UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-9008
ANDREWS GROUP INCORPORATED
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 95-2683875
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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3200 WINDY HILL ROAD, SUITE 1100-WEST, ATLANTA, GEORGIA 30339
(Address of principal executive offices) (Zip Code)
770-955-0045
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the
issuer's classes of common stock as of
the latest practicable date.
Class Outstanding at May 5, 1996
- ------------------------------- --------------------------
Common Stock, $1.00 par 1,000
As of May 5, 1996, all of the Registrant's outstanding
common stock was indirectly held by Mafco Holdings Inc.
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions, except share data)
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---------- ----------
<S> <C> <C>
ASSETS
Cash $ 66.8 $ 114.5
Trade receivables, net 370.2 408.8
Inventories 94.5 82.4
Television program contract rights 16.8 23.7
Film costs, net 82.6 83.8
Deferred taxes 52.3 55.2
Prepaid expenses and other 95.4 95.8
---------- ----------
Total current assets 778.6 864.2
Property, plant and equipment, net 295.4 290.7
Intangible assets, net 2,424.3 2,440.0
Loans to affiliates, net 524.8 441.0
Other assets 218.6 228.8
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$ 4,241.7 $ 4,264.7
========== ==========
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Current portion of long-term debt $ 84.1 $ 74.9
Note payable -- 16.7
Accounts payable and accrued expenses 350.4 394.5
Television program contracts payable 20.2 26.9
Deferred income 29.6 46.8
Participations and residuals payable 52.9 43.4
---------- ----------
Total current liabilities 537.2 603.2
Long-term debt 2,960.0 2,951.0
Indebtedness to affiliates 418.4 307.1
Other liabilities 169.6 187.2
Minority interest 442.3 449.7
Redeemable preferred stock of subsidiaries 340.6 340.4
Commitments and contingencies
Stockholder's deficit:
Common stock, $1.00 par value; 1,000 shares
authorized, issued and outstanding
Additional paid-in-capital 40.6 40.2
Accumulated deficit (667.2) (614.5)
Cumulative translation adjustment 0.2 0.4
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Total stockholder's deficit (626.4) (573.9)
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$ 4,241.7 $ 4,264.7
========== ==========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Millions)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
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<S> <C> <C>
Net revenues $ 350.8 $ 274.4
Operating expenses:
Direct costs 215.9 172.0
Selling, general and administrative expenses 103.8 80.3
Amortization of goodwill and intangibles 19.7 12.6
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Operating income 11.4 9.5
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Other (expense) income:
Interest expense (85.1) (65.3)
Interest and net investment income 15.6 9.9
Gain on sale of business interests, net -- 54.9
Amortization of debt issuance costs and other (5.9) (4.4)
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(75.4) (4.9)
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(Loss) income before income taxes, minority interest and equity
in net income of investees (64.0) 4.6
Benefit (provision) for income taxes 3.1 (43.3)
Minority interest in loss of subsidiaries 8.2 1.9
Equity in net income of investees -- 0.1
-------- --------
Net loss $ (52.7) $ (36.7)
======== ========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (52.7) $ (36.7)
-------- --------
Adjustments to reconcile net loss to net cash flows
from operating activities:
Depreciation and amortization 34.2 23.7
Noncash interest expense 26.9 23.9
Undistributed earnings of investees -- (0.1)
Minority interest in loss of subsidiaries (8.2) (1.9)
Gain on sale of business interests -- (54.9)
Excess of television program contract rights amortization
over payments (0.6) 2.1
Film cost amortization (under) over additions (2.7) 3.8
Changes in assets and liabilities, net of effects of acquisitions and dispositions
Decrease (increase) in assets 27.3 (19.7)
Decrease in liabilities (68.7) (1.8)
-------- --------
8.2 (24.9)
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Net cash flows from operating activities (44.5) (61.6)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Broadcast stations deposits and acquisitions, net of cash acquired -- (360.1)
Proceeds from sale of business interests -- 253.0
Other acquisitions, investments and advances (3.9) 0.8
Loans to affiliates, net (83.8) 3.3
Capital expenditures (17.7) (11.5)
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Net cash flows from investing activities (105.4) (114.5)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long term debt 59.3 214.7
Repayment and repurchases of debt (69.9) (51.7)
Issuance of preferred stock, common stock, stock options and warrants 1.2 0.5
Loans from affiliates, net 111.3 21.1
Increase in restricted cash -- (77.3)
Debt issuance costs and other, net 0.4 (0.2)
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Net cash flows from financing activities 102.3 107.1
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Effect of exchange rate changes on cash (0.1) (0.8)
Net decrease in cash (47.7) (69.8)
Cash at beginning of the period 114.5 175.7
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Cash at end of the period $ 66.8 $ 105.9
======== ========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
(unaudited)
Three Months Ended
March 31,
--------------
1996 1995
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Supplemental schedule of cash flow information:
Interest paid during the period 76.2 $ 46.3
Taxes paid during the period 7.8 5.6
Purchase of television program contract rights 2.8 1.9
Argyle stations purchase:
Fair value of assets acquired $ 766.1
Purchase option applied to purchase price (100.0)
Cash paid, net of cash received (360.1)
--------
Liabilities assumed $ 306.0
========
See notes to consolidated financial statements.
5
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of Andrews Group Incorporated ("Andrews" or the "Company") and its
majority-owned subsidiaries after elimination of all material intercompany
accounts and transactions. The Company is a wholly owned subsidiary of
MacAndrews & Forbes Holdings Inc. ("MacAndrews Holdings") which is a wholly
owned subsidiary of Mafco Holdings Inc. ("Mafco Holdings"). The unaudited
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes contained in the Company's
1995 Form 10-K. In the opinion of management, all adjustments (which include
only normal recurring accruals) necessary for a fair presentation have been
made.
Certain reclassifications have been made to conform to the current
period's presentation.
2. ACQUISITIONS AND DISPOSITIONS
SKYBOX
On April 27, 1995, pursuant to an Agreement and Plan of Merger dated
as of March 8, 1995 (the "SkyBox Merger Agreement"), among SkyBox
International Inc. ("SkyBox"), Marvel and an indirect wholly owned subsidiary
of Marvel, Marvel acquired all of the issued and outstanding shares of SkyBox
common stock for $16 per share. The purchase price, including fees, expenses
and other acquisition costs, totaled $165.0. The transaction was accomplished
through a tender offer and subsequent merger (the "SkyBox Acquisition"). The
purchase price includes an obligation to former SkyBox stockholders who did
not exchange their shares.
The SkyBox Acquisition was accounted for using the purchase method of
accounting. The purchase price has been allocated to assets and liabilities
based on their respective fair values at April 27, 1995. The fair value of
assets acquired and liabilities assumed were $37.0 and $30.4, respectively.
WSBK-TV
In March 1995 NWCG sold its investment in WSBK-TV (the "Boston
Station") for gross proceeds of $107.5 which resulted in a gain of $40.9. NWCG
repaid $19.5 of the Bank Credit Agreement Loans in March 1995 and $77.3 of the
Step-Up Notes in April 1995 from the estimated net proceeds of the WSBK sale.
ARGYLE STATIONS
NWCG purchased certain debt and equity securities of Argyle
Television Holding Inc. ("Argyle") for total consideration of approximately
$750.4, including the $100.0 in cash paid for an option in 1994 and assumption
of debt of approximately $283.6. Argyle controlled four VHF television
stations, KDFW-TV (Dallas, Texas), KTBC-TV (Austin, Texas), KTVI-TV (St.
Louis, Missouri) and WVTM-TV (Birmingham, Alabama). For financial reporting
purposes, the acquisition occurred on March 31, 1995. FCC approval for change
in control of the television stations occurred on April 14, 1995. The
acquisition has been accounted for as a purchase.
6
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
PRO FORMA FINANCIAL INFORMATION
The following unaudited condensed pro forma financial information
gives effect, as of January 1, 1995, to the acquisition of SkyBox and the four
Argyle stations, the sale of the Boston Station, borrowings necessary to fund
the acquisitions, repayment of a portion of NWCG's debt, and the issuance of
NWCG preferred stock. The pro forma financial information does not necessarily
reflect the future results or the results that would have occurred had these
transactions actually occurred on January 1, 1995.
Pro Forma
-----------------------
Three Months Ended
March 31, 1995
-----------------------
Net revenues................................ $324.4
=======================
Net loss.................................... (39.2)
=======================
3. TOY BIZ IPO
On March 2, 1995, Toy Biz Inc. ("Toy Biz") completed an initial
public offering (the "Toy Biz IPO") in which it issued and sold 2,750,000
shares of class A common stock at $18 per share. The net proceeds to Toy Biz,
after deducting commissions and estimated offering expenses, of $44.1 were
used to pay outstanding amounts due under subordinated notes held by Marvel
and the sole stockholder of the predecessor to Toy Biz and for working capital
and general corporate purposes. In March 1995, the Company recorded a gain of
approximately $14.0 in connection with the Toy Biz IPO in recognition of the
net increase in value of Marvel's investment in Toy Biz. In conjunction with
the Toy Biz IPO, Marvel's equity ownership was reduced to approximately 36.6%
and its voting control increased to approximately 85.3%, and, as a result of
the increase, the consolidated financial statements of the Company include the
results of operations, financial position and cash flow of Toy Biz. For
periods prior to the Toy Biz IPO, Toy Biz was accounted for under the equity
method.
4. INVENTORIES
March 31, December 31,
1996 1995
------------ ------------
Raw materials $23.8 $23.7
Work-in-process 21.4 22.3
Finished goods 69.6 58.8
Less: Reserve for obsolescence (20.3) (22.4)
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$94.5 $82.4
===== =====
7
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
(UNAUDITED)
5. LONG-TERM DEBT
On April 9, 1996, Marvel IV Holdings Inc. ("Marvel IV Holdings")
amended the Marvel IV Credit Agreement. In connection with such amendment (i)
the term loan was paid down to $5.2 and the revolver was repaid in full with
the proceeds from the collection of a loan from an affiliate and (ii) the term
loan and revolving credit commitments were reduced to $5.2 and $144.8,
respectively.
6. RESTRUCTURING OF OPERATIONS
In the fourth quarter of 1995, Marvel recorded restructuring charges
of $25.0 related primarily to publishing and confections operations. As part
of the restructuring, Marvel has terminated approximately 275 employees,
covering editorial, production, distribution and administrative employee
groups and, accordingly, provided for $10.7 of termination benefits, of which
$4.9 has been paid as of March 31, 1996. Additionally, approximately $6.7
relates to facility closure and consolidation costs, of which $4.1 has been
paid as of March 31, 1996, and $7.6 relates to other costs, of which $4.0 has
been paid as of March 31, 1996. The remaining amounts, as of March 31, 1996,
are included in accounts payable and accrued expenses.
7. RELATED PARTY TRANSACTIONS
At March 31, 1996 and December 31, 1995, the Company and its
subsidiaries had advances from Mafco Holdings and its subsidiaries of $418.4
and $307.1, respectively. These advances bear interest primarily at 2% over
the prime rate.
At March 31, 1996 and December 31, 1995, Marvel IV Holdings had
advances of $524.8 and $441.0 to Mafco Holdings and its subsidiaries
representing the net proceeds from the borrowings under the Marvel IV Credit
Agreement.
At May 5, 1996, an aggregate of 78.0 million shares of common stock
of Marvel were pledged to secure the indebtedness and letters of credit of
Marvel Holdings, Parent Holdings, Holdings III and Four Star Holdings and 2.9
million shares of common stock of Marvel are subject to a negative pledge
under the terms of the Marvel Holdings Notes. At May 5, 1996, an aggregate of
34.5 million shares of NWCG owned by the Company were pledged to secure the
NWCG Holdings Notes.
During the first quarter of 1996, Holdings III received $5.7 of
capital contributions which were used to pay interest on the Holdings III
Notes.
8
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
RESULTS OF OPERATIONS
General
The Company operates in the youth entertainment segment through its
approximately 79% ownership in Marvel. Marvel is a leading creator, publisher
and distributor of youth entertainment products for domestic and international
markets based on action adventure characters owned by Marvel, licenses from
professional athletes, sports teams and leagues and popular entertainment
characters and properties owned by third parties. Marvel also licenses its
characters and properties for consumer products, television and film and
advertising promotions. Marvel's products include comic books and other
publications, sports and entertainment trading cards, children's activity
stickers, Toy Biz toys, adhesives and confectionery products.
The Company operates in the broadcasting and production and
distribution segments through its approximately 42% ownership interest (83%
voting interest) in NWCG, assuming conversion of NWCG Series B Preferred
Stock. NWCG operates broadcast television stations, a television production
company, and a filmed entertainment distribution business.
Results of Marvel
Over the past five years, Marvel has diversified into a broadly based
youth entertainment company. As a result, an increasing portion of Marvel's
net revenues have been derived from businesses other than comic book
publishing. For example, in 1991, net revenues from publishing were
approximately 86% of Marvel's total net revenues as compared to approximately
18% in 1995. Marvel's business has been augmented by the manufacture,
marketing and distribution of sports and entertainment trading cards and
children's activity stickers and the licensing of Marvel's characters for
consumer products, television and film, advertising promotions and toys.
Although Marvel's consolidated net revenues have increased as a result of
diversification, certain changes in market conditions associated with its
publishing and trading card operations adversely affected Marvel's net
revenues and operating results in recent periods.
As a result of a significant reduction in speculative purchases of
comic books, Marvel has undertaken several strategic actions which it believes
will have the long-term effect of bolstering its publishing business. Marvel
is eliminating unprofitable and marginally profitable titles to create a
strong line-up comprising Marvel's most popular and most profitable titles;
focusing its comic books more on editorial content and less on physical
product features and enhancements; and streamlining operations through
introduction of new technology and consolidation of facilities. Combined with
the reduction in titles, these measures will reduce editorial, production,
distribution, manufacturing and administrative overhead expense. Marvel
believes these actions, together with the exclusive distribution by Heroes
World of Marvel's comic books to the direct market, which commenced July 1995,
are expected to improve future operating results of Marvel's publishing
business.
For 1994 and 1995, Marvel believes that there was a general
contraction in the sports trading card market, related in part to lower
speculative purchases. This contraction was compounded by the
9
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
baseball, hockey and basketball labor situations, which adversely affected
sports trading card sales and returns for those periods. Although Major League
Baseball resumed in April 1995, there still is no collective bargaining
agreement in effect between the owners and players, and the level of fan
interest has not returned to the levels experienced prior to the 1994 strike.
Consistent with decreased fan interest, Marvel believes that the labor
situations in professional sports have contributed to decreased trading card
consumer interest and therefore, generally decreased levels of consumer
purchases of all trading cards. Accordingly, Marvel believes that the overall
trading card industry has been negatively affected, causing Marvel to
experience lower sales, higher returns, and higher inventory obsolescence
during 1995, including an increase in reserves in the second quarter of 1995
of approximately $40.0 for trading card returns and inventory obsolescence.
Throughout 1995, these conditions resulted in Marvel and the trading
card industry in general continuing to experience lower sales and higher
returns, primarily related to distribution channels other than trading card
specialty stores. Marvel has revamped its trading card business such that
distribution of sports trading card products will be concentrated in trading
card specialty stores and selected mass market accounts. In connection
therewith, Marvel increased reserves as of December 31, 1995 by an additional
amount of approximately $70.0, principally for product returns from the points
of distribution eliminated and for the obsolescence of certain 1995 inventory.
As a result of this change in strategy, Fleer/SkyBox is focusing its sales
efforts on those retailers and distributors with strong performance histories.
Marvel believes that these distribution channels, with their focused customer
base and proven efficiencies, should allow Fleer/SkyBox to realize an
improvement in operating income in the future.
Also as part of the revamping of Fleer, operational overhead has been
reduced through the closure of Fleer's Philadelphia facility, which had been
used for confections and trading card manufacturing. The confections operation
has been consolidated at Fleer's Byhalia, Mississippi plant and all of the
trading card manufacturing has been outsourced. Marvel anticipates additional
reductions in future operating expenses of Fleer/SkyBox due to the
concentration of sales activities to trading card specialty stores and
selected mass market accounts.
As a result of Marvel's restructuring activities, Marvel reflected in
results of operations for 1995 an additional $25.0 charge related to
severance, consolidation and closure of facilities, and other costs associated
with its publishing, confections and trading card business.
With these actions, Marvel has simplified and refocused its
publishing and trading card operations by concentrating on the strongest
elements of the businesses, delivering popular products to a motivated
customer base and using more efficient channels of distribution. Marvel
believes that these actions will position the Company for an improvement in
the operating performance of these businesses. The extent of improvement will
be determined by, among other things, the state of the markets in which
Marvel's products are sold and the level of reception by consumers to Marvel's
changes in these businesses and to Marvel's products.
Marvel expects that there will continue to be year to year
fluctuations in the net revenues and profitability of its individual
businesses. However, Marvel believes that its continued diversification
10
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
into a broad based youth entertainment company will help to mitigate the
effects of such fluctuations on overall net revenues and profitability.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THREE MONTHS ENDED
MARCH 31, 1995
The Company's net revenues in 1996 were $350.8 compared with $274.4
in 1995. Revenues in 1996 include $189.0 from the Company's youth
entertainment segment and $161.8 from the Company's broadcasting and
production and distribution segment. Revenues in 1995 include $159.5 from the
Company's youth entertainment segment and $114.9 from the Company's
broadcasting and production and distribution segment.
The increase in revenues from the youth entertainment segment
reflects an increase of $25.3 in toy revenues, a $14.5 increase in trading
card and sticker net revenues and $2.2 in other revenues, partially offset by
an $11.9 decrease in net publishing revenues and a $0.6 decrease in licensing
revenues. The increase in trading card and sticker net revenues was primarily
attributable to the SkyBox Acquisition and, to a lesser extent, the
international sale of trading cards by Panini. The increase in toy revenues
was principally due to the consolidation of Toy Biz for a full quarter in 1996
as compared to only one month in 1995, or from the date of Toy Biz's IPO in
March 1995, and its expanded product line. The decrease in net publishing
revenues was due to the reduction of titles, in accordance with Marvel's
business strategy, and the discontinuance commencing in July 1995 of the
distribution by Heroes World of comic book publications other than Marvel's
titles. Licensing revenues will vary depending on the volume and extent of
licensing agreements entered into during any particular financial period.
The increase in revenues from the television entertainment segment
reflects an increase in broadcasting revenues of $27.0 for the four stations
acquired on March 31, 1995 from Argyle and an increase of $4.1 for the eight
original stations owned for both periods ("Eight Stations"), partially offset
by a decrease of $5.7 reflecting the sale of the Boston Station in March of
1995. On a same station basis for both periods, net revenue increased $1.6 due
primarily to political advertising. Production and distribution revenue
increased $21.5 or 45.1% primarily due to increases in network and cable
revenues, reflecting substantially increased production activity.
Direct costs for 1996 and 1995 relates to the youth entertainment
segment ($113.9 and $96.9, respectively) and to the broadcasting and
production and distribution segment ($102.0 and $75.1, respectively). The
youth entertainment segment's direct costs as a percentage of sales was 60% in
1996 and 61% in 1995, reflecting a reduction of unprofitable titles in
Marvel's publishing business, a reduction in distribution at Heroes World and
an improvement in licensing margins, offset by an unfavorable product mix for
trading cards and sticker collections and toys as compared to 1995. The
increase in broadcasting direct costs reflects an increase related to the
acquisition of the Argyle stations and an increase for the Eight Stations,
partially offset by a decrease reflecting the sale of the Boston Station in
March of 1995. Production and distribution direct costs increased due
primarily to amortization of production costs associated with increased
production activity.
Selling, general and administrative ("SG&A") expenses in 1996
increased by $23.5 to $103.8. The youth entertainment segment's SG&A expenses
increased from $45.3 to $56.7. The increase of
11
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
$11.4 was mainly attributable the consolidation of Toy Biz's results for a
full quarter in 1996, the Sky Box Acquisition in the second quarter of 1995
and the effects of the expansion of the Company's Heroes World operations,
partially offset by a reduction in SG&A as a result of the restructuring of
its publishing and confectionery operations. The broadcasting and production
and distribution segment's SG&A expenses were $38.7 and $30.1 in 1996 and
1995, respectively. The increase in broadcasting SG&A expenses primarily
reflects an increase related to the acquisition of Argyle stations and an
increase for the Eight Stations, partially offset by a decrease reflecting the
sale of the Boston Station in March 1995. Also included in SG&A expenses are
$8.4 and $4.9 of corporate overhead expenses in 1996 and 1995, respectively.
Amortization of goodwill and intangibles increased to $19.7 in 1996
from $12.6 in 1995 primarily due to the acquisition of the Argyle stations and
the SkyBox Acquisition.
The Company recorded a gain of $54.9 in 1995 in connection with the
sale of the Boston Station and the Toy Biz IPO.
Interest expense increased to $85.1 in 1996 from $65.3 in 1995
primarily due to borrowings in connection with the SkyBox Acquisition,
increased borrowings used for the acquisition of broadcast television stations
and to fund increased production activity and increased borrowings under the
Marvel IV Credit Agreement.
The benefit (provision) for income taxes was $3.1 and ($43.3) in 1996
and 1995, respectively. The tax benefit in 1996 primarily reflects taxes on
foreign source income of Marvel and taxes on Toy Biz operations, offset by a
benefit from Marvel's remaining operations and a tax benefit related to NWCG
operations. The tax provision in 1995 reflected the recognition of income taxes
on the sale of WSBK by NWCG. The Company has not recorded a benefit in 1995 and
1996 for its separate company loss since Andrews Group's ownership of Marvel was
reduced below 80% during 1994 resulting in a deconsolidation for tax purposes.
Financial Condition, Liquidity and Capital Resources
(a) Marvel
Marvel had capital expenditures of $11.1 in the first quarter of 1996
which were primarily used for the Adespan adhesives facility, tooling and
molds and capitalized product development costs, primarily related to Toy Biz.
During March 1996, Marvel amended its credit agreements with its
lenders to provide for, among other things, an additional $25.0 revolving
credit facility which will expire on December 31, 1996. This revolving credit
facility is pari passu with the loans extended by the banks pursuant to
Marvel's existing loan agreements. Marvel also secured all of its bank loans
with the domestic assets of Marvel.
12
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
At May 6, 1996, Marvel's outstanding bank indebtedness was $609.1, of
which $15.9 relates to the borrowings for the Adespan adhesives facility.
Marvel had $40.5 available under its credit facilities. In addition, there was
$30.0 available under the Toy Biz line of credit at May 6, 1996.
Marvel anticipates that borrowings under Marvel's various credit
agreements will be paid from internally generated funds of Marvel or from
other sources, which may include the sale of debt securities of Marvel.
Management also anticipates that internally generated funds, as well as
proceeds from borrowings under Marvel's Amended and Restated Credit Agreement
and the Toy Biz credit facility or any amendment thereto will be sufficient to
meet working capital and capital expenditure requirements.
(b) NWCG
At March 31, 1996, NWCG has total outstanding debt of $987.0. NWCG
has limited additional borrowing capacity under its borrowing facilities.
Significant expansion of NWCG's broadcasting or production segments will
require additional funding not currently available to NWCG.
To service the currently outstanding debt, NWCG plans to utilize
broadcasting and production operating cash flow. NWCG believes that operating
cash flow will be sufficient to satisfy current requirements for operating,
investing and financing activities of NWCG, including debt service prior to
final maturity. In order to meet principal payments upon the final maturity of
its various debt facilities outstanding, the earliest of which occurs in 1998,
NWCG will be required to adopt one or more alternatives, such as refinancing
or restructuring its indebtedness, selling material assets or operations or
seeking additional capital contributions. NWCG currently anticipates that any
other necessary financing may be obtained through restructuring or refinancing
outstanding capitalization or possibly through additional equity or debt
financings or additional bank credit arrangements. Should such additional
sources of financing be needed to fund acquisitions or operations and not be
obtainable, NWCG's liquidity would be severely adversely affected. There can
be no assurance that any of such actions could be effected on satisfactory
terms, that they would enable NWCG to continue to satisfy NWCG's capital
requirements or that they would be permitted by the terms of existing or
future debt agreements.
NWCG's capital budget for 1996 is approximately $30.0, primarily for
the broadcasting segment. In connection with the broadcast stations' change in
affiliation to the Fox Network, the broadcasting segment provides more
locally-produced programming which requires additional capital expenditures
and operating expenses.
(c) Corporate and other subsidiaries
In order to meet principal payments upon the final maturity of its
various debt facilities outstanding, the earliest of which occur in 1998, NWCG
Holdings, Holdings III, Parent Holdings and Marvel Holdings will be required
to adopt one or more alternatives, such as borrowing funds, selling its equity
securities or seeking capital contributions or loans from Mafco Holdings or
affiliates.
13
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
Andrews' corporate cash requirements consist primarily of debt
service and administrative expenses. The Company's principal source of
liquidity at the corporate level is expected to consist of advances from Mafco
Holdings and affiliates. At March 31, 1996 and December 31, 1995, the Company
and its subsidiaries had advances from Mafco Holdings and its subsidiaries of
$418.4 and $307.1, respectively.
On April 9, 1996, Marvel IV Holdings Inc. ("Marvel IV Holdings")
amended the Marvel IV Credit Agreement. In connection with such amendment (i)
the term loan was paid down to $5.2 and the revolver was repaid in full with
the proceeds from the collection of a loan from an affiliate and (ii) the term
loan and revolving credit commitments were reduced to $5.2 and $144.8,
respectively.
At May 6, 1996, an aggregate of 78.0 million shares of common stock
of Marvel were pledged to secure the indebtedness and letters of credit of
Marvel Holdings, Parent Holdings, Holdings III and Four Star Holdings and 2.9
million shares of common stock of Marvel are subject to a negative pledge
under the terms of the Marvel Holdings Notes. At May 6, 1996, an aggregate of
34.5 million shares of NWCG owned by the Company were pledged to secure the
NWCG Holdings Notes.
14
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is a party to various legal proceedings as described
in previous filings. During the quarter, there were no material developments
in any of such proceedings.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.45* - Third Amendment to the Second Amended and Restated Credit
Agreement dated as of April 9, 1996
10.1 Employment Agreement, dated as of January 1, 1996, by and
between New World Communications Group Incorporated ("NWCG")
and Farrell Reynolds (incorporated by reference to Exhibit
10.1 of the NWCG Form 10-Q for the quarter ended March 31,
1996).
27* - Financial Data Schedule
(b) Reports on Form 8-K
None
* Filed herein.
15
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANDREWS GROUP INCORPORATED
(Registrant)
By: /s/ Joseph P. Page
--------------------------------
May 13, 1996 Joseph P. Page
Executive Vice President and
Chief Financial Officer
<PAGE>
ANDREWS GROUP INCORPORATED AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ANDREWS GROUP INCORPORATED
(Registrant)
By: /s/ Laurence Winoker
---------------------------------------
May 13, 1996 Laurence Winoker
Vice President and Controller
(Principal Accounting Officer)
THIRD AMENDMENT
Dated as of April 9, 1996
This THIRD AMENDMENT among Marvel IV Holdings Inc., a Delaware
corporation (the "Borrower"), Mafco Holdings Inc., a Delaware corporation
("Mafco"), Marvel V Holdings Inc., a Delaware corporation ("Borrower Parent"),
the lenders parties to the Credit Agreement referred to below (the "Lenders")
and Citibank, N.A., as agent (the "Agent") for the Lenders thereunder.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders and the Agent have entered
into a Second Amended and Restated Credit Agreement dated as of December 15,
1995, as heretofore amended (said agreement, as so amended being the "Credit
Agreement"; the terms defined therein being used herein as therein defined
unless otherwise defined herein).
(2) FN Parent intends to issue up to $455,000,000 aggregate
principal amount of Senior Notes due 2003.
(3) After giving effect to the application of the net cash
proceeds from the issuance by FN Parent of the Senior Notes due 2003 the Term A
Commitments shall be terminated, the Term B Commitments shall be $5,232,558.14
and the Revolving Credit Commitments shall be $144,767,441.86, and there will be
no more than $5,232,558.14 outstanding under the Term B Facility and no more
than $104,767,441.86 outstanding under the Revolving Credit Facility.
(4) The Borrower has requested that the Lenders agree to
amend the Credit Agreement, the Borrower Security Agreement, the Mafco Guaranty,
the Borrower Parent Security Agreement, the Borrower Parent Guaranty and the
Equity Contribution Agreement to permit the issuance of such Debt by FN Parent
and other related changes in the terms of the Loan Documents.
(5) The Lenders are, on the terms and conditions stated
below, willing to grant the request of the Borrower, and the Borrower and the
Lenders have agreed to amend the Credit Agreement, the Borrower Security
Agreement, the Mafco Guaranty, the Borrower Parent Security Agreement, the
Borrower Parent Guaranty and the Equity Contribution Agreement as hereinafter
set forth.
2
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date on which all of the conditions precedent
set forth in Section 7 hereof have been satisfied or waived, hereby amended as
follows:
(a) Section 1.01 shall be amended by adding in the correct
alphabetical order the following definitions:
"`First Gibraltar' means First Gibraltar Holdings Inc.,
a Delaware corporation."
"`First Gibraltar Charter Document' means the restated
certificate of incorporation of First Gibraltar."
"`First Gibraltar Loan Agreement' means the Loan
Agreement dated as of the Third Amendment Effective Date between the Borrower
Parent and First Gibraltar, as amended from time to time in accordance with its
terms."
"`FN Parent Debt' means up to $450,000,000 aggregate
principal amount of Senior Notes due 2003 to be issued by FN Parent in
accordance with the terms of the Mafco Guaranty."
"`FN Parent Debt Documents' means the indenture and any
other agreement or instrument pursuant to which the FN Parent Debt is issued or
which governs the terms of the FN Parent Debt."
"`Third Amendment' means the Third Amendment dated as of
the April 9, 1996 to this Agreement among the Borrower, Mafco, Borrower Parent,
the Lenders and the Agent."
"`Third Amendment Effective Date'" has the meaning
specified for such term in Section 7 of the Third Amendment."
(b) The definition of "A Company" in Section 1.01 shall be
amended by inserting immediately after the name "FN Holdings" the name "First
Gibraltar".
(c) The definition of "Designated Persons" in Section 1.01
shall be amended in full to read as follows:
"`Designated Persons' means the Borrower, Coleman
Guarantor, New World Guarantor and C&F Guarantor.
3
(d) The definition of "FN Documents" in Section 1.01 shall
be amended by inserting immediately after the phrase "the New FN Holdings Debt
Documents" the phrase, "the FN Parent Debt Documents".
(e) The definition of "Loan Documents" in Section 1.01 shall
be amended by deleting the phrase therein "and the FN Parent Loan Agreement" and
replacing such phrase with the phrase "and the First Gibraltar Loan Agreement".
(f) The definition of "Net Equity Value" in Section 1.01
shall be amended by (A) adding the word "and" at the end of clause (iii)
thereof, (B) replacing the phrase "; and" at the end of clause (iv) thereof with
"." and (C) deleting clause (v) thereof.
(g) The definition of "Second Net Equity Contribution
Amount" in Section 1.01 shall be deleted in its entirety.
(h) The definition of "Termination Date" in Section 1.01
shall be amended in full to read as follows:
"`Termination Date' means the earliest to occur of (a)
June 30, 1996, (b) the date on which the sum of (x) the aggregate principal
amount of Term B Advances repaid or prepaid by the Borrower on and after the
Third Amendment Effective Date (without giving any effect to any repayments or
prepayments contemplated by the Third Amendment) plus (y) the aggregate
principal amount of permanent reductions in the Revolving Credit Commitments on
and after the Third Amendment Effective Date (without giving any effect to any
permanent reduction of the Revolving Credit Commitments contemplated by the
Third Amendment) equals or exceeds $110,000,000 or (c) the date of termination
in whole of the Revolving Credit Commitments and the Term B Commitments pursuant
to Section 2.04 or 6.01.
(i) Section 2.01(d) shall be amended by adding to the end of
the first sentence thereof the following proviso:
"; provided, however, that on each day, after giving
effect to any Revolving Credit Borrowing on such day, the aggregate amount of
the Unused Revolving Credit Commitments of all of the Revolving Credit Lenders
shall not be less than $40,000,000."
(j) Section 2.05(b)(i) shall be amended in its entirety to
read as follows:
4
"(i) The Borrower shall, on the date of deposit of
each cash equity contribution in the Borrower Collateral Account as result of a
loan made by First Gibraltar to the Borrower Parent pursuant to the terms of the
First Gibraltar Loan Agreement that relates solely to net income of the Bank
(excluding, to the extent included in net income, (1) any gains (net of taxes)
from the sale of deposits and property, plant and equipment related to such
deposits, and (2) any net income that is attributable to the recognition of the
deferred tax asset-net operating loss carry forwards of the Bank), (x) pay
interest and fees payable in respect of the Facilities and expenses of the Agent
(including the reasonable fees and expenses of counsel to the Agent), in each
such case, on the date of application provided for in this Section 2.05(b)(i)
(the amount of each such cash equity contribution less the amounts, if any, paid
by or on behalf of the Borrower pursuant to clause (x) above shall be referred
to in this Section 2.05(b)(i) as the "Net Equity Contribution Amount") and (y)
apply such Net Equity Contribution Amount to the making of a prepayment in such
amount. Each such prepayment shall be applied pro rata to (A) the Term B
Facility and (B) the Revolving Credit Facility as set forth in Section
2.05(b)(ix) below."
(k) Section 2.05(b)(ii) shall be deleted in its entirety and
replaced with the sentence "This Section 2.05(b)(ii) is intentionally omitted."
(l) Section 2.05(b)(iii) shall be amended by (i) deleting
the name "FN Holdings" and replacing such name with the name "First Gibraltar"
and (ii) deleting the phrase "the certificate of incorporation of FN Holdings"
and replacing such phrase with the phrase "the First Gibraltar Charter
Document."
(m) Section 2.05(b)(v) shall be amended in its entirety to
read as follows:
"(v) The Borrower shall, on the date of each
dividend, distribution, loan or advance from the Bank to FN Holdings arising
solely out of the sum of (1) any gains (net of taxes) from the sale of deposits
(other than the sale of deposits in California) and property, plant and
equipment related to such deposits and (2) any net income that is attributable
to the recognition of the deferred tax asset net operating loss carry forwards
of the Bank (such sum shall be referred to in this Section 2.05(b)(v) as the
"Deposit/Tax Contribution Amount"), apply such Deposit/Tax Contribution Amount
to the making of a prepayment in such amount. Each such prepayment shall be
applied pro rata to (x) the Term B Facility and (y) the Revolving Credit
Facility as set forth in Section 2.05(b)(ix) below:
5
(n) Section 2.05(b)(vi) shall be amended in its entirety to
read as follows:
"(vi) The Borrower shall, on any date (A) on which a
deposit of amounts paid under or in connection with any Related Document is made
to the Mafco Collateral Account and (B) either (I) a Default has occurred and is
continuing, (II) the Borrower fails to deliver a Look-Forward Certificate or a
Deposit Certificate with respect to such deposit in accordance with the terms of
Section 5.01(l) or (III) the Required Lenders determine, in their reasonable
discretion, within 15 Business Days following the date of the receipt of the
Look-Forward Certificate or within two Business Days following the date of the
receipt of the Deposit Certificate, as the case may be, referred to in clause
(B)(II), that the equity contributions receivable by the Borrower from Borrower
Parent pursuant to the Equity Contribution Agreement (to the extent they relate
to net income of the Bank and any gains (net of taxes) from the sale of deposits
and property, plant and equipment related to such deposits will be insufficient
to make the principal payments in respect of the Facilities due on June 30,
1996, make a prepayment in an amount equal to the amount of the deposit in the
Mafco Collateral Account, plus any interest on Collateral Investments made with
such deposit. The portion of each such prepayment to be applied to principal in
accordance with Section 2.05(b)(x) below shall be applied pro rata to (x) the
Term B Facility and (y) the Revolving Credit Facility as set forth in Section
2.05(b)(ix) below."
(o) Section 2.05(b)(vii) shall be amended by inserting after
each reference therein to "the New FN Holdings Debt" the phrase "or the FN
Parent Debt."
(p) Section 3.02(b) shall be amended by deleting clauses (x)
and (y) therein and replacing such clauses with the following:
"the equity contributions receivable by the Borrower
from Borrower Parent pursuant to the Equity Contribution Agreement arising out
of net income of the Bank (including any gains (net of taxes) from the sale by
the Bank of deposits and property, plant and equipment related to such deposits)
will be insufficient to make the principal payments in respect of the Facilities
due on June 30, 1996."
(q) Section 5.01(l) shall be amended by deleting clauses (i)
and (ii) therein in their entirety and replacing such clauses with the
following:
"the projected equity contributions receivable by the
Borrower from Borrower Parent pursuant to the Equity Contribution Agreement
arising out of net income of the Bank (including any gains (net of taxes) from
6
the sale by the Bank of deposits and property, plant and equipment related to
such deposits), will be sufficient to make the principal payments due on June
30, 1996, together with a schedule in form reasonably satisfactory to the Agent
setting forth in reasonable detail the computations and other information on
which such certification is based;"
(r) Section 6.01(n) shall be amended in full to read as
follows:
"(n) Any provision of the FN Holdings Debt
Document, the New FN Holdings Debt Documents or the FN Parent Debt Documents
shall be terminated, amended, waived or otherwise modified without the consent
of the Required Lenders or any provision of the First Gibraltar Charter Document
shall be amended or modified without the consent of the Required Lenders; or"
(s) Section 6.01(t) shall be amended in full to read as
follows:
"(t) 100% of the excess of (i) all amounts
received by FN Holdings that relate solely to net income of the Bank (excluding,
to the extent included in net income, (1) any gains (net of taxes) from the sale
of deposits and property, plant and equipment related to such deposits, and (2)
any net income that is attributable to the recognitions of the deferred tax
asset net operating loss carry forwards of the Bank) over (ii) aggregate of the
amounts permitted to be retained by FN Holdings as set forth in clause (a) of
Article Ninth of the third restated certificate of incorporation of FN Holdings
as in effect on the date of the Third Amendment shall not be received by First
Gibraltar (through dividends, distributions or otherwise); or"
(t) Section 6.01(u) shall be amended in full to read as
follows:
"(u) 100% of all amounts received by FN
Holdings that relate to dividends, other distributions or any loans or advances
from the Bank arising out of excess capital of the Bank shall not be received by
First Gibraltar (through dividends, distributions or otherwise);"
(u) Schedule I to the Credit Agreement is amended in its
entirety to read as set forth in Annex A hereto.
(v) Exhibit G to the Credit Agreement is amended in its
entirety to read as set forth in Annex B hereto.
7
(w) Exhibit H to the Credit Agreement is amended in its
entirety to read as set forth in Annex C hereto.
(x) Annex D hereto is added to the Credit Agreement as
Exhibit I.
SECTION 2. Amendment to the Borrower Security Agreement. The
Borrower Security Agreement is, effective as of the date on which all of the
conditions precedent set forth in Section 7 hereof have been satisfied or
waived, hereby amended as follows:
(a) Section 7(b) shall be amended by (i) replacing
the reference therein to "FN Parent" with a reference to "First Gibraltar", (ii)
replacing the reference to "FN Parent Loan Agreement" with a reference therein
to "First Gibraltar Loan Agreement" and (iii) deleting the last sentence
thereof.
(b) Section 7(c) shall be amended in its entirety to
read "This Section 7(c) is intentionally omitted."
(c) Section 7(d) shall be amended by replacing each
reference therein to "FN Holdings" with a reference to "First Gibraltar".
(d) Section 7(f) shall be amended by deleting the
last sentence thereof.
(e) Section 7(g) shall be amended in its entirety to
read "This Section 7(g) is intentionally omitted."
SECTION 3. Amendments to the Borrower Parent Security
Agreement. The Borrower Parent Security Agreement is, effective as of the date
on which all of the conditions precedent set forth in Section 7 hereof have been
satisfied or waived, hereby amended by (i) deleting clause (b) of Section 1
thereof and replacing such clause with the following clause:
"(b) the First Gibraltar Loan Agreement, as such
agreement may be amended or otherwise modified from time to time (the "Assigned
Agreement"), including, without limitation, (i) all rights of Borrower Parent to
receive moneys due and to become due under or pursuant to the Assigned
Agreement, (ii) all rights of Borrower Parent to receive proceeds of any
indemnity, warranty or guaranty with respect to the Assigned Agreement, (iii)
claims of Borrower Parent for damages arising out of or for breach of or default
under the Assigned Agreement and (iv) the right of Borrower Parent to terminate
the Assigned Agreement, to perform thereunder and to compel
8
performance and otherwise exercise all remedies thereunder (all such Collateral
being the "Agreement Collateral");"
and (ii) amending Exhibit A thereto in its entirety to read as set forth in
Annex F hereto.
SECTION 4. Amendment to the Borrower Parent Guaranty. Section
8(i) of the Borrower Parent Guaranty is, effective as of the date on which all
of the conditions precedent set forth in Section 7 have been satisfied or
waived, hereby amended by adding to the end of clause (i) thereof the words "and
First Gibraltar".
SECTION 5. Amendment to the Mafco Guaranty. The Mafco Guaranty
is, effective as of the date on which all of the conditions precedent set forth
in Section 7 have been satisfied or waived, hereby amended as follows:
(a) Section 6(a) shall be amended by replacing the last
sentence thereof with the sentence "For purposes of this Guaranty, the term
"Relevant Party" shall mean the Guarantor, M&F, Andrews, Four Star, New Coleman,
FN Holdings, FN Parent and First Gibraltar (FN Holdings, FN Parent and First
Gibraltar shall collectively be referred to as the "Designated Relevant
Parties")."
(b) Section 6(b) shall be amended by inserting after the
first reference to "Relevant Party" therein the parenthetical "(other than First
Gibraltar)".
(c) Section 6(c) shall be amended by inserting after the
reference to "Original Credit Agreement" in clause (iv) thereof the phrase "and
the voting trust agreement referred to in Section 7(d)(vi) of the Third
Amendment".
(d) Section 6(r) shall be amended by inserting after the
reference to "Relevant Party" therein the parenthetical "(other than First
Gibraltar)".
(e) Section 7(n) shall be amended by inserting, after the
phrase "or FN Parent", the phrase "or First Gibraltar".
(f) Section 8(f)(ii) shall be amended by inserting,
immediately prior to clause (x) thereof, the clause "(w) Investments by First
Gibraltar in Borrower Parent pursuant to the terms of the First Gibraltar Loan
Agreement and the First Gibraltar Certificate of Incorporation,".
(g) Section 8(i) shall be amended in its entirety to read as
follows:
"(i) Debt. Create, incur, assume or suffer to exist,
or permit any other Relevant Party to create, incur, assume or suffer to exist
any Debt other
9
than (i) in the case of the Guarantor, loans pursuant to the terms of the
Related Documents, Debt under this Guaranty, the Debt set forth on Schedule V
hereto and Debt under the guaranty of all loans made by FN Holdings to Borrwer
Parent, provided that such guaranty shall be subordinated to the Debt under this
Guaranty on terms and conditions substantially identical to the terms and
conditions set forth on Exhibit A hereto subject to the provisions set forth
under the heading "Ranking" on Exhibit D hereto, (ii) in the case of the other
Relevant Parties, Debt set forth on Schedule V hereto and Debt under the Loan
Documents, (iii) in the case of all of the Relevant Parties, (x) intercompany
Debt and (y) endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course, (iv) in the case of FN Parent, the
issuance of the FN Parent Debt and any Debt issued by FN Parent in exchange for
the FN Parent Debt, provided that, in each case such Debt is substantially on
the terms and conditions set forth on Exhibit E hereto, and (v) in the case of
FN Holdings, the issuance of Debt pursuant to the FN Holdings Debt Document,
Debt under the FN Management Incentive Plan and the issuance of the New FN
Holdings Debt pursuant to the New FN Holdings Debt Documents."
(h) Section 8(j) shall be amended in full to read as
follows:
"(j) Charter Amendments. Amend, or permit any other
Relevant Party to amend, its certificate of incorporation or bylaws other than
(i) the amendment to the certificate of incorporation of FN Holdings in
substantially the form of Exhibit G to the Credit Agreement, (ii) the amendment
to the certificate of incorporation of FN Parent in substantially the form of
Exhibit H to the Credit Agreement and (iii) the amendment to the certificate of
incorporation of First Gibraltar in substantially the form of Exhibit I to the
Credit Agreement."
(i) Exhibit B to the Mafco Guaranty is amended in its
entirety to read "Exhibit B is intentionally omitted."
(j) Annex E hereto shall be added to the Mafco Guaranty as
Exhibit E thereto.
SECTION 6. Amendment to the Equity Contribution Agreement. The
Equity Contribution Agreement is, effective as of the date on which all of the
conditions precedent set forth in Section 7 have been satisfied or waived,
hereby amended by (i) deleting clauses (a) and (b) in Section 1 thereof and
replacing such clauses with the clause "(a) the proceeds from each loan made by
First Gibraltar to the Borrower
10
Parent pursuant to the First Gibraltar Loan Agreement" and (ii) redesignating
clause (c) in Section 1 thereof as clause (b).
SECTION 7. Conditions of Effectiveness. Sections 1, 2, 3, 4, 5
and 6 of this Third Amendment shall become effective on the first date (the
"Third Amendment Effective Date") upon which the Agent shall have received
evidence satisfactory to it that the following conditions precedent have been
satisfied:
(a) The Borrower shall have paid all accrued fees of the
Agent and the Lenders and all accrued expenses of the Agent (including the
reasonable fees and expenses of counsel to the Agent).
(b) The Term A Facility shall have been paid in full, the
Term B Commitments shall be $5,232,558.14 and the Revolving Credit Commitments
shall be $144,767,441.86.
(c) FN Parent shall have issued $450 million aggregate
principal amount of Senior Notes due 2003 substantially on the terms and
conditions set forth in the Preliminary Offering Memorandum of FN Parent, dated
March 22, 1996, under the heading "Description of the Notes" and shall have
received $434,082,717 in Net Cash Proceeds from the sale of such Senior Notes.
(d) The Agent shall have received on or before the Third
Amendment Effective Date the following, each dated on or before the Third
Amendment Effective Date, in form and substance satisfactory to the Agent
(unless otherwise specified) and in sufficient copies for each Lender:
(i) counterparts to this Third Amendment duly
executed by the Borrower, Borrower Parent, Mafco, the Lenders and the Agent;
(ii) counterparts to the Consent attached hereto duly
executed by each Loan Party other than the Borrower, Borrower Parent and Mafco;
(iii) Certified copies of the FN Parent Debt
Documents, duly executed by the parties thereto and in form and substance
reasonably satisfactory to the Lenders;
(iv) The First Gibraltar Loan Agreement, duly
executed by First Gibraltar and in form and substance reasonably satisfactory to
the Lenders;
11
(v) Certified copies of the certificate of
incorporation and by-laws of First Gibraltar, in form and substance reasonably
satisfactory to the Lenders;
(vi) A voting trust agreement, in form and substance
satisfactory to the Lenders, among First Gibraltar, Trans Network Insurance
Services Inc., Citibank, N.A. and Bank of New York relating to the common stock
of First Gibraltar, duly executed by the parties thereto and in form and
substance reasonably satisfactory to the Lenders;
(vii) Amendments to the financing statements filed in
connection with the Original Credit Agreement under the Uniform Commercial Code
of the State of New York naming Borrower Parent as debtor which shall conform
such financing statements to the description of the "Collateral" as described in
the Borrower Parent Security Agreement as amended by this Third Amendment; and
(viii) A certificate signed by a duly authorized
officer of Mafco stating that:
(A) After giving effect to this Third
Amendment, the representations and warranties contained in each of the Loan
Documents are correct on and as of the Third Amendment Effective Date, except to
the extent such representations and warranties specifically relate to an earlier
date; and
(B) After giving effect to this Third
Amendment, no event has occurred and is continuing which constitutes an Event of
Default or would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
SECTION 8. Consents of the Lenders. (a) Subject to the
satisfaction or waiver of the conditions precedent set forth in Section 7
hereof, the Lenders hereby consent to the termination of (i) the Voting Trust
Agreement dated as of September 30, 1994 among FN Parent, FN Holdings, Citibank
and NationsBank of Georgia, National Association, (ii) the Voting Trust
Agreement dated as of September 30, 1994 among First Gibraltar Holdings Inc., FN
Parent, Citibank and NationsBank of Georgia, National Association and (iii) the
FN Parent Loan Agreement.
(b) Subject to the execution of this Third Amendment by each
of the parties hereto, Required Lenders hereby consent to the amendment on or
prior to the date
12
hereof of the certificate of incorporation of each of FN Holdings and FN Parent,
in each case to delete the first sentence of paragraph (3) of Article FIFTH
thereof.
SECTION 9. Reference to and Effect on the Loan Documents. (a)
Upon the effectiveness of Sections 1, 2, 3, 4, 5 and 6 hereof: (i) each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to "the Credit Agreement", "thereunder", "thereof" or
words of like import referring to the Credit Agreement, shall mean and be a
reference to the Credit Agreement as amended hereby; (ii) each reference in the
Borrower Security Agreement to "this Agreement", "hereunder", "hereof" or words
of like import referring to the Borrower Security Agreement, and each reference
in the other Loan Documents to "the Borrower Security Agreement", "thereunder",
"thereof" or words of like import referring to the Borrower Security Agreement
shall mean and be a reference to the Borrower Security Agreement as amended
hereby; (iii) each reference in the Borrower Parent Security Agreement to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Borrower Parent Security Agreement, and each reference in the other Loan
Documents to "the Borrower Parent Security Agreement", "thereunder", "thereof"
or words of like import referring to the Borrower Parent Security Agreement,
shall mean and be a reference to the Borrower Parent Security Agreement as
amended hereby, (iv) ) each reference in the Borrower Parent Guaranty to "this
Agreement", "hereunder", "hereof" or words of like import referring to the
Borrower Parent Guaranty and each reference in the other Loan Documents to "the
Borrower Parent Guaranty", "thereunder", "thereof" or words of like import
referring to the Borrower Parent Guaranty, shall mean and be a reference to the
Borrower Parent Guaranty as amended hereby, (v) each reference in the Mafco
Guaranty to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Mafco Guaranty, and each reference in the other Loan Documents
to "the Mafco Guaranty", "thereunder", "thereof" or words of like import
referring to the Mafco Guaranty, shall mean and be a reference to the Mafco
Guaranty as amended hereby; and (vi) each reference in the Equity Contribution
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Equity Contribution Agreement, and each reference in the other
Loan Documents to "the Equity Contribution Agreement", "thereunder", "thereof"
or words of like import referring to the Equity Contribution Agreement, shall
mean and be a reference to the Equity Contribution Agreement as amended hereby.
(b) Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents are and shall continue to be
in full force and effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Third
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or
13
remedy of any Lender or the Agent under any of the Loan Documents, nor
constitute a waiver of any provision of any of the Loan Documents.
SECTION 10. Costs, Expenses and Taxes. The Borrower agrees to
pay on demand all costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Third Amendment and the other instruments and documents to be delivered
hereunder, including, without limitation, the reasonable fees and out-of-pocket
expenses of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities hereunder and
thereunder. The Borrower further agrees to pay on demand all costs and
expenses, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Third Amendment and the other
instruments and documents to be delivered hereunder, including, without
limitation, reasonable counsel fees and expenses in connection with the
enforcement of rights under this Section 10. In addition, the Borrower shall
pay any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of this Third Amendment and the other
instruments and documents to be delivered hereunder, and agrees to save the
Agent and each Lender harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes.
SECTION 11. Execution in Counterparts. This Third Amendment
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
SECTION 12. Governing Law. This Third Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
MARVEL IV HOLDINGS INC.
By _________________________
Name: Glenn P. Dickes
Title: Vice President
14
MAFCO HOLDINGS INC.
By __________________________
Name: Glenn P. Dickes
Title: Vice President
MARVEL V HOLDINGS INC.
By __________________________
Name: Glenn P. Dickes
Title: Vice President
CITIBANK, N.A., as Agent
By __________________________
Name:
Title:
15
Lenders
BANK OF AMERICA ILLINOIS
By __________________________
Name:
Title:
THE BANK OF NEW YORK
By __________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.
By __________________________
Name:
Title:
CHEMICAL BANK
By __________________________
Name:
Title:
CITIBANK, N.A.
By __________________________
Name:
Title:
16
CREDIT LYONNAIS,
CAYMAN ISLAND BRANCH
By __________________________
Name:
Title:
CREDIT SUISSE
By __________________________
Name:
Title:
By __________________________
Name:
Title:
THE FIRST NATIONAL BANK
OF BOSTON
By __________________________
Name:
Title:
17
THE FUJI BANK, LIMITED
By __________________________
Name:
Title:
THE LONG-TERM CREDIT
BANK OF JAPAN, LTD.,
LOS ANGELES AGENCY
By __________________________
Name:
Title:
NATIONSBANK, N.A. (CAROLINAS)
By __________________________
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By __________________________
Name:
Title:
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By __________________________
Name:
Title:
18
PILGRIM PRIME RATE TRUST
By __________________________
Name:
Title:
PRIME INCOME TRUST
By __________________________
Name:
Title:
CONSENT
Reference is made to (a) the Credit Agreement dated as of
December 15, 1995, as heretofore amended (said Agreement, as so amended, being
the "Credit Agreement"; the terms defined therein being used herein as therein
defined unless otherwise defined herein) among Marvel IV Holdings Inc., a
Delaware corporation (the "Borrower"), the lenders parties to the Credit
Agreement (the "Lenders"), and Citibank, N.A., as agent (the "Agent") for the
Lenders, and (b) the Third Amendment dated as of April 9, 1996 (the "Third
Amendment") among the Borrower, Mafco Holdings Inc., a Delaware corporation
("Mafco"), Marvel V Holdings Inc., a Delaware corporation ("Borrower Parent"),
the Lenders and the Agent.
Each of the undersigned, as a Loan Party under the Credit
Agreement, hereby consents to the Third Amendment and hereby confirms and agrees
that (i) each Collateral Document to which such Loan Party is a party and the
Collateral described in each such Collateral Document does, and shall continue
to, secure the payment of all of the Secured Obligations and Guaranteed
Obligations, as the case may be, described in such Collateral Document and (ii)
each Loan Document to which such Loan Party is a party is, and shall continue to
be, in full force and effect and is hereby ratified and confirmed in all
respects except that, on and after the effective date of the Third Amendment,
(A) each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended by the Third Amendment;
(B) each reference in the Borrower Security Agreement to "this Agreement",
"hereunder", "hereof" or words of like import referring to the Borrower Security
Agreement, and each reference in the other Loan Documents to "the Borrower
Security Agreement", "thereunder", "thereof" or words of like import referring
to the Borrower Security Agreement shall mean and be a reference to the Borrower
Security Agreement as amended by the Third Amendment; (C) each reference in the
Borrower Parent Security Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Borrower Parent Security Agreement, and
each reference in the other Loan Documents to "the Borrower Parent Security
Agreement", "thereunder", "thereof" or words of like import referring to the
Borrower Parent Security Agreement, shall mean and be a reference to the
Borrower Parent Security Agreement as amended by the Third Amendment, (D) each
reference in the Borrower Parent Guaranty to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Borrower Parent Guaranty and
each reference in the other Loan Documents to "the Borrower Parent Guaranty",
"thereunder", "thereof" or words of like import referring to the Borrower Parent
Guaranty, shall mean and be a reference to the Borrower Parent Guaranty as
amended by the Third Amendment, (E) each reference in the Mafco Guaranty to
"this Agreement", "hereunder", "hereof" or words of like import referring to the
Mafco Guaranty, and each reference in the other Loan Documents to "the Mafco
Guaranty", "thereunder", "thereof" or words of like import referring to the
Mafco Guaranty, shall mean and be a reference to the Mafco Guaranty as amended
by the Third Amendment; and (F) each reference in the Equity Contribution
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Equity
2
Contribution Agreement, and each reference in the other Loan Documents to "the
Equity Contribution Agreement", "thereunder", "thereof" or words of like import
referring to the Equity Contribution Agreement, shall mean and be a reference to
the Equity Contribution Agreement as amended by the Third Amendment.
This Consent may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same consent.
ANDREWS GROUP INCORPORATED
CONSOLIDATED CIGAR II HOLDINGS INC.
COLEMAN (PARENT) HOLDINGS INC.
FLAVORS (PARENT) HOLDINGS INC.
FOUR STAR HOLDINGS CORP.
MACANDREWS & FORBES HOLDINGS INC.
MAFCO HOLDINGS INC.
NEW COLEMAN HOLDINGS, INC.
NWCG (PARENT) HOLDINGS CORPORATION
By________________________________
Glenn P. Dickes
An authorized signatory for each
of the above-named corporations
Annex A
to
THIRD AMENDMENT
SCHEDULE I
ADVANCES, COMMITMENTS AND APPLICABLE LENDING OFFICES
<TABLE>
<CAPTION>
Revolving
Name of Bank Term A Commitment Term B Commitment Credit Commitment Applicable Lending Office
- ------------ ----------------- ----------------- ---------------- -------------------------
<S> <C> <C> <C> <C>
Citibank, N.A. -0- -0- $15,000,000.01 Domestic:
--------
399 Park Avenue
New York, New York 10043
Attention: Ed Vowinkel
Tel: No. 718-248-4523
Fax No.: 718-248-4844
ABA No.: 021000089
Via Fed Transfer
Account No.: 3685-2248
Account Name: Medium Term Fin.
Attention: Ed Vowinkel
Reference: Marvel IV Holdings
Eurodollar:
Same
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Revolving
Name of Bank Term A Commitment Term B Commitment Credit Commitment Applicable Lending Office
- ------------ ----------------- ----------------- ---------------- -------------------------
<S> <C> <C> <C> <C>
Bank of America Illinois -0- -0- $11,511,627.91 Domestic:
--------
231 South LaSalle
Chicago, IL 60697
Attention: Lily Reyes
Tel. No.: 312-828-3873
Fax No.: 312-974-9626
ABA No.: 071-000-039
Via Fed Transfer
Account No.: 47-03421
Attention: Account
Administration-L.Reyes
Reference: Marvel IV Holdings
Eurdollar:
Same
The Chase Manhattan Bank, N.A. -0- -0- $5,232,558.14 Domestic:
--------
2 Chase Manhattan Plaza
New York, N.Y. 10081
Attention: Rocky Chan
Tel. No.: 212-552-2920
Fax No.: 212-552-7325
ABA No.: 021-0000-21
Via Fed Transfer
Account No.: 900-9-0000-36
Account Name: Commercial Loan
Dept.
Attention: Rocky Chan
Reference: Mafco Holding
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Revolving
Name of Bank Term A Commitment Term B Commitment Credit Commitment Applicable Lending Office
- ------------ ----------------- ----------------- ---------------- -------------------------
<S> <C> <C> <C> <C>
Chemical Bank -0- -0- $12,906,976.74 Domestic:
--------
270 Park Avenue
New York, New York 10017
Attention: Abigail L. Garcia
Tel. No.: 212-270-5425
Fax No.: 212-818-1456
ABA No.: 021-0001-28
Via Fed Transfer
Account No.:_____________
Account Name: Credit Commercial
Loan Operations
Attention: John Gallagher
Reference: Mafco Holdings Inc.
Eurodollar:
Same
Credit Lyonnais -0- -0- $11,511,627.91 Domestic:
--------
1301 Avenue of the Americas
New York, NY 10019
Attention: Lucie Mercado
Tel. No.: 212-261-7271
Fax No.: 212-261-3401
ABA No.: 026008073
Via Fed Transfer
Account No.: 01-008820-001-00
Account Name: Loan Servicing
Attention: Lucy Mercado
Reference: Mafco
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Revolving
Name of Bank Term A Commitment Term B Commitment Credit Commitment Applicable Lending Office
- ------------ ----------------- ----------------- ---------------- -------------------------
<S> <C> <C> <C> <C>
Credit Suisse -0- -0- $12,906,976.74 Domestic:
--------
12 East 49th Street
New York, NY 10017
Attention: Ed Siddons
Tel. No.: 212-238-5407
Fax No.: 212-238-5439
ABA No.: 026009179
Via Fed Transfer
Account No.: 904996-02
Account Name: Loan Dept.
Attention: Ed Siddons
Reference: Marvel IV Holdings
Eurodollar:
Same
The First National Bank of -0- -0- $5,232,558.14 Domestic:
Boston --------
100 Rustcraft Road
Dedham, MA 02026
Attention: Angela Moore
Tel. No.: 617-467-2292
Fax No.: 617-467-2276
ABA No.: 01000390
Account No.: 0411214
Via Fed Transfer
Attention: Angela Moore
Reference: Marvel IV Holdings
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Revolving
Name of Bank Term A Commitment Term B Commitment Credit Commitment Applicable Lending Office
- ------------ ----------------- ----------------- ---------------- -------------------------
<S> <C> <C> <C> <C>
The Fuji Bank, Limited -0- -0- $8,720,930.23 Domestic:
--------
2 World Trade Center
New York, NY 10048
Attention: Gemma Dizon
Tel. No.: 212-898-2069
Fax No.: 212-488-8216
ABA No.: 026009700
Via Fed Transfer
Account No.: 515011U3
Account Name: USCF III
Attention: Gemma Dizon
Reference: Mafco Holdings
Eurodollar:
Same
The Long-Term Credit Bank of -0- -0- $6,976,744.19 Domestic:
Japan, Ltd. --------
444 South Flower Street
Los Angeles, CA 90071
Attention: Ken Nakagawa
Tel. No.: 213-689-6244
Fax No.: 213-626-1067
ABA No.: 122000218
Via Fed Transfer
Account No.: 220234834
Account Name: Long-Term Credit
Bank of Japan
Attention: Ken Nakagawa
Reference: Mafco Holdings Inc.
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Revolving
Name of Bank Term A Commitment Term B Commitment Credit Commitment Applicable Lending Office
- ------------ ----------------- ----------------- ---------------- -------------------------
<S> <C> <C> <C> <C>
NationsBank, National -0- -0- $12,906,976.74 Domestic:
Association (Carolinas) --------
101 No. Tryon Street
Charlotte, NC 28255
Attention: Charlie Franklin
Tel. No.: 704-386-4199
Fax No.: 704-386-8694
ABA No.: 053000196
Via Fed Transfer
Account No.: 13662122506
Account Name: Corporate Credit
Services Support
Attention: Charlie Franklin
Reference: Marvel IV Holdings
Eurodollar:
Same
Internationale Nederlanden -0- -0- $8,720,930.23 Domestic:
(U.S.) Capital Corporation --------
135 East 57th Street
New York, NY 10022
Attention: Kunduck Moon
Tel. No.: (212) 446-0911
Fax No.: (212) 593-3362
ABA No.: 021000238
Via Fed Transfer
Account No.: 60007116
Account Name: Internationale
Nederlanden (U.S.) Capital
Corporation
Reference: Marvel IV Holdings
Eurodollar:
Same
Van Kampen American Capital -0- -0- $12,906,976.74 Domestic:
Prime Rate Income Trust --------
One Parkview Plaza
Oakbrook Terrace, IL 60181
Attention: Jeffrey Mailet
Tel. No.: (708) 684-6438
Fax No.: (708) 684-6740
ABA No.: 011000028
Via Fed Transfer
Account No.: 99001265
Account Name: VKM PRIT
Reference: Marvel IV Holdings
Eurodollar:
Same
</TABLE>
<TABLE>
<CAPTION>
Revolving
Name of Bank Term A Commitment Term B Commitment Credit Commitment Applicable Lending Office
- ------------ ----------------- ----------------- ---------------- -------------------------
<S> <C> <C> <C> <C>
Pilgrim Prime Rate Trust -0- -0- $11,511,627.91 Domestic:
--------
40 N. Central Ave.
Suite 1200
Phoenix, AZ 85004
Attention:
Tel. No.: (602)417-8259
Fax. No.: (602) 417-8327
ABA No.: 011000028
Via Fed Transfer
Account No.: 37926342
Account Name: PL1F - Pilgrim
Prime Rate Trust
Reference: Mafco Holdings
Eurodollar:
Same
Prime Income Trust -0- $5,232,558.14 -0- Domestic:
--------
2 World Trade Center
72nd Floor
New York, New York 10048
Attention: April Chrysostomas
Tel. No.: (212) 392-5709
Fax No.: (212) 392-5345
ABA No.: 0210000018
Via Fed Transfer
Account No.: 003348
Account Name: Prime Income
Trust
Reference: Marvel IV Holdings
Eurodollar:
Same
</TABLE>
DRAFT 4/04/96
ANNEX B
to
THIRD AMENDMENT
FORM OF
FOURTH RESTATED
CERTIFICATE OF INCORPORATION
OF
FIRST NATIONWIDE HOLDINGS INC.
----------------------------------
Pursuant to Sections 242 and 245
of the General Corporation Law
of the State of Delaware
First Nationwide Holdings Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is First Nationwide Holdings
Inc. The date of filing of the original Certificate of Incorporation of the
Corporation with the Secretary of State of the State of Delaware was June 30,
1994. The original Certificate of Incorporation of the Corporation was amended
and restated pursuant to the Restated Certificate of Incorporation of the
Corporation (the "Restated Certificate of Incorporation") which was filed with
the Secretary of State of the State of Delaware on September 30, 1994. The
Restated Certificate of Incorporation was amended and restated pursuant to the
Second Restated Certificate of Incorporation of the Corporation (the "Second
Restated Certificate of Incorporation") which was filed with the Secretary of
State of the State of Delaware on June 29, 1995 (the "Filing Date"). The Second
Amended and Restated Certificate of Incorporation was amended and restated
pursuant to the Third Restated Certificate of Incorporation of the Corporation
which was filed with the Secretary of State of the State of Delaware on January
31, 1996. The Third Restated Certificate of Incorporation was amended pursuant
to a Certificate of Amendment to the Third Restated Certificate of
Incorporation filed with the Secretary of the State of Delaware on April __,
1996 (as so amended, the "Third Restated Certificate of Incorporation").
2. This Fourth Restated Certificate of
Incorporation, which both restates and amends the provisions
Doc#:DS3:204624.1 WP-G2
<PAGE>
1
of the Third Restated Certificate of Incorporation, was duly adopted in
accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware (the "GCL") and by the written consent
of its stockholders entitled to vote thereon in accordance with Section 228 of
the GCL and is as follows:
FIRST: The name of the Corporation is First
Nationwide Holdings Inc. (hereinafter the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1013 Centre Road, Wilmington, DE 19805,
in the City of Wilmington, County of New Castle. The name of its registered
agent at that address is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to
engage in any lawful act or activity for which a corporation
may be organized under the GCL.
FOURTH: The total number of shares of stock which the
Corporation shall have the authority to issue is 1250 shares consisting of 800
shares of Class A Common Stock, each having a par value of one dollar ($1.00),
200 shares of Class B Common Stock, each having a par value of one dollar
($1.00), and 250 shares of Class C Common Stock, each having a par value of one
dollar ($1.00).
(1) Dividends.
(a) Dividend Rights. Dividends may be paid
in cash or otherwise upon the Class A Common Stock, Class B Common Stock and
the Class C Common Stock out of the assets of the Corporation in the
relationship and upon the terms provided for below with respect to each such
class:
(i) Class A Common Stock. The holders
of record of the Class A Common Stock shall be entitled to receive
dividends (such dividends shall hereinafter be referred to as "Class A
Dividends"), when and as declared by the Board of Directors of the
Corporation (the "Board of Directors") out of funds legally available
therefor, subject to the rights of the Class B Common Stock described
in Section (1)(a)(ii) of this Article FOURTH and the rights of the
Class C Common Stock described in Section 1(a)(iii) of this Article
FOURTH.
(ii) Class B Common Stock. The holders
of record of the Class B Common Stock shall be entitled to receive
dividends (such dividends shall hereinafter be referred to as "Class B
Dividends"), at the time of the declaration and payment, respectively,
of Class A Dividends, out of funds legally available therefor, in the
amounts per share paid on the Class A Common Stock.
Doc#:DS3:204624.1 WP-G2
<PAGE>
2
(iii) Class C Common Stock. The
holders of record of shares of the Class C Common Stock shall be
entitled to receive, when and as declared by the Board of Directors
out of funds legally available therefor, dividends at the rate per
share determined as follows. The amount of dividends payable in
respect of the Class C Common Stock shall be computed assuming (x) a
stated value per share of $1,000,000 and (y) (I) during the period
(the "Pre-Filing Period") from March 1, 1996 until (but excluding) the
date (the "Filing Date") on which this Fourth Restated Certificate of
Incorporation is filed with the Secretary of State of the State of
Delaware, a dividend rate equal to ____ percent (___%) per annum (the
"Pre-Filing Interest Rate") [NOTE: rate will be equal to the weighted
average interest cost of funds under the Marvel IV Credit Agreement
during the Pre-Filing Period] and (II) from and after the Filing Date,
a dividend rate equal to ____ percent (___ %) per annum (the "New
Interest Rate") [NOTE: rate will be equal to the interest rate on the
new FN Parent notes], in each case computed on the basis of the actual
number of days elapsed in a 360-day year. Dividends on the Class C
Common Stock shall be cumulative from the date on which such shares of
Class C Common Stock were originally issued. Interest shall accrue on
any dividends on the Class C Common Stock that are not paid on any
dividend payment date (as determined in the sole discretion of the
Board of Directors) from such date until (but excluding) the date such
dividends are actually paid. During the PreFiling Period, such
interest, if any, accrued at a rate equal to the Pre-Filing Interest
Rate and from and after the Filing Date, such interest shall accrue at
a rate equal to the New Interest Rate, in each case computed on the
basis of the actual number of days elapsed in a 360-day year.
(b) Priority as to Dividends. Unless all
outstanding shares of Class C Common Stock have been redeemed, no dividends
(other than in Class A Common Stock or Class B Common Stock or in another stock
ranking junior to the Class C Common Stock as to dividends and liquidation
rights) shall be declared or paid or set aside for payment or other
distribution made upon the Class A Common Stock or Class B Common Stock of the
Corporation or on any other stock of the Corporation ranking junior to or on a
parity with the Class C Common Stock as to dividends or liquidation rights. No
Class A Dividends may be declared unless an equivalent per share Class B
Dividend shall be contem poraneously declared in accordance with Sections
(1)(a)(i) and (1)(a)(ii) above.
(c) Restrictions on Purchase. The Corpo
ration shall not purchase or otherwise acquire for value
Doc#:DS3:204624.1 WP-G2
<PAGE>
3
shares of Class A Common Stock or Class B Common Stock or any other class of
stock or series thereof ranking junior to or on a parity with the Class C
Common Stock as to dividends or liquidation rights if, at the time of making
such purchase or other acquisition, any shares of Class C Common Stock remain
outstanding.
(2) Redemption.
(a) Optional Redemption of Class C Common
Stock. The shares of Class C Common Stock may be redeemed, in whole or in part,
at the election of the Corporation by resolution of its Board of Directors, at
any time or from time to time after the date on which the shares of Class C
Common Stock are issued at the redemption price of $1,000,000 per share payable
out of funds legally available therefor, plus accrued and unpaid dividends to
the date fixed for redemption, plus interest accrued (I) during the Pre-Filing
Period, at a rate equal to the Pre-Filing Interest Rate and (II) from and after
the Filing Date, at a rate equal to the New Interest Rate, in each case
computed on the basis of the actual number of days elapsed in a 360- day year,
on dividends not paid on any dividend payment date (as determined in the sole
discretion of the Board of Directors), on such notice to each holder of record
of the Class C Common Stock to be redeemed as may be specified by the
resolution of the Board of Directors authorizing the redemption.
In the event that at any time less than all of the Class C
Common Stock outstanding is to be redeemed, the shares to be redeemed will be
selected pro rata or by lot.
(b) Retirement of Redeemed Shares. Shares
of Class C Common Stock redeemed, purchased or otherwise acquired for value by
the Corporation shall be retired and shall not be reissued.
(c) No Redemption. The shares of Class A
Common Stock and Class B Common Stock shall not be subject to redemption.
(3) Voting Rights. (i) The Class A Common Stock and the Class
B Common Stock shall vote together as a single class on all matters which are
to be put to a vote of shareholders. Each share of the Class A Common Stock
shall entitle the holder thereof to one vote. Each share of the Class B Common
Stock shall entitle the holder thereof to a vote equal to the product of one
and a fraction, the numerator of which is 3 and the denominator of which is 4.
Except as otherwise required by law, the holders of shares of Class C Common
Stock shall not be entitled to vote.
(ii) Notwithstanding Section 3(i) above, without the
affirmative vote or consent of the holders of 50% of the voting power of
Doc#:DS3:204624.1 WP-G2
<PAGE>
4
the outstanding Class B Common Stock, voting or consenting, as the case may be,
separately as one class, the Corporation may not consolidate or merge with or
into, or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, any person or entity unless each share of
Class B Common Stock shall be converted into or exchanged for and shall become
a share of such successor, transferee or resulting corporation or a parent
corporation of such corporation, having in respect of such successor,
transferee or resulting corporation or parent corporation substantially the
same powers, preferences and special rights, and the qualifications,
limitations or restrictions thereon, that the Class B Common Stock had
immediately prior to such transaction. Notwithstanding the foregoing, the
Corporation may consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets
to, any person or entity if such merger, consolidation or sale has been
approved by the affirmative vote or consent of the holders of 50% of the voting
power of the outstanding Class B Common Stock, voting or consenting, as the
case may be, separately as one class.
(4) Liquidation Rights; Priority.
(a) In the event of any liquidation,
dissolution or winding up of the affairs of the Corporation, whether voluntary
or involuntary, after payment or provision for payment of the debts and other
liabilities of the Corporation, the holders of shares of the Class C Common
Stock shall be entitled to receive, out of the assets of the Corporation,
whether such assets are capital or surplus and whether or not dividends as such
are declared, $1,000,000 per share plus an amount equal to all accrued and
unpaid dividends thereon to the date fixed for distribution, plus interest
accrued (I) during the Pre-Filing Period, at a rate equal to the Pre-Filing
Interest Rate and (II) from and after the Filing Date, at a rate equal to the
New Interest Rate, in each case computed on the basis of the actual number of
days elapsed in a 360-day year, on dividends not paid on any dividend payment
date (as determined in the sole discretion of the Board of Directors), and no
more, before any distribution shall be made to the holders of shares of the
Class A Common Stock or the holders of shares of the Class B Common Stock.
After such distributions, the holders of the shares of the Class A Common Stock
and the Class B Common Stock shall be entitled to receive the assets of the
Corporation remaining for distribution pro rata.
(b) Neither the merger nor consolidation of
the Corporation into or with any other corporation or entity, nor the merger or
consolidation of any other corporation or entity, into or with the Corporation,
nor a sale, transfer or lease of all or any part of the assets of the
Corporation, shall be deemed to be a liquidation, dissolution or winding up of
the Corporation within the meaning hereof.
Doc#:DS3:204624.1 WP-G2
<PAGE>
5
(c) Written notice of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, stating a payment date and the place where the distributable
amounts shall be payable, shall be given by mail, postage prepaid, not less
than 30 days prior to the payment date stated therein, to the holders of record
of the Class C Common Stock at their re spective addresses as the same shall
appear on the books of the Corporation.
FIFTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the Corporation,
and for further definition, limitation and regulation of the powers of the
Corporation and of its directors and stockholders:
(1) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the
By-Laws of the Corporation.
(3) Election of directors need not be by
written ballot unless the By-Laws so provide.
(4) No director shall be personally liable to the Corporation
or any of its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach
of the director's duty of loyalty to the Corpo ration or its
stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
pursuant to Section 174 of the GCL or (iv) for any transaction from
which the director derived an improper personal benefit. Any repeal or
modification of this Article FIFTH by the stockholders of the
Corporation shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to such
repeal or modification.
(5) In addition to the powers and authority hereinbefore or
by statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corpo ration, subject,
nevertheless, to the provisions of the GCL, this Fourth Restated
Certificate of Incorporation, and any By-Laws adopted by the
stockholders; provided, however, that no By-Laws
Doc#:DS3:204624.1 WP-G2
<PAGE>
6
hereafter adopted by the stockholders shall invalidate any prior act
of the directors which would have been valid if such By-Laws had not
been adopted.
SIXTH: Meetings of stockholders may be held within or without
the State of Delaware, as the By-Laws may provide. The books of the Corporation
may be kept (subject to any provision contained in the GCL) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the By-Laws of the Corporation.
SEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Fourth Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation; provided, however, that the Corporation shall not amend, alter,
change or repeal any provision of Article FOURTH hereof without the affirmative
vote or consent of the holders of 50% of the voting power of the outstanding
Class B Common Stock of the Corporation; and provided, further, that the
Corporation shall not adopt, amend or change any Article so as to be
inconsistent with Article FOURTH without complying with the foregoing
provision.
EIGHTH: The Corporation is to have perpetual
existence.
IN WITNESS WHEREOF, this Fourth Restated Certificate of
Incorporation has been executed by and on behalf of First Nationwide Holdings
Inc. by its Vice President this ____ day of April, 1996.
FIRST NATIONWIDE HOLDINGS INC.
By:___________________________
Name: Glenn P. Dickes
Title: Vice President
Doc#:DS3:204624.1 WP-G2
<PAGE>
Draft: 4/02/96
ANNEX C
to
THIRD AMENDMENT
FORM OF
THIRD RESTATED CERTIFICATE OF INCORPORATION
OF
FIRST NATIONWIDE (PARENT) HOLDINGS INC.
Pursuant to Sections 242 and 245
of the General Corporation Law
of the State of Delaware
First Nationwide (Parent) Holdings Inc., a corporation organized
and existing under the laws of the State of Delaware (the "Corporation"), hereby
certifies as follows:
1. The name of the Corporation is First Nationwide (Parent)
Holdings Inc. The date of filing of the Corporation's original Certificate of
Incorporation with the Secretary of State of the State of Delaware was July 22,
1994. The original Certificate of Incorporation was amended and restated
pursuant to the Restated Certificate of Incorporation of the Corporation (the
"Restated Certificate of Incorporation") which was filed with the Secretary of
State of the State of Delaware on September 30, 1994. The Restated Certificate
of Incorporation was amended and restated pursuant to the Second Restated
Certificate of the Corporation (the "Second Restated Certificate of
Incorporation") which was filed with the Secretary of State of the State of
Delaware on March 13, 1996.
2. This Third Restated Certificate of Incorporation, which
both restates and amends the provisions of the Corporation's Second Restated
Certificate of Incorporation, was duly adopted in accordance with the provisions
of Sections 242 and 245 of the General Corporation Law of the State of Delaware
(the "GCL") and by the written consent of its stockholders entitled to vote
thereon in accordance with Section228 of the GCL and is as follows:
FIRST: The name of the Corporation is First Nationwide (Parent)
Holdings Inc. (hereinafter the "Corporation").
<PAGE>
SECOND: The address of the registered office of the Corporation
in the State of Delaware is 1013 Centre Road, Wilmington, Delaware 19805, in the
City of Wilmington, County of New Castle. The name of its registered agent at
that address is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the GCL.
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 1000 shares of Common Stock, each
having a par value of one dollar ($1.00).
FIFTH: The following provisions are inserted for the management
of the business and the conduct of the affairs of the Corporation, and for
further definition, limitation and regulation of the powers of the Corporation
and of its directors and stockholders:
(1) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the
By-laws of the Corporation.
(3) Election of directors need not be by written ballot
unless the By-laws so provide.
(4) No director shall be personally liable to the
Corporation or any of its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i) for
any breach of the director's duty of loyalty to the Corporation or
its stockholders, (ii) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law,
(iii) pursuant to Section 174 of the GCL or (iv) for any transaction
from which the director derived an improper personal benefit. Any
repeal or modification of this Article FIFTH by the stockholders of
the Corporation shall not adversely affect any right or protection of
a director of the Corporation existing at the time of such repeal or
modification with respect to acts or omissions occurring prior to
such repeal or modification.
(5) In addition to the powers and authority hereinbefore or
by statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject,
nevertheless, to the provisions of the GCL, this Third Restated
Certificate of Incorporation, and any By-laws adopted by the
stockholders; provided,
<PAGE>
however, that no By-laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid
if such By-laws had not been adopted.
SIXTH: Meetings of stockholders may be held within or
without the State of Delaware, as the By-laws may provide. The books of the
Corporation may be kept (subject to any provision contained in the GCL) outside
the State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the By-laws of the Corporation.
SEVENTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Third Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
EIGHTH: The Corporation is to have perpetual existence.
IN WITNESS WHEREOF, this Third Restated Certificate of
Incorporation has been executed by and on behalf of First Nationwide (Parent)
Holdings Inc. by its Vice President this __ day of April, 1996.
FIRST NATIONWIDE (PARENT)
HOLDINGS INC.
By:
-------------------------------
Name: Glenn P. Dickes
Title: Vice President
ANNEX D
to
THIRD AMENDMENT
FORM OF
RESTATED CERTIFICATE OF INCORPORATION
OF
FIRST GIBRALTAR HOLDINGS INC.
-----------------------------------
Pursuant to Sections 242 and 245
of the General Corporation Law
of the State of Delaware
----------------------------------
First Gibraltar Holdings Inc., a corporation organized and existing under
the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
1. The name of the Corporation is First Gibraltar Holdings Inc. The date of
filing of the Corporation's original Certificate of Incorporation with the
Secretary of State of the State of Delaware was December 16, 1988. The original
Certificate of Incorporation was amended pursuant to Certificates of Amendment
to the Certificate of Incorporation filed with the Secretary of State of the
State of Delaware on October 18, 1989, September 30, 1992, December 30, 1992 and
April 3, 1996.
2. This Restated Certificate of Incorporation, which both restates and
amends the provisions of the Corporation's Certificate of Incorporation, was
duly adopted in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware (the "GCL") and by the written
consent of its stockholders entitled to vote thereon in accordance with Section
228 of the GCL and is as follows:
FIRST: The name of the Corporation is First Gibraltar Holdings Inc.
(hereinafter the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, Wilmington, Delaware 19805, in the City
of Wilmington, County of New Castle. The name of its registered agent at that
address is The Prentice-Hall Corporation System, Inc.
THIRD: (a) Subject to paragraph (b) below, the purpose of the Corporation
is to engage in any lawful act or activity for which a corporation may be
organized under the GCL.
<PAGE>
(b) Notwithstanding paragraph (a) above, the purpose of the Corporation is
limited to the following purposes, and activities incident to and necessary or
convenient to accomplish the following purposes: (i) to own 100% of the
outstanding Common Stock, par value $1.00 per share, of First Nationwide
(Parent) Holdings Inc. ("First Nationwide Parent"), (ii) to take any action in
connection with the Second Amended and Restated Credit Agreement, dated as of
December 15, 1995, among Marvel IV Holdings Inc. (the Borrower ), the banks,
financial and other institutional lenders named therein (the Lenders ) and
Citibank, N.A., as agent for the Lenders, as amended by the First Amendment
thereto dated as of January 9, 1996 and by the Second Amendment thereto dated as
of January 24, 1996, and as it may be further amended from time to time in
accordance with the terms thereof (as so amended, the "Second Amended and
Restated Credit Agreement") and to engage in any activity not prohibited by the
Second Amended and Restated Credit Agreement (or the Loan Documents referred to
therein) or (iii) to engage in any lawful activity and to exercise any powers
related to and convenient or incidental to the foregoing.
FOURTH: The total number of shares of stock which the Corporation shall
have the authority to issue is 1,000 shares of Common Stock, each having a par
value of one dollar ($1.00).
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
(1) The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the
By-Laws of the Corporation.
(3) Election of directors need not be by written ballot unless
the By-Laws so provide.
(4) No director shall be personally liable to the Corporation or
any of its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) pursuant
to Section 174 of the GCL or (iv) for any transaction from which the
director
<PAGE>
derived an improper personal benefit. Any repeal or modification of
this Article FIFTH by the stockholders of the Corporation shall not
adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification with
respect to acts or omissions occurring prior to such repeal or
modification.
(5) In addition to the powers and authority hereinbefore or by
statute expressly conferred upon them, the directors are hereby
empowered to exercise all such powers and do all such acts and things
as may be exercised or done by the Corporation, subject, nevertheless,
to the provisions of the GCL, this Restated Certificate of
Incorporation, and any By-Laws adopted by the stockholders; provided,
however, that no By-Laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid
if such By-Laws had not been adopted.
SIXTH: Meetings of stockholders may be held within or without the State of
Delaware, as the By-Laws may provide. The books of the Corporation may be kept
(subject to any provision contained in the GCL) outside the State of Delaware at
such place or places as may be designated from time to time by the Board of
Directors or in the By-Laws of the Corporation.
SEVENTH: Notwithstanding any other provision of this Restated Certificate
of Incorporation and any provision of law, the Corporation shall not do any of
the following:
(a) engage in any business or activity other than as set forth in
Article THIRD hereof;
(b) without the unanimous vote of the holders of 100% of the
voting power of the outstanding Common Stock of the Corporation
("Unanimous Stockholder Approval"), dissolve or liquidate, in whole or
in part, institute proceedings to be adjudicated bankrupt or
insolvent; or consent to the institution of bankruptcy or insolvency
proceedings against it; or file a petition seeking, or consent to,
liquidation, reorganization or other relief under any applicable
federal or state law relating to bankruptcy or insolvency; or consent
to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Corporation or a
substantial part of its property; or make any assignment for the
benefit of creditors; or admit in writing its inability to pay its
debts generally as they become due; or
<PAGE>
take any corporate action in furtherance of any such action; or
(c) without Unanimous Stockholder Approval, merge or consolidate
with any other corporation, company or entity or sell, lease or
otherwise transfer all or substantially all its assets to, or acquire
all or substantially all the assets or capital stock or other
ownership interest of, any other corporation, company or entity;
provided, however, that any such merger or consolidation (if the
Corporation is not the survivor) and such sale, lease or transfer may
only be consummated if such other corporation, company or entity
expressly assumes the Corporation's obligations and has a certificate
of incorporation or similar charter document containing provisions
identical to those in Articles THIRD, SEVENTH, EIGHTH, NINTH and TENTH
(collectively, the "Restricted Articles").
EIGHTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation, in
the manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation; provided, however,
that the Corporation shall not amend, alter, change or repeal any provision of
the Restricted Articles without Unanimous Stockholder Approval; and provided,
further, that the Corporation shall not adopt, amend or change any Article so as
to be inconsistent with any provision of the Restricted Articles without
complying with this Article EIGHTH.
NINTH: Until the Payment Obligations have been Fully Satisfied (as each
such term is defined below), or such earlier time as the Required Lenders under
(and as defined in) the Second Amended and Restated Credit Agreement may
approve, on each date on which the Corporation receives dividends, distributions
or other funds from First Nationwide Parent, the Corporation shall lend an
amount equal to the aggregate amount so received to Marvel V Holdings Inc. on a
subordinated basis. Such loans shall be evidenced by documentation containing
the terms of subordination set forth in Exhibit A hereto or such other terms of
subordination as may be approved by the Board of Directors of the Corporation
and by the Required Lenders under the Second Amended and Restated Credit
Agreement. "Payment Obligations" shall mean all principal, interest, fees,
charges, expenses, attorneys' fees and disbursements, indemnities and any other
amounts payable by the Loan Parties under the Loan Documents (as each such term
is defined in the Second Amended and Restated Credit Agreement). "Fully
Satisfied" shall mean, with respect to the Payment Obligations as of any date,
that, on or before such date, (a) the principal of and interest accrued to such
<PAGE>
date on all outstanding Advances (as defined in the Second Amended and Restated
Credit Agreement) shall have been paid in full in cash and (b) all fees,
expenses and other amounts then due and payable which constitute Payment
Obligations shall have been paid in full in cash; provided, however, that on
such date none of the Agent and the Lenders shall have made any claim in respect
of Payment Obligations against the Borrower or any other Loan Party under any
provision of any of the Loan Documents that has not been cash collateralized by
an amount sufficient in the reasonable judgment of the Agent, the Required
Lenders and any such Lender (if such Lender is not one of the Lenders
constituting the Required Lenders) to secure such claim.
TENTH: The Corporation shall ensure at all times that it maintains
corporate records and books of account which are separate from those of any
other corporation, company or entity, including its affiliates.
ELEVENTH: The Corporation is to have perpetual existence.
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
executed by and on behalf of First Gibraltar Holdings Inc. by its Vice President
and Assistant Secretary this __ day of April, 1996.
FIRST GIBRALTAR HOLDINGS INC.
By:__________________________
Name: Glenn P. Dickes
Title: Vice President
EXHIBIT A
to
Restated Certificate of Incorporation of
First Gibraltar Holdings Inc.
TERMS OF SUBORDINATION
1. Until the Payment Obligations under the Second Amended and Restated
Credit Agreement have been Fully Satisfied (as each such term is defined in the
Restated Certificate of Incorporation of First Gibraltar Holdings Inc. (the
"Corporation") to which this Exhibit A is attached), or such earlier time as the
Required Lenders under (and as defined in) the Second Amended and Restated
Credit Agreement may approve, on each date on which the Corporation receives
dividends, distributions or other funds from First Nationwide (Parent) Holdings
Inc., the Corporation shall lend an amount equal to the aggregate amount so
received to Marvel V Holdings Inc. (the "Borrower Parent") on a subordinated
basis as set forth below. Such loans shall be referred to herein as the
"Subordinated Debt."
2. The Subordinated Debt is, and shall be, subordinate to the extent and in
the manner hereinafter set forth, to the Payment Obligations until such time as
the Payment Obligations have been Fully Satisfied.
3. So long as the Payment Obligations shall not have been Fully Satisfied,
the Corporation shall not (i) ask, demand, sue for, take or receive from the
Borrower Parent, directly or indirectly, in cash or other property or by set-off
or in any other manner (including, without limitation, from or by way of
collateral), payment of all or any of the Subordinated Debt, or (ii) commence,
or join with any creditor other than the Agent or any Lender in commencing, or
directly or indirectly cause the Borrower Parent to commence, or assist the
Borrower Parent in commencing, any proceeding referred to in paragraph 5.
4. No payment (including any payment that may be payable by reason of any
other Debt (as defined in the Second Amended and Restated Credit Agreement) of
the Borrower Parent being subordinated to payment of the Subordinated Debt)
shall be made by or on behalf of the Borrower Parent for or on account of any
Subordinated Debt, and the Corporation shall not take or receive from the
Borrower Parent, directly or indirectly, in cash or other property or by set-off
or in any other manner, including, without limitation, from or by way of
collateral, payment of all or any of the Subordinated Debt, unless and until the
Payment Obligations shall have been Fully Satisfied.
5. In the event of any dissolution, winding up, liquidation, arrangement,
reorganization, adjustment, protection, relief or composition of the Borrower
Parent or its
<PAGE>
2
debts, whether voluntary or involuntary, in any bankruptcy, insolvency,
arrangement, reorganization, receivership, relief or other similar case or
proceeding under any Federal or State bankruptcy or similar law or upon an
assignment for the benefit of creditors or any other marshalling of the assets
and liabilities of the Borrower Parent or otherwise, the Agent, for its benefit
and for the ratable benefit of the Lenders, shall be entitled to have the
Payment Obligations be Fully Satisfied before the Corporation is entitled to
receive any payment of all or any of the Subordinated Debt, and any payment or
distribution of any kind (whether in cash, property or securities) that
otherwise would be payable or deliverable upon or with respect to the
Subordinated Debt in any such case, proceeding, assignment, marshalling or
otherwise (including any payment that may be payable by reason of any other
indebtedness of the Borrower Parent being subordinated to payment of the
Subordinated Debt) shall be paid or delivered directly to the Agent, for its
benefit and for the ratable benefit of the Lenders, for application (in the case
of cash) to, or as collateral (in the case of non-cash property or securities)
for, the payment or prepayment of the Payment Obligations until the Payment
Obligations shall have been Fully Satisfied.
6. In the event that any Subordinated Debt is declared due and payable
before its stated maturity, the Agent, for its benefit and for the ratable
benefit of the Lenders, shall be entitled to have all amounts due or to become
due on or in respect of all Payment Obligations be Fully Satisfied before the
Corporation is entitled to receive any payment (including any payment which may
be payable by reason of the payment of any other indebtedness of the Borrower
Parent being subordinated to the payment of the Subordinated Debt) by the
Borrower Parent on account of the Subordinated Debt.
7. Until such time as the Payment Obligations have been Fully Satisfied, if
any proceeding referred to in paragraph 5 above is commenced by or against the
Borrower Parent,
(i) the Agent is hereby irrevocably authorized and empowered
(in its own name or in the name of the Corporation or otherwise), but
shall have no obligation, to demand, sue for, collect and receive every
payment or distribution referred to in paragraph 5 above and give
acquittance therefor and to file claims and proofs of claim and take
such other action (including, without limitation, voting the
Subordinated Debt or enforcing any security interest or other lien
securing payment of the Subordinated Debt) as it may deem necessary or
advisable for the exercise or enforcement of any of the rights or
interests of the Agent and the Lenders hereunder; and
(ii) the Corporation shall duly and promptly take such action
as the Agent may request (A) to collect the Subordinated Debt for the
account of the Agent, for its benefit and for the ratable benefit of
the Lenders, and to file appropriate claims or proofs of claim in
respect of the Subordinated Debt, (B) to execute and deliver to the
<PAGE>
3
Agent such powers of attorney, assignments, or other instruments as the
Agent may request in order to enable the Agent to enforce any and all
claims with respect to, and any security interests and other liens
securing payment of, the Subordinated Debt, and (C) to collect and
receive any and all payments or distributions which may be payable or
deliverable upon or with respect to the Subordinated Debt.
8. All payments or distributions upon or with respect to the
Subordinated Debt which are received by the Corporation contrary to these Terms
of Subordination shall be received in trust for the benefit of the Agent, for
its benefit and for the ratable benefit of the Lenders, shall be segregated from
other funds and property held by the Corporation and shall be forthwith paid
over to the Agent, for its benefit and for the ratable benefit of the Lenders,
in the same form as so received (with any necessary indorsement) to be applied
(in the case of cash) to, or held as collateral (in the case of non-cash
property or securities) for, the payment or prepayment of the Payment
Obligations in accordance with the terms of the Loan Documents.
9. The Agent is hereby authorized to demand specific
performance of these provisions, whether or not the Borrower Parent shall have
complied with any of the provisions hereof applicable to it, at any time when
the Corporation shall have failed to comply with any of these provisions. The
Corporation hereby irrevocably waives any defense based on the adequacy of a
remedy at law, which might be asserted as a bar to such remedy of specific
performance.
10. No payment or distribution to the Agent pursuant to these
provisions shall entitle the Corporation to exercise any rights of subrogation
in respect thereof until the Payment Obligations shall have been Fully
Satisfied.
11. The holders of the Payment Obligations may, at any time
and from time to time, without any consent of or notice to the Corporation or
any other holder of the Subordinated Debt and without impairing or releasing the
obligations of the Corporation under these Terms of Subordination: (i) change
the manner, place or terms of payment or change or extend the time of payment
of, or renew payment or change or extend the time or payment of, or renew or
alter, the Payment Obligations (including any change in the rate of interest
thereon), or amend in any manner any agreement under which any of the Payment
Obligations is outstanding; (ii) sell, exchange, release, not perfect and
otherwise deal with any property at any time pledged, assigned or mortgaged to
secure the Payment Obligations; (iii) release anyone liable in any manner under
or in respect of the Payment Obligations; (iv) exercise or refrain from
exercising any rights against the Borrower Parent and others; and (v) apply any
sums form time to time received to the Payment Obligations.
<PAGE>
4
12. The Corporation will not without the consent of the
Required Lenders:
(i) Cancel or otherwise discharge any of the
Subordinated Debt (except upon the Payment Obligations being
Fully Satisfied), convert or exchange any of the Subordinated
Debt into or for any other indebtedness or equity interest or
subordinate any of the Subordinated Debt to any indebtedness
of the Borrower Parent other than the Payment Obligations;
(ii) Sell, assign, pledge, encumber or otherwise
dispose of any of the Subordinated Debt unless such sale,
assignment, pledge, encumbrance or disposition (i) is to a
person or entity other than the Borrower Parent or any of its
affiliates and (ii) is made expressly subject to these
provisions; or
(iii) Permit the terms of any of the Subordinated
Debt to be changed in such a manner as to have an adverse
effect upon the rights or interests of the Agent or the
Lenders hereunder.
13. The foregoing provisions regarding subordination are and
are intended solely for the purpose of defining the relative rights of the
holders of the Payment Obligations on the one hand and the holders of any
Subordinated Debt on the other hand. Such provisions are for the benefit of the
holders of the Payment Obligations and shall be enforceable by them directly
against the holders of any Subordinated Debt, and no holder of the Payment
Obligations shall be prejudiced in its right to enforce subordination of any of
the Subordinated Debt by any act or failure to act by the Borrower Parent or
anyone in custody of its assets or property. Nothing contained in the foregoing
provisions is intended to or shall impair, as between the Borrower Parent and
the holders of any Subordinated Debt, the obligations of the Borrower Parent to
such holders.
Exhibit E
to
Second Amended and Restated
Mafco Guaranty
FN Parent Debt
1. Principal Aggregate principal amount not to exceed $455,000,000.
2. Interest Not to exceed 13.0% per annum; provided, however, that if
the FN Parent Debt is issued in a Rule 144A placement and
FN Parent is required to offer to exchange that debt for
registered debt having the same terms, the interest rate
on the FN Parent Debt may be increased by up to 50 basis
points if either the registration statement for such
exchange offer is not filed by a prescribed time or the
exchange offer is not consummated by a prescribed time.
3. Other Terms Substantially as set forth in the Preliminary Offering
and Conditions Memorandum of FN Parent dated March 22, 1996 under the
heading "Description of the Notes," as modified by Annex I
attached hereto.
ANNEX F TO THE
THIRD AMENDMENT
Exhibit A
FORM OF CONSENT AND AGREEMENT
The undersigned hereby acknowledges notice of, and consents to
the terms and provisions of, the Security Agreement dated July 27, 1994, as
heretofore amended (as so amended, the "Security Agreement", the terms defined
or referenced therein being used herein as therein defined or referenced), from
Marvel V Holdings Inc. ("Borrower Parent") and NationsBank of Georgia, National
Association, only with respect to Sections 1 and 4 thereof, not in its
individual capacity but solely in its capacity as Voting Trustee (in such
capacity, the "Voting Trustee") under the Voting Trust Agreement dated as of
July 27, 1994 among Marvel IV Holdings Inc., the Voting Trustee, Borrower Parent
and the Agent referred to below, to Citibank, N.A., as agent (the "Agent") for
the Lenders referred to therein, and hereby agrees with the Agent that:
(a) The undersigned will make all payments to be made by it
under or in connection with the First Gibraltar Loan Agreement dated April __,
1996 (the "Assigned Agreement") between the undersigned and Borrower Parent
directly to the Borrower Collateral Account or otherwise in accordance with the
instructions of the Agent.
(b) All payments referred to in paragraph (a) above shall be
made by the undersigned irrespective of, and without deduction for, any
counterclaim, defense, recoupment or set-off and shall be final, and the
undersigned will not seek to recover from the Agent or any Lender for any reason
any such payment once made.
(c) Following the occurrence and during the continuance of
an Event of Default, the Agent shall be entitled to exercise any and all rights
and remedies of Borrower Parent under the Assigned Agreement in accordance with
the terms of the Security Agreement, and the undersigned shall comply in all
respects with such exercise.
(d) The undersigned will not, without the prior written
consent of the Agent, (i) cancel or terminate the Assigned Agreement or consent
to or accept any cancellation or termination thereof except pursuant to the
terms thereof, (ii) amend or otherwise modify the Assigned Agreement, or (iii)
make any prepayment of amounts to become due under or in connection with the
Assigned Agreement, except as expressly provided therein.
This Consent and Agreement shall be binding upon the undersigned
and its successors and assigns, and shall inure, together with the rights and
remedies of the Agent hereunder, to the benefit of the Agent and the Lenders and
their successors, transferees and
2
assigns. This Consent and Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned has duly executed this
Consent and Agreement as of the date set opposite its name below.
Dated: April __, 1996 First Gibraltar Holdings Inc.
By: _________________________
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Andrews
Group Incorporated Consolidated Balance Sheet and Statement of Operations and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000277025
<NAME> Andrews Group Incorporated
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 67
<SECURITIES> 0
<RECEIVABLES> 434
<ALLOWANCES> (64)
<INVENTORY> 95
<CURRENT-ASSETS> 779
<PP&E> 376
<DEPRECIATION> (81)
<TOTAL-ASSETS> 4,242
<CURRENT-LIABILITIES> 537
<BONDS> 0
<COMMON> 341
0
0
<OTHER-SE> (626)
<TOTAL-LIABILITY-AND-EQUITY> 4,242
<SALES> 351
<TOTAL-REVENUES> 351
<CGS> 216
<TOTAL-COSTS> 339
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (85)
<INCOME-PRETAX> (56)
<INCOME-TAX> 3
<INCOME-CONTINUING> (53)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (53)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
