.3(v) of the Credit Agreement is hereby amended by replacing

4

 

the phrase “to the extent otherwise permitted hereunder” with the phrase “to the extent such
obligations are otherwise permitted hereunder”.

          (j) Section 6.3(x) of the Credit Agreement is hereby amended by replacing the amount “US
$10,000,000” with the amount “US $25,000,000”.

          (k) Section 6.4(xix) of the Credit Agreement (Limitations on Investments) is hereby amended by
(i) inserting immediately prior to the words “plus 50%” the new phrase “plus 50% of Unapplied
Refinancing Proceeds” and (ii) inserting immediately after the words “Net Cash Proceeds” the words
“(other than Net Cash Proceeds which have been used to Refinance Subordinated Debt or Permitted
Preferred Stock pursuant to Section 6.5(xii))”.

          (l) Section 6.5(vii) of the Credit Agreement is hereby amended (i) by inserting immediately
after the words “Subordinated Debt” the parenthetical “(other than in connection with the issuance
of any Permitted Refinancing Indebtedness to Refinance such Subordinated Debt, which shall be
permitted in its entirety pursuant to clause (xii) below and shall need not satisfy the
requirements of this clause (vii)”, (ii) by inserting immediately prior to the words “plus 50%” the
new phrase “plus 50% of the Unapplied Refinancing Proceeds” and (iii) inserting immediately after
the words “Net Cash Proceeds” the words “(other than Net Cash Proceeds which have been used to
Refinance Subordinated Debt or Permitted Preferred Stock pursuant to Section 6.5(xii))”.

          (m) Section 6.5(viii) of the Credit Agreement is hereby amended in its entirety to read as
follows:

“(viii) payments (including, without limitation, mandatory repayments or “puts” of
Convertible Senior Subordinated Notes) but not prepayments of interest and principal
on Subordinated Debt (including Permitted Refinancing Indebtedness which is issued
in respect of any Subordinated Debt) on the terms set forth in the applicable
documents and provided that no Default or Event of Default shall be continuing after
giving effect on a pro forma basis to such payments.”

          (n) Section 6.5 of the Credit Agreement is hereby further amended by adding the following
sub-clause (xii) to the end thereof:

          “(xii) the Refinance of Subordinated Debt or Permitted Preferred Stock in exchange for or with
all or a portion of proceeds received from the issuance of Permitted Preferred Stock, Equity
Interests of LGEC or LGEI (to the extent consideration for the Equity Interests of LGEI are from
proceeds from the issuance of Equity Interests in LGEC), common stock of LGEC or Permitted
Refinancing Indebtedness (including, without limitation, Permitted Refinancing Reborrowings) in
compliance with the definitions of such terms;”

          (o) Section 6.20 of the Credit Agreement (Fixed Charges Coverage Ratio) is hereby amended by
inserting immediately prior to the phrase “other than payments to” in the next to last
parenthetical, the phrase “(i) other than mandatory repayments or “puts” of Convertible Senior
Subordinated Notes and (ii)”.

          (p) Article 6 of the Credit Agreement is hereby amended by adding the

5

 

following section at the end thereof:

“SECTION 6.32 Secured Debt Ratio. At anytime permit the ratio of (A) the
sum of the Borrowing Base plus unrestricted cash and Cash Equivalents of the
Credit Parties to (B) the sum of all outstanding Loans plus the L/C Exposure
plus all other Indebtedness of any Credit Party which is secured by a Lien
on assets of any Credit Party other than (1) Indebtedness specified in Sections
6.1(c), (e), (f), (g), (j), (l), (m), (n) and (p) and (2) Guaranties permitted under
Section 6.1(b) to the extent that such Guaranties guaranty Indebtedness specified in
Sections 6.1 (c), (e), (f), (g), (j), (l), (m), (n) or (p) or would result in double
counting of the Indebtedness otherwise included in this ratio, to be less than 1.0
to 1.0.”

          (r) Schedule 1.2 of the Credit Agreement is hereby amended by replacing the limits for each of
the Acceptable Domestic or Foreign Account Debtors below with the corresponding amounts set forth
below:

     [REDACTED]

     3. Conditions to Effectiveness. (a) The provisions of Section 2 (other than
Sections 2(b) and 2(f)) of this Amendment shall not become effective until the date upon which all
of the following conditions precedent have been satisfied (such date, the “Effective
Date”):

          (i) the Administrative Agent shall have received counterparts of this Amendment which, when
taken together, bear the signatures of the Borrowers, each of the Guarantors and each of the
Required Lenders; and

          (ii) the Administrative Agent shall have received from the Borrowers (for the benefit of each
Lender that has executed and delivered to the Administrative Agent a counterpart to this Amendment
at or prior to 5:00pm (New York City time) on Tuesday, September 29, 2009) an amount equal to 0.25%
of each such consenting Lender’s Commitment (the “Amendment Fee”).

          (b) The provisions of Sections 2(b) and 2(f) of this Amendment shall not become effective
until the occurrence of both the Effective Date and the Qualifying Debt Securities Offering.
“Qualifying Debt Securities Offering” means the consummation of any public or private offer or
series of related offers of either (i) secured debt securities in any amount (other than Permitted
Refinancing Indebtedness and which for the avoidance of doubt, shall not include, without
limitation, project loans, slate film financings and other commercial loans) or (ii) unsecured debt
securities in the amount of at least $50,000,000 (other than Permitted Refinancing Indebtedness and
which for the avoidance of doubt, shall not include, without limitation, project loans, slate film
financings and other commercial loans), in either case, after the Effective Date by LGEC or by
LGEI (which may be guaranteed by LGEC and Subsidiaries, to the extent permitted under the Credit
Agreement, as amended by this Amendment).

     4. Representations and Warranties. Each Credit Party represents and warrants that:

          (a) after giving effect to this Amendment, the representations and warranties

6

 

contained in the Credit Agreement are true and correct in all material respects on and as of
the date hereof as if such representations and warranties had been made on and as of the date
hereof (except to the extent that any such representations and warranties specifically relate to an
earlier date); and

          (b) after giving effect to this Amendment, no Default or Event of Default will have occurred
and be continuing on and as of the date hereof.

     5. Fundamental Document. This Amendment is designated a Fundamental Document by the
Administrative Agent.

     6. Full Force and Effect. Except as expressly amended hereby, the Credit Agreement
(as previously amended) shall continue in full force and effect in accordance with the provisions
thereof on the date hereof. As used in the Credit Agreement, the terms “Agreement,” “this
Agreement,” “this Credit Agreement,” “herein,” “hereafter,” “hereto,” “hereof” and words of similar
import shall mean, unless the context otherwise requires, the Credit Agreement as amended by this
Amendment. This Amendment shall not be construed as extending to any other matter, similar or
dissimilar, or entitling the Credit Parties to any future amendments regarding similar matters or
otherwise.

     7. APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

     8. Counterparts. This Amendment may be executed in one or more counterparts, each of
which shall constitute an original, but all of which when taken together shall constitute but one
instrument.

     9. Expenses. The Borrowers agree to pay all out-of-pocket expenses incurred by the
Administrative Agent in connection with the preparation, enforcement, waiver or modification,
execution and delivery of this Amendment, including, but not limited to, the reasonable fees and
disbursements of counsel for the Administrative Agent.

     10. Headings. The headings of this Amendment are for the purposes of reference only
and shall not affect the construction of this Amendment.

[Signatures Begin on Next Page]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their
duly authorized officers, all as of the date and year first above written.

	 	 	 	 	 
	 	BORROWERS:

LIONS GATE ENTERTAINMENT INC.

 	 
	 	By  	/s/ Wayne Levin
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LIONS GATE UK LIMITED (formerly Redbus Film

Distribution Limited)

 	 
	 	By  	/s/ Wayne Levin
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	LIONS GATE AUSTRALIA PTY LIMITED

 	 
	 	By  	/s/ Wayne Levin
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

15

 

	 	 	 	 	 

GUARANTORS:

ALL ABOUT US PRODUCTIONS INC.

ARIMA INC.

ARTISAN ENTERTAINMENT INC.

ARTISAN FILMED PRODUCTIONS, INC.

ARTISAN HOME ENTERTAINMENT INC.

ARTISAN PICTURES INC.

ARTISAN RELEASING INC.

BABE RUTHLESS PRODUCTIONS, LLC

BACKSEAT PRODUCTIONS, LLC

BASTER PRODUCTIONS, LLC

BD OPTICAL MEDIA, INC.

BLITZ DISTRIBUTION LIMITED

BLITZ FILMS LIMITED

BLUE MOUNTAIN STATE PRODUCTIONS CORP.

BURROWERS PRODUCTIONS INC.

CORNFIELD PRODUCTIONS, LLC

CRASH TELEVISION PRODUCTIONS INC.

CRASH 2 TELEVISION PRODUCTIONS INC.

CUPID PRODUCTIONS INC.

DANCING ELK PRODUCTIONS INC.

DEAD ZONE PRODUCTION CORP.

DEBMAR/MERCURY LLC

DEBMAR/MERCURY INTERNATIONAL LIMITED (UK)

DEBMAR/MERCURY (WW) PRODUCTIONS, LLC

DEBMAR STUDIOS INC.

DJM SERVICES INC.

DRESDEN FILES PRODUCTIONS CORP.

DRESDEN FILES PRODUCTIONS I CORP.

FEAR ITSELF PRODUCTIONS CORP.

FILM HOLDINGS CO.

FIVE DAYS PRODUCTIONS CORP.

GC FILMS, INC.

GC SHORT FILMS, INC.

HEART FRANK, INC.

HIGHER POST, LLC

HORSEMEN PRODUCTIONS, LLC

INVISIBLE CASTING INC.

JV1 ISH, LLC

ISH TELEVISION DEVELOPMENT, LLC

ISH PROJECTS, LLC

IWC PRODUCTIONS, LLC

KILL PIT PRODUCTIONS INC.

 

 

LANDSCAPE ENTERTAINMENT CORP.

LG HORROR CHANNEL HOLDINGS LLC

LG PICTURES INC.

LIONS GATE ENTERTAINMENT CORP.

LIONS GATE FILMS INC.

LIONS GATE FILMS OF PUERTO RICO, INC.

LIONS GATE FILMS PRODUCTIONS CORP./PRODUCTIONS FILMS

LIONS GATE S.A.R.F.

LIONS GATE HOME ENTERTAINMENT UK LIMITED (formerly

Redbus Home Entertainment Limited)

LIONS GATE INDIA, INC.

LIONS GATE MANDATE FINANCING VEHICLE, INC.

LIONS GATE MUSIC INC.

LIONS GATE MUSIC CORP.

LIONS GATE MUSIC PUBLISHING LLC

LIONS GATE ONLINE SHOP, INC.

LIONS GATE PENNSYLVANIA, INC.

LIONS GATE PICTURES UK LIMITED (formerly Redbus

Pictures Limited)

LIONS GATE RECORDS, INC.

LIONS GATE SPIRIT HOLDINGS, LLC

LIONS GATE TELEVISION DEVELOPMENT LLC

LIONS GATE TELEVISION INC.

LIONS GATE X PRODUCTIONS LLC

LUCKY 7 PRODUCTIONS CORP.

MANDATE PICTURES LLC

MANDATE INTERNATIONAL, LLC

MANDATE FILMS, LLC

MOTHER PRODUCTIONS CORP.

MQP, LLC

NGC FILMS, INC.

NURSE PRODUCTIONS, INC.

PEARL RIVER HOLDINGS CORP.

PGH PRODUCTIONS, INC.

PLANETARY PRODUCTIONS, LLC

PLAYLIST, LLC

POWER MONGERING DESPOT, INC.

PRODUCTION MANAGEMENT INC.

PROFILER PRODUCTIONS CORP.

PSYCHO PRODUCTIONS SERVICES CORP.

R & B PRODUCTIONS, INC.

SCREENING ROOM, INC.

 

 

	 	 	 	 	 
	 	SILENT DEVELOPMENT CORP.

SS3 PRODUCTIONS, INC.

SKILLPA PRODUCTIONS, LLC

TALK PRODUCTIONS CORP.

TED PRODUCTIONS, INC.

TERRESTRIAL PRODUCTIONS CORP.

TOUCH PRODUCTIONS CORP.

U.R.O.K. PRODUCTIONS INC.

VERDICT PRODUCTIONS, INC.

VESTRON INC.

WEEDS PRODUCTIONS INC.

WILDFIRE PRODUCTIONS INC.

WILDFIRE 2 PRODUCTIONS INC.

WILDFIRE 3 PRODUCTIONS INC.

WILDFIRE 4 PRODUCTIONS INC.

 	 
	 	By:  	/s/ Wayne Levin
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	BLAIR WITCH FILM PARTNERS LTD.
 	 
	 	By:  	     Artisan Filmed Productions Inc.
 	 
	 	Its:    General Partner 	 
	 	 	 
	 	By:  	     /s/ Wayne Levin
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	LENDERS:

JPMORGAN CHASE BANK, N.A.

individually and as Administrative Agent

 	 
	 	By  	/s/ Kin W. Cheng
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 	 	 
	 	J.P. MORGAN EUROPE LTD, as UK Lender

 	 
	 	By  	/s/ Alastair Stevenson
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	WACHOVIA BANK, N.A.

individually and as Syndication Agent

 	 
	 	By  	/s/ Christine P. Ball
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	CITIBANK, N.A.

 	 
	 	By  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	HSBC BANK USA, NATIONAL ASSOCIATION

 	 
	 	By  	/s/ Christian Bowers
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	THE ROYAL BANK OF SCOTLAND PLC

 	 
	 	By  	/s/ Tyler J. McCarthy
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	UNION BANK OF CALIFORNIA, N.A.

 	 
	 	By  	/s/ Brian Stearns
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION

 	 
	 	By  	/s/ Shahid Kathrada
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

 	 
	 	By  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	CITY NATIONAL BANK

 	 
	 	By  	/s/
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	FIRST BANK

 	 
	 	By  	/s/ David C. Walker
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	CALIFORNIA BANK & TRUST

 	 
	 	By  	/s/ Robert F. Edmonds
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	ISRAEL DISCOUNT BANK OF NEW YORK

 	 
	 	By  	/s/ Richard Tripaldi
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 
	 
	 	NATIXIS

 	 
	 	By  	/s/ Nicolas Regent
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:
 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	MANUFACTURERS BANK

 	 
	 	By  	/s/ Maureen Kelly
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	Address:

Attention:

Facsimile:exv10w1

Exhibit 10.1

MEDQUIST INC. LONG-TERM INCENTIVE PLAN

ARTICLE 1

PURPOSE OF THE PLAN

          1.1. Purpose. The purpose of the Plan is to assist the Company in attracting and retaining
key employees who are expected to contribute to the Company’s success and to achieve long-term
objectives which will inure to the benefit of all stockholders of the Company.

ARTICLE 2

DEFINITIONS

          2.1. “Award” shall mean a grant of Points to a Participant under Article 4 of the Plan.

          2.2. “Award Agreement” shall mean any written agreement, contract or other instrument or
document evidencing any Award granted by the Committee hereunder.

          2.3. “Base Value” shall mean the Equity Value on the last day of the calendar year immediately
preceding the Performance Period.

          2.4. “Benchmark Year” shall mean the calendar year prior to the calendar year in which vesting
of Points is being assessed pursuant to Section 6.2. For purposes of determining whether the
Equity Value for a particular Benchmark Year is less than the highest Equity Value for any
Benchmark Year, calendar year 2011 shall be treated as the first Benchmark Year.

          2.5. “Board” shall mean the Board of Directors of the Company.

          2.6. “Change of Control” shall mean (1) a change in the ownership of the Company or a change
in the ownership of a substantial portion of the Company’s assets, as determined pursuant to
Exhibit A attached hereto, or (2) any other event deemed to constitute a “Change of
Control” by the Board.

          2.7. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and
any successor thereto.

          2.8. “Committee” shall mean the Compensation Committee of the Board (or such other committee
as may be designated by the Board).

          2.9. “Company” shall mean MedQuist Inc., a New Jersey corporation.

          2.10. “Disability” shall mean termination of a Participant’s employment for “disability” as
defined in any employment or severance agreement the Participant may have with the Company. If no
such agreement exists, “Disability” shall mean termination of a Participant’s employment under
circumstances such that the Participant (1) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous

 

 

period of not less than twelve months, (2) is receiving income replacement benefits for a
period of not less than three months under an accident and health plan covering employees of the
Company, by reason of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not less than twelve
months, or (3) has been determined to be totally disabled by the Social Security Administration.

          2.11. “EBITDA” shall mean earnings before interest, taxes, depreciation and amortization, as
adjusted pursuant to Section 8.1.

          2.12. “Equity Value” as of any date shall mean, unless otherwise determined by the Committee,
latest 12-month EBITDA times a multiple to be determined by the Committee less short and long-term
debt, plus cash, as adjusted pursuant to Section 8.1.

          2.13. “Equity Value Appreciation” shall mean the difference between the Equity Value as of the
end of the Performance Period and the Base Value.

          2.14. “Participant” shall mean an executive or key employee who is selected by the Committee
to receive an Award under the Plan.

          2.15. “Performance Period” shall mean the period over which Equity Value Appreciation with
respect to an Award is measured.

          2.16. “Plan” shall mean the MedQuist Inc. Long-Term Incentive Plan, as amended or restated
from time to time.

          2.17. “Point” shall represent an interest in the Equity Value Appreciation that may be granted
to Participants under the Plan.

          2.18. “Point Value” with respect to each Point shall mean 0.01 percent of Equity Value
Appreciation.

ARTICLE 3

ELIGIBILITY AND ADMINISTRATION

          3.1. Eligibility. Any executive or other key employee of the Company shall be eligible to be
selected as a Participant.

          3.2. Administration. The Plan shall be administered by the Committee. The Committee shall
have full power and authority, subject to the provisions of the Plan and subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by
the Board, to: (i) select the employees to whom Awards may from time to time be granted hereunder;
(ii) determine the number of Points to be covered by each Award granted hereunder; (iii) determine
the terms and conditions, not inconsistent with the provisions of the Plan, of any Award granted
hereunder; (iv) determine whether, to what extent and under what circumstances any Award shall be
canceled or suspended; (v) interpret and administer the Plan and any instrument or agreement
entered into under or in connection with the Plan, including any Award Agreement; (vi) correct any
defect, supply any omission or reconcile any

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inconsistency in the Plan or any Award in the manner and to the extent that the Committee
shall deem desirable to carry it into effect; (vii) establish such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration of the Plan; and
(viii) make any other determination and take any other action that the Committee deems necessary or
desirable for administration of the Plan.

          Decisions of the Committee shall be final, conclusive and binding on all persons or entities,
including the Company, any Participant, any stockholder and any employee. A majority of the
members of the Committee may determine its actions.

          The Committee may delegate to a committee of one or more directors of the Company or, to the
extent permitted by law, to the CEO the right to grant Awards.

ARTICLE 4

GRANT OF AWARDS

          4.1. Total Number of Points. A total of 600 Points shall be authorized for grant under the
Plan during any Performance Period.

          4.2. Grant of Points. Participants (including those who become eligible to participate in the
Plan after the start of the Performance Period) may be granted Points at any time with respect to
each year in a Performance Period in the sole discretion of the Committee based upon the
performance of the Company and individual achievement. In addition, Points may be granted in the
sole discretion of the Committee at any time on or after the Effective Date to new hires or to
retain key employees. Generally the number of Points that may be granted will range from 0 to 15
for Senior Vice Presidents (target of 10) and from 0 to 7.5 for Vice Presidents (target of 5);
provided, however, that the Committee has full discretion to grant a number of Points above this
general range to any Participant as long as the total number granted with respect to a Performance
Period does not exceed the number provided in Section 4.1. Any Award shall be subject to the terms
and conditions of the Plan and to such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall deem desirable.

          4.3. Forfeitures. If any Points are forfeited, expire or otherwise terminate without payment,
the Points shall, to the extent of such forfeiture, expiration, or termination, again be available
for Awards under the Plan.

          4.4. Award Agreements. All Awards granted shall be evidenced by an Award Agreement.

ARTICLE 5

DETERMINATION OF POINT VALUE

          5.1. Performance Period. Except as provided in Section 8.2 or otherwise determined by the
Committee, a Performance Period shall be a period of three calendar years.

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          5.2. Determination of Point Value. As soon as practicable following the end of the
Performance Period and the release of the Company’s audited financials, the Committee shall
calculate the Equity Value Appreciation and Point Value for such Performance Period.

ARTICLE 6

VESTING AND PAYMENT OF AWARDS

          6.1. Vesting and Payment. Except as otherwise provided in Section 6.2 and Articles 7 and 8,
Points shall vest in one-third annual increments beginning on the March 31 following the last day
of the applicable Performance Period. Each vested Point shall entitle a Participant to a payment
in cash equal to the Point Value within 60 days of the vesting date. Except as otherwise provided
in Article 7, no Participant shall be eligible for a payment unless he or she is employed by the
Company on the applicable vesting date.

          6.2. Mandatory Deferrals. Notwithstanding the provisions of Section 6.1, except as provided
in Section 7.3 and Article 8, vesting of Points with respect to a particular Performance Period
shall be deferred in any year where the Equity Value as of the most recent Benchmark Year falls
below the highest Equity Value determined for any Benchmark Year. Any such deferred Points shall
vest on the March 31 following the Benchmark Year in which the Equity Value exceeds the highest
Equity Value attained for any Benchmark Year and payment shall be made within 60 days of the
vesting date.

ARTICLE 7

TERMINATION OF EMPLOYMENT PROVISIONS

          7.1. Prior to End of Performance Period. If a Participant’s employment with the Company
terminates for any reason prior to the end of the Performance Period, all Points granted with
respect to that Performance Period shall be forfeited.

          7.2. Other than for Death or Disability following the End of the Performance Period. If a
Participant’s employment with the Company terminates for any reason other than death or Disability
after the end of the Performance Period, all unvested Points granted with respect to that
Performance Period shall be forfeited.

          7.3. Death or Disability following the End of the Performance Period. If a Participant’s
employment with the Company terminates by reason of death or a Participant suffers a Disability
following the end of the Performance Period, any unvested Points with respect to completed
Performance Periods (including those deferred pursuant to Section 6.2) shall vest and be paid
within 60 days of death or Disability.

ARTICLE 8

ADJUSTMENT AND CHANGE OF CONTROL PROVISIONS

          8.1. Adjustments. In determining EBITDA, Equity Value and Equity Value Appreciation, the
Committee may exclude the impact of an event or occurrence which the Committee determines should
appropriately be excluded, including (a) restructurings, discontinued operations, extraordinary
items, and other unusual or non-recurring charges, (b) an event either not directly related to the
operations of the Company or not within the reasonable

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control of the Company’s management, or (c) a change in accounting standards required by
generally accepted accounting principles. In the event of any merger, reorganization,
consolidation, recapitalization, capital infusion, dividend or distribution (whether in cash,
shares or other property), stock split, reverse stock split, spin-off, asset purchase, asset sale,
or similar transaction or other change in corporate structure affecting the Company, the Committee
shall make such adjustments, in its sole discretion, as it deems equitable or appropriate.

          8.2. Impact of a Change of Control. Upon a Change of Control, any Awards outstanding,
including those deferred pursuant to Section 6.2, shall vest. The Point Value with respect to
Performance Periods in progress at the time of the Change of Control shall be calculated based on
the Equity Value as of the last completed quarter immediately preceding the Change of Control minus
the Base Value. Awards shall be paid within 60 days of such Change of Control.

ARTICLE 9

EFFECTIVE DATE; AMENDMENTS

          9.1. Effective Date. The Plan shall be effective as of January 1, 2009. The Plan shall
remain in effect until terminated by the Board, on which date the Plan will expire except as to
Awards then outstanding under the Plan. Such outstanding Awards shall remain in effect until they
have been settled or have expired.

          9.2. Amendment and Modification of the Plan. Subject to applicable law, the Board may, from
time to time, alter, amend, suspend or terminate the Plan as it shall deem advisable. No amendments
to, or termination of, the Plan shall in any way impair the rights of a Participant under any Award
previously granted without such Participant’s consent.

ARTICLE 10

MISCELLANEOUS

          10.1. Tax Withholding. The Company shall have the right to make all payments or distributions
pursuant to the Plan net of any applicable Federal, State and local taxes required to be paid or
withheld as a result of the settlement of an Award or any other event occurring pursuant to the
Plan. The Company shall have the right to withhold from wages or other amounts otherwise payable
such withholding taxes as may be required by law, or to otherwise require the Participant to pay
such withholding taxes. If the Participant shall fail to make such tax payments as are required,
the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to such Participant or to take such other action as may be
necessary to satisfy such withholding obligations.

          10.2. Transferability of Awards. No Award may be sold, assigned, transferred, pledged or
otherwise encumbered, other than by will or the laws of descent and distribution.

          10.3. Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor the grant of an
Award hereunder shall confer upon any employee the right to continue in the employment or service
of the Company or affect any right that the Company may have to terminate the employment or service
of (or to demote or to exclude from future Awards under the Plan) any such employee at any time for
any reason. Except as specifically provided by the

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Committee, the Company shall not be liable for the loss of existing or potential profit from
an Award granted in the event of termination of an employment or other relationship. No employee
or Participant shall have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of employees or Participants under the Plan.

          10.4. Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services performed or to be performed for the Company, division or business unit of the Company.
Any income or gain realized pursuant to Awards under the Plan constitute a special incentive
payment to the Participant and shall not be taken into account, to the extent permissible under
applicable law, as compensation for purposes of any of the employee benefit plans of the Company
except as may be determined by the Committee.

          10.5. Other Plans. Nothing contained in the Plan shall prevent the Board from adopting other
or additional compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific
cases.

          10.6. Severability. If any provision of the Plan shall be held unlawful or otherwise invalid
or unenforceable in whole or in part by a court of competent jurisdiction, such provision shall (a)
be deemed limited to the extent that such court of competent jurisdiction deems it lawful, valid
and/or enforceable and as so limited shall remain in full force and effect, and (b) not affect any
other provision of the Plan or part thereof, each of which shall remain in full force and effect.
If the making of any payment or the provision of any other benefit required under the Plan shall be
held unlawful or otherwise invalid or unenforceable by a court of competent jurisdiction, such
unlawfulness, invalidity or unenforceability shall not prevent any other payment or benefit from
being made or provided under the Plan, and if the making of any payment in full or the provision of
any other benefit required under the Plan in full would be unlawful or otherwise invalid or
unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent such
payment or benefit from being made or provided in part, to the extent that it would not be
unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under the Plan.

          10.7. Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for
incentive and deferred compensation. With respect to any payments not yet made to a Participant by
the Company, nothing contained herein shall give any such Participant any rights that are greater
than those of a general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations created under the
Plan; provided, however, that the existence of such trusts or other arrangements is consistent with
the unfunded status of the Plan.

          10.8. Governing Law. The Plan and all determinations made and actions taken thereunder, to
the extent not otherwise governed by the Code or the laws of the United States, shall be governed
by the laws of the State of New Jersey and construed accordingly.

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          10.9. Captions. The captions in the Plan are for convenience of reference only, and are not
intended to narrow, limit or affect the substance or interpretation of the provisions contained
herein.

          10.10. Code Section 409A. All provisions of this Plan shall be interpreted in a manner
consistent with Code Section 409A’s “short-term deferral” exemption. Notwithstanding the
preceding, the Company makes no representations concerning the tax consequences of participation in
the Plan under Code Section 409A or any other federal, state, or local tax law. Tax consequences
will depend, in part, upon the application of relevant tax law, including Code Section 409A, to the
relevant facts and circumstances. Participant should consult a competent and independent tax
advisor regarding the tax consequences of this Plan.

          10.11. Clawback. Notwithstanding anything to the contrary contained herein, an Award
Agreement may provide that an Award granted thereunder shall be cancelled if the Participant,
without the consent of the Company, while employed by or providing services to the Company or after
termination of such employment or service, violates a non-competition, non-solicitation or
non-disclosure covenant or agreement or otherwise engages in activity that is in conflict with or
adverse to the interest of the Company, including fraud or conduct contributing to any financial
restatements or irregularities, as determined by the Committee in its sole discretion. The
Committee may also provide in an Award Agreement that (a) a Participant will forfeit any gain
realized on the vesting of such Award if the Participant engages in any activity referred to in the
preceding sentence, or (b) a Participant must repay the gain to the Company realized under a
previously paid Award if a financial restatement reduces the amount that would have been earned
under such Performance Award.

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Exhibit A

The following rules are derived from Treasury Regulation 1.409A

-3(i)(5), and are to be construed in accordance with such regulation.

Change in the Ownership of the Company. 

          A change in the ownership of the Company will occur on the date that any one person (or more
than one person acting as a group, as defined below) acquires ownership of stock of the Company
which, together with stock held by such person or group, constitutes more than 50 percent of the
total fair market value or total voting power of the stock of the Company. However, if any one
person (or more than one person acting as a group) is considered to own more than 50 percent of the
total fair market value or total voting power of the stock of the Company, the acquisition of
additional stock by the same person or persons is not considered to cause a change in the ownership
of the Company (or to cause a change in the effective control of the Company). An increase in the
percentage of stock owned by any one person (or persons acting as a group) as a result of a
transaction in which the Company acquires its stock in exchange for property will be treated as an
acquisition of stock for purposes of this provision.

Change in the Ownership of a Substantial Portion of the Assets of the Company. 

          A change in the ownership of a substantial portion of the Company’s assets will occur on the
date that any one person (or more than one person acting as a group) acquires (or has acquired
during the 12-month period ending on the date of the most recent acquisition by such person or
persons) assets from the Company that have a total gross fair market value equal to or more than 40
percent of the total gross fair market value of all of the assets of the Company immediately before
such acquisition or acquisitions. For this purpose, “gross fair market value” means the value of
the assets of the Company, or the value of the assets being disposed of, determined without regard
to any liabilities associated with such assets.

          No change in the ownership of a substantial portion of the assets of the Company will occur as
the result of a transfer of assets to an entity that is controlled by the shareholders of the
Company immediately after the transfer. A transfer of assets by the Company is not treated as a
change in the ownership of such assets if the assets are transferred to—

	 	(i)	 	A person who was a shareholder of the Company immediately before the asset transfer, in
exchange for or with respect to the Company’s stock;

	 	(ii)	 	An entity, 50 percent or more of the total value or voting power of which is owned,
directly or indirectly, by the Company;

	 	(iii)	 	A person (or more than one person acting as a group) that owns, directly or indirectly, 50
percent or more of the total value or voting power of all the outstanding stock of the Company;
or

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	 	(iv)	 	An entity, at least 50 percent of the total value or voting power of which is owned,
directly or indirectly, by a person described in the preceding clause.

For these purposes, a person’s status is generally determined immediately after the transfer of the
assets. For example, a transfer to a corporation in which the Company has no ownership interest
before the transaction but which is a majority-owned subsidiary of the Company after the
transaction is not treated as a change in the ownership of the assets of the Company.

Persons Acting As a Group

          Persons will not be considered to be acting as a group solely because they purchase or own
stock or assets of the Company at the same time, or as a result of the same public offering.
However, persons will be considered to be acting as a group if they are owners of the corporation
that enters into a merger, consolidation, purchase or acquisition of stock, or similar business
transaction with the Company. If a person (including an entity) owns stock in both the Company and
the corporation that enters into a merger, consolidation, purchase or acquisition of stock, or
similar transaction with the Company, such shareholder will be considered to be acting as a group
with other shareholders only with respect to the ownership in the Company before the transaction
giving rise to the change, and not with respect to the ownership interest in the other corporation.

Attribution of Stock Ownership.

          For purposes of the change-of-control rules set forth in this exhibit, Section 318(a) of the
Internal Revenue Code applies to determine stock ownership.

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