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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 7, 1994
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SPELLING ENTERTAINMENT GROUP INC.
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(Exact name of registrant as specified in its charter)
Florida
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(State or other jurisdiction of incorporation)
1-6739 59-0862100
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(Commission (IRS Employer
File Number) Identification No.)
5700 Wilshire Boulevard
Los Angeles, California 90036
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (213) 965-5700
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N.A.
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Effective as of December 7, 1994, Spelling Entertainment Group Inc. (the
"Registrant"), certain of its subsidiaries and Viacom Inc. ("Viacom"), as
successor to Blockbuster Entertainment Corporation ("Blockbuster") entered into
Amendment No. 1 (the "Amendment") to the Credit Agreement (the "Credit
Agreement"), dated as of January 31, 1994, by and among the Registrant, the
Borrowers named therein and Blockbuster in order to effect certain changes
necessitated by the merger (the "Merger") of Blockbuster with and into Viacom
effective September 29, 1994.
In connection with the Merger, Blockbuster's credit facility (the "Blockbuster
Credit Agreement"), dated as of December 22, 1993, with Bank of America
National Trust and Savings Association ("Bank of America"), as Agent, and the
other parties thereto was repaid and terminated. The Credit Agreement provided
that in the event the Blockbuster Credit Agreement was terminated, the parties
thereto were required to negotiate in good faith to reset applicable interest
rates and fees to reflect the cost of funds to Viacom under its credit
facilities. Such cost of funds to Viacom are higher than were Blockbuster's
cost of funds under the Blockbuster Credit Agreement.
The Amendment effects the following changes to the Credit Agreement: (i)
increases in the interest rates and fees payable under both the revolving and
term portion of the Credit Agreement to levels consistent with those payable
under Viacom's credit facilities, (ii) an increase in the total aggregate funds
available to the Registrant under the revolving portion of the Credit Agreement
from $75 million to $100 million, (iii) the addition of a base rate interest
alternative and (iv) certain administrative changes. The parties intend to
execute an Amended and Restated Credit Agreement reflecting such changes as
soon as practicable.
As of December 7, 1994, Viacom beneficially owned approximately 78% of the
outstanding common stock, $0.10 par value per share, of the Registrant. The
Registrant believes that the terms of the Credit Agreement, as amended by the
Amendment, are as favorable to the Registrant as those which could be obtained
from an unaffiliated party. Such terms have been approved by an independent
committee of the Registrant's Board of Directors.
Separately, in connection with the repayment and termination of the Blockbuster
Credit Facility, a Guaranty provided by the Registrant in favor of Bank of
America pursuant to the Blockbuster Credit Facility became null and void. The
Registrant has not executed a guaranty with respect to Viacom's credit
facilities and has incurred no liability with respect to such facilities or
other debt of Viacom.
The descriptions contained herein of the Amendment are modified in their
entirety by the terms thereof, a copy of which is attached as Exhibit 99 hereto
and which is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
The Exhibits to this Report are listed in the Exhibit Index set forth
elsewhere herein.
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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 hereunto duly authorized.
SPELLING ENTERTAINMENT GROUP INC.
By: /s/ Thomas P. Carson
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Thomas P. Carson
Executive Vice President, Treasurer
and Chief Financial Officer
Date: December 22, 1994
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SPELLING ENTERTAINMENT GROUP INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number and
Description of Exhibit
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<S> <C>
1. None
2. None
4. None
16. None
17. None
20. None
23. None
24. None
27. None
99. Amendment No. 1 to Credit Agreement, dated as of December 7, 1994 by and among
the Registrant, certain of its subsidiaries and Viacom Inc.
</TABLE>
<PAGE> 1
Exhibit 99
AMENDMENT NO. 1
Amendment No. 1, dated as of December 7, 1994 ("Amendment No. 1"), to
the Credit Agreement, dated as of January 31, 1994 (the "Credit Agreement")
among SPELLING ENTERTAINMENT GROUP INC., a Florida corporation (the "Company"),
and its subsidiaries as Borrowers and BLOCKBUSTER ENTERTAINMENT CORPORATION, a
Delaware corporation ("Blockbuster"), as Lender.
WITNESSETH:
WHEREAS, Blockbuster was merged with and into Viacom Inc. ("Viacom")
effective as of September 29, 1994; and
WHEREAS, the parties who have heretofore entered into the Credit
Agreement and Viacom, as successor Lender under the Credit Agreement now desire
to amend certain provisions of such Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Amendments. (a) The definition of "Applicable Rate"
in Section 1.3 of the Credit Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:
"1.3 "Applicable Rate" means: (a) with respect to
each Eurodollar Rate Loan hereunder, the Eurodollar Rate and
(b) with respect to each Base Rate Loan hereunder, the Base
Rate."
(b) The definition of "Interest Period" in Section 1.33 of the
Credit Agreement is hereby amended by (i) inserting the words "(a) in the case
of Base Rate Loans, the period commencing on the date such loans are made or on
the date of conversion from Eurodollar Rate Loans and ending on the last day of
each fiscal quarter and (b)" after the word "means" in the first line thereof;
(ii) by deleting the word "Revolving" from the first line thereof and replacing
such word with the words "Eurodollar Rate"; and (iii) inserting the words "with
respect to any Base Rate Loans or Eurodollar Rate Loans," after the words
"provided, however,".
(c) The definition of "Lender" in Section 1.34 of the Credit
Agreement is hereby amended by deleting the words "Blockbuster Entertainment
Corporation" and replacing such words with "Viacom Inc.".
(d) The definition of "Notice of Continuation" in Section 1.45 of
the Credit Agreement is hereby amended by inserting the words "or Conversion"
following the word "Continuation" and by deleting "2.1.2" and replacing it with
"2.3".
(e) The definition of "Payment Date" in Section 1.47 of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following:
"1.47 [Reserved]".
(f) The definition of "Republic" in Section 1.53 of the Credit
Agreement is hereby amended by deleting the words "Pictures Corporation" and
replacing such words with "Entertainment Inc.".
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(g) The definition of "Stated Amount of Revolving Credit" in
Section 1.57 of the Credit Agreement is hereby amended by deleting the words
"Seventy Five Million Dollars ($75,000,000)" in clause (a) thereof and
replacing such words with "One Hundred Million Dollars ($100,000,000)".
(h) Section 1 of the Credit Agreement is hereby amended to insert
the following definitions:
"1.64 "Viacom Credit Facilities" means (i) the $6.489
Billion Credit Agreement, dated as of July 1, 1994, as
amended as of August 5, 1994 by Amendment No. 1 and as of
September 29, 1994 by Amendment No. 2, among Viacom, each of
the several Banks parties thereto, The Bank of New York, as a
Managing Agent as the Documentation Agent, Citibank, N.A. as a
Managing Agent and as the Administrative Agent, Morgan
Guaranty Trust Company of New York, as a Managing Agent, JP
Morgan Securities Inc., as the Syndication Agent, Bank of
America NT & SA, as a Managing Agent, the Banks identified as
Agents on the signature pages thereof, as Agents, and the
Banks identified as Co-Agents on the signature pages thereof,
as Co-Agents and (ii) the $1.8 Billion Credit Agreement, dated
as of September 29, 1994, among Viacom, each of the several
Banks indicated on the signature pages thereof, The Bank of
New York, as a Managing Agent as the Documentation Agent,
Citibank, N.A. as a Managing Agent and as the Administrative
Agent, Morgan Guaranty Trust Company of New York, as a
Managing Agent, JP Morgan Securities Inc., as the Syndication
Agent, Bank of America NT & SA, as a Managing Agent and the
Banks identified as Agents on the signature pages thereof.
1.65 "Base Rate" means, for any day, a fluctuating
interest rate per annum as shall be in effect for such day,
which rate per annum shall be equal at all times to the higher
of:
(i) the rate of interest announced publicly by
the Administrative Agent of the Viacom Credit
Facilities in New York, New York as the
Administrative Agent's base rate in effect for such
day; or
(ii) the Federal Funds Rate for such day plus 1/2
of 1% per annum.
1.66 "Base Rate Loan" means any Loan or portion thereof
that bears interest with reference to the Base Rate.
1.67 "Eurodollar Rate" means for each day of the
applicable Interest Period for such Loan, the rate of interest
per annum determined by the Administrative Agent of the Viacom
Credit Facilities to be the offered rate per annum at which
deposits in dollars appears on the Telerate Page 3750 (or any
successor page) as of 11:00 A.M. (London time), or in the
event such offered rate is not available from the Telerate
Page, the average (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum, if such percentage is not
such a multiple) of the rates offered by the principal office
of each of the Reference Banks (as defined in the Viacom
Credit Facilities) in the London interbank market at 11:00
A.M. (London time), two Banking
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Days before the first day of such Interest Period for deposit
in dollars in an amount substantially equal to the aggregate
of the Eurodollar Rate Loans to which such Interest Period
relates and for a period equal to such Interest Period.
1.68 "Eurodollar Rate Loan" means any Loan or portion
thereof that bears interest at a rate determined with
reference to the Eurodollar Rate.
1.69 "Applicable Eurodollar Rate Margin" means
1.25%, to be reduced to a minimum of 1%, or increased, as
warranted by a corresponding reduction or increase in Lender's
cost of funds.
(i) Section 2.1.2 of the Credit Agreement is hereby amended by:
(i) deleting the phrase "Not later than noon (New York
time) on the fourth Banking Day prior to the requested Closing
Date for any such loan," and replacing it with the phrase
"With respect to Eurodollar Rate Loans, not later than noon
(New York time) on the fourth Banking Day prior to the
requested Closing Date for any such loan, and with respect to
Base Rate Loans, not later than noon (New York time) on the
second Banking Day prior to the requested Closing Date for any
such loan,";
(ii) deleting the word "and" following the word
"therefor," in Clause (b) thereof;
(iii) at the beginning of Clause (c) thereof, adding the
words "with respect to Eurodollar Rate Loans,";
(iv) deleting Clause (c)(iii) in its entirety;
(v) in clause c(iv): (a) deleting "(iv)" replacing it
with "(iii)", (b) deleting the words "or Notice of
Continuation" and replacing such words with "," , and (c)
deleting "." and replacing it with "; and (d) whether such
Loan shall be a Base Rate Loan or a Eurodollar Rate Loan.";
and
(vi) deleting the following language:
"On or before noon New York time on the fourth banking Day
prior to the expiration of any Interest Period, the Borrowers
shall deliver written notice (a "Notice of Continuation") to
Lender which shall specify (i) the amount of the Revolving
Loan to be continued, and (ii) the requested Interest Period.
In lieu of delivering the above-described Notice of
Continuation, Borrowers may give Lender telephonic notice by
the required time of any proposed continuation under this
Section 2.1.2; provided that such notice shall be promptly
confirmed in writing by delivery of a Notice of Continuation
to lender on or before the proposed continuation date. If
Borrowers shall fail to give Lender a Notice of Continuation
as provided above, Borrowers shall be deemed to have given
Lender a Notice of Continuation selecting an Interest Period
of one month for the then outstanding principal amount of the
Revolving
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Loan with respect to which the Interest Period is expiring.".
(j) Section 2.3 of the Credit Agreement is hereby amended as
follows: (i) by deleting the section number "2.3" and replacing it with "2.4";
(ii) by deleting the section number "2.3.1" and replacing it with "2.4.1";
(iii) by deleting the section number "2.3.2" and replacing it with "2.4.2"; and
(iv) by deleting the section number "2.3.3" and replacing it with "2.4.3".
(k) The Credit Agreement is hereby amended by inserting the
following new Section 2.3 following Section 2.2:
"2.3 Conversion/Continuation Option. The Borrower may
elect (i) at any time to convert Base Rate Loans or any
portion thereof to Eurodollar Rate Loans or (ii) at the end of
any Interest Period with respect thereto, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate
Loans, or to continue such Eurodollar Rate Loans or any
portion thereof as Eurodollar Rate Loans for an additional
Interest Period; provided, however, that the aggregate of the
Eurodollar Rate Loans of the Borrower so converted or so
continued for each Interest Period must be not less than
$1,000,000 and in integral multiples of $500,000 in excess
thereof. Each such election (a "Notice of Conversion or
Continuation") shall be made by giving the Lender at least two
Banking Day's, in the case of a conversion to or a
continuation of a Base Rate Loan, and four Banking Day's, in
the case of a conversion to or a continuation of a Eurodollar
Rate Loan, prior written notice thereof specifying (A) the
amount and type of conversion or continuation, (B) in the case
of a conversion to or a continuation of Eurodollar Rate Loans,
the Interest Period therefor, and (C) in the case of a
conversion the date of conversion (which date shall be a
Banking Day and, if a conversion from a Eurodollar Rate Loan,
shall also be the last day of the Interest Period therefor).
Notwithstanding the foregoing, no conversion in whole or in
part of Base Rate Loans to Eurodollar Rate Loans, and no
continuation in whole or in part of Eurodollar Rate Loans upon
the expiration of any Interest Period therefor, shall be
permitted at any time at which an Event of Default shall have
occurred and be continuing. If, within the time period
required under the terms of this Section 2.3, the Lender does
not receive a Notice of Conversion or Continuation from the
Borrower containing an election to continue all or any portion
of the Eurodollar Rate Loans for an additional Interest Period
or to convert all or any portion of such Loans, then, upon the
expiration of the Interest Period therefor, such Loans or the
portions thereof for which an election to continue or convert
has not been made will be automatically continued for a period
of one month. Each Notice of Conversion or Continuation shall
be irrevocable. In the case of immediately successive
Interest Periods applicable to a Eurodollar Rate Loan
continued pursuant to a Notice of Continuation or Conversion
(or in the absence of a Notice of Continuation or Conversion
as provided in this Section 2.3) each successive Interest
Period shall commence on the day on which the next preceding
Interest Period expires.
(l) Section 3.1.1 of the Credit Agreement is hereby amended by
deleting it in its entirety and replacing it with the following:
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"3.1.1 The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date thereof until the
principal amount thereof shall be paid in full, at the
following rates per annum, on such dates as specified below
(each a "Payment Date"):
(a) Base Rate Loans. For Base Rate
Loans, at a rate per annum equal at all times to the Base Rate
in effect from time to time, payable quarterly in arrears on
the last day of September, December, March and June, on the
Final Revolving Loan Maturity Date and on the date any Base
Rate Loan is converted or paid in full.
(b) Eurodollar Rate Loans. For Eurodollar Rate
Loans, at a rate per annum equal at all times during the
Interest Period for each Eurodollar Rate Loan to the sum of
the Eurodollar Rate for such Interest Period plus the
Applicable Eurodollar Rate Margin, payable in arrears on the
last day of such Interest Period."
(m) Section 3.1.2 of the Credit Agreement is hereby amended by
deleting it in its entirety.
(n) Section 3.1.3 is amended by deleting "3.1.3" and replacing
with "3.1.2".
(o) Section 3.1.4 is amended by deleting "3.1.4" and replacing
with "3.1.3".
(p) Section 3.2.1 of the Credit Agreement is amended by: (i)
deleting ".175%" and replacing it with ".375%"; (ii) deleting the phrase "on
each Payment Date applicable to the Revolving Loan" and replacing it with
"quarterly in arrears on the last day of each fiscal quarter"; (iii) deleting
"." at the end of Section 3.2.1; and (iv) adding the following:
"; provided further, that such commitment fee shall be reduced
to correspond with any reductions in the commitment fees
payable by Lender to its lenders under the Viacom Credit
Facilities."
(q) Section 3.2.2 of the Credit Agreement is amended by deleting
the words "Three Hundred Fifty Thousand Dollars ($350,000) per annum (i.e.,
.20% of $175,000,000)" and replacing such words with "Four Hundred Thousand
Dollars ($400,000) per annum (i.e., .20% of $200,000,000)".
(r) The Credit Agreement is hereby amended by inserting the
following after Section 3.3:
"3.4 Break-Funding Costs. If Lender receives any
payment of principal of, or is subject to a conversion of, any
Eurodollar Rate Loan other than on the last day of an Interest
Period relating to such Loan, as a result of any payment or
conversion made by the Borrower or acceleration of the
maturity of the amounts due under this Agreement pursuant to
Section 8.2.3 or for any other reason, the Borrower shall,
upon demand by Lender, pay to the Lender any amounts required
to compensate Lender for any additional losses, costs or
expenses which it may reasonably incur as a result of such
payment or conversion, including, without limitation, any loss
(excluding any loss of the margin payable in accordance with
Section 3.1.1(b) on the amount of principal so paid, or any
loss), cost or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by Lender
to fund or maintain such Loan. The obligations of the
Borrower contained in this Section 3.4 shall survive payment
of the Loans."
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(s) Section 4.3 of the Credit Agreement is hereby amended by (i)
deleting the words "Revolving Loans, without premium." from the first sentence
thereof and replacing such words with "Eurodollar Rate Loans, without premium;
provided, however, that any such prepayments are made in accordance with
Section 3.4."; (ii) deleting the words ",without premium" from the penultimate
sentence thereof; and (iii) deleting the last sentence thereof in its entirety.
(t) Section 6.1 of the Credit Agreement is hereby amended by
deleting from the final parenthetical of such Section the words "which is
prohibited under the applicable foreign law from guaranteeing the Credit
Obligations".
(u) Section 7.1.6 of the Credit Agreement is hereby amended by
inserting the word "Group" following the word "Entertainment".
(v) Section 8.1.9 of the Credit Agreement is amended by deleting
the words "Blockbuster Credit Facility" and replacing such words with "Viacom
Credit Facilities and any successor credit facilities obtained by Lender".
(w) Section 8.2.3 of the Credit Agreement is amended by deleting
the words "Blockbuster Credit Facility" and by replacing such words with
"Viacom Credit Facilities".
(x) Schedule 7.1.6 of the Credit Agreement is amended by: (i)
inserting the word "Group" following the word "Entertainment" in the heading
thereof; (ii) deleting "Laurel EFX, Inc." and (iii) inserting the following
subsidiaries:
"Spelling Entertainment Inc.
Republic Entertainment Inc.
Repix, Inc.
Republic Distribution Corporation
Republic Pictures Entertainment Inc.
Republic Pictures Television
Virgin Interactive Entertainment plc.
Virgin Interactive Entertainment, Inc.
Virgin Interactive Entertainment (Europe) Ltd."
SECTION 2. Effectiveness. This Amendment No. 1 will be
effective as of the date first above written.
SECTION 3. Representations and Warranties. Each Borrower and
Guarantor hereby represents and warrants that as of the date hereof, both
before and after giving effect to this Amendment, no Default or Event of
Default shall exist or be continuing under the Credit Agreement.
SECTION 4. Miscellaneous. (a) Capitalized terms used herein and
not otherwise defined herein shall have the meanings ascribed to them in the
Credit Agreement.
(b) Except as amended hereby, all of the terms of the Credit
Agreement shall remain and continue in full force and effect and are hereby
confirmed in all respects.
(c) This Amendment shall be a Credit Document for the purposes of
the Credit Agreement.
(d) This Amendment may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto were upon the same instrument. Delivery of an executed counterpart of
a signature page of this Amendment by telecopier shall be effective as delivery
of a manually executed counterpart of this Amendment.
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(e) It is the intention of the parties hereto to enter an Amended
and Restated Credit Agreement incorporating the terms of the Credit Agreement
as amended hereby by no later than January 31, 1995.
(f) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HERETO SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK.
SECTION 5. Guarantor Confirmation. By signing below, each of
the Guarantors hereby agrees to the terms of the foregoing Amendment No. 1 and
confirms that the Guarantee, remains in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
Borrowers
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SPELLING ENTERTAINMENT GROUP INC.
SPELLING ENTERTAINMENT INC.
AARON SPELLING PRODUCTIONS, INC.
LAUREL ENTERTAINMENT, INC.
SPELLING FILMS INTERNATIONAL, INC.
SPELLING TELEVISION INC.
TORAND PRODUCTIONS INC.
WORLDVISION ENTERPRISES, INC.
HAMILTON PROJECTS, INC.
LAUREL TV, INC.
LAUREL-KING, INC.
LAUREL PICTURES INC.
REPUBLIC ENTERTAINMENT INC.
REPUBLIC DISTRIBUTION CORPORATION
REPUBLIC PICTURES ENTERTAINMENT INC.
REPUBLIC PICTURE TELEVISION
By: REPUBLIC PICTURES
ENTERTAINMENT INC.
Its: General Partner
VIRGIN INTERACTIVE ENTERTAINMENT INC.
By:
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As an authorized officer of each of the foregoing
corporations
Address: 5700 Wilshire Boulevard
Los Angeles, California 90036
Lender
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VIACOM INC.
By:
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Title:
Address: 1515 Broadway
New York, New York 10036
