UNITED STATES
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): March 5, 2010
RHI ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE
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001-34102
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36-4614616
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(State or other jurisdiction
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(Commission
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(IRS Employer
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of incorporation)
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File Number)
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Identification No.)
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1325 Avenue of Americas, 21st Floor, New York, NY
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10019
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(Address of principal executive offices)
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(Zip Code)
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Registrants telephone number, including area code
(212) 977-9001
N/A
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement
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As previously reported, on December 23, 2009, RHI Entertainment, Inc.s (the Companys)
indirect subsidiary, RHI Entertainment, LLC (the Borrower), entered into a Forbearance Agreement
(as amended on January 22, 2010, the First Lien Forbearance Agreement) with lenders holding a
majority in principal amount of the loans under its $525 million Credit, Security, Guaranty and
Pledge Agreement (the First Lien Credit Agreement) among the Borrower, RHI Entertainment Holdings
II, LLC ( Holdings), the guarantors named therein, the lenders named therein and JPMorgan Chase
Bank, N.A., as administrative agent for the lenders (the First Lien Agent) and as issuing bank,
and with counterparties to the Borrowers interest rate hedge agreements (the swaps). Holdings
and the subsidiaries of the Borrower that guarantee the loans under the First Lien Credit Agreement
(the Guarantors) are also party to the First Lien Forbearance Agreement. Under the First Lien
Forbearance Agreement, the lenders and swap counterparties agreed to forbear, for a period of time
ending on February 26, 2010 (the Forbearance Period), from exercising their rights and remedies
as creditors that may exist by virtue of specified defaults which have occurred or may occur
(First Lien Specified Defaults).
In addition, as previously reported, on February 12, 2010, the Borrower, Holdings, the
Guarantors, lenders holding a majority in principal amount of the loans under the Borrowers $75
million Credit, Security, Guaranty and Pledge Agreement (the Second Lien Credit Agreement), and
Wilmington Trust FSB, as successor agent (the Second Lien Agent), entered into a separate
forbearance agreement (the Second Lien Forbearance Agreement and, together with the First Lien
Forbearance Agreement, the Forbearance Agreements). Under the Second Lien Forbearance Agreement,
the lenders agreed to forbear, for the Forbearance Period, from exercising their rights and
remedies as creditors that may exist by virtue of specified defaults which have occurred or may
occur (Second Lien Specified Defaults and, together with the First Lien Specified Defaults, the
Specified Defaults).
The Forbearance Period expired under each of the Forbearance Agreements in accordance with its
terms on February 26, 2010. On March 5, 2010, the Borrower, Holdings, the Guarantors, lenders
holding a majority in principal amount of the loans under the First Lien Credit Agreement, and the
First Lien Agent entered into Amendment No. 2 to the First Lien Forbearance Agreement (the First
Lien Amendment), and the Borrower, Holdings, the Guarantors, lenders holding a majority in
principal amount of the loans under the Second Lien Credit Agreement, and the Second Lien Agent
entered into Amendment No. 1 to the Second Lien Forbearance Agreement (the Second Lien Amendment
and, together with the First Lien Amendment, the Amendments). The Amendments are each dated as
of February 26, 2010 (the date of expiration of the Forbearance Period), although they were each
executed only on March 5, 2010, the date on which a majority of the lenders under the First Lien
Credit Agreement and the Second Lien Credit Agreement, respectively, provided consent to the
Amendments. Among other things, each of the Amendments extends the Forbearance Period to March 31,
2010 and extends the temporary waivers for certain of the Specified Defaults to March 31, 2010. The
Forbearance Period and temporary waivers, each as extended, may terminate prior to March 31, 2010
under certain circumstances, including the breach of various covenants set forth in the Forbearance
Agreements and Amendments. Each of the Amendments effected the following changes:
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Reduced the minimum cash balance to $10.0 million;
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added a requirement for delivery of audited financial statements for the fiscal year
ended December 31, 2009;
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added a requirement for delivery of February 2010 monthly financial statements;
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added a requirement for delivery of status reports and contractual documentation
relating to the production of the Borrowers 2010 slate;
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added a requirement for delivery of specified documents relating to restructuring of
certain of the Companys contractual commitments;
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added a requirement for delivery of copies of notices received from guilds and others;
and
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waived a prior requirement to deliver a specified account control agreement.
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The First Lien Agent and lenders under the First Lien Credit Agreement are entitled to review
certain of the information specified above before the Borrower executes final copies of those
agreements. In addition, each Amendment added the following as additional Specified Defaults
(which have occurred or may occur during the Forbearance Period, as extended):
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Cross defaults resulting from the failure to make deferred purchase price payments in
excess of specified thresholds;
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Defaults resulting from the failure to pay rent at the Borrowers headquarters;
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Defaults resulting from a specified violation of a covenant prohibiting negative
pledges;
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Defaults resulting from a specified violation of a covenant prohibiting the assignment
of receivables; and
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Defaults arising from public admission in SEC filings by the Company of an inability to
pay debts when due.
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The aforementioned description of the Forbearance Agreements and Amendments is qualified in
its entirety by the full terms and conditions thereof. A copy of the First Lien Forbearance
Agreement has been filed with the Securities and Exchange Commission (the SEC) on December 24,
2009, as Exhibit 10.1 to the Companys Current Report on Form 8-K, a copy of Amendment No. 1 to the
First Lien Forbearance Agreement has been filed with the SEC on January 2010 as Exhibit 10.1 to the
Companys Current Report on Form 8-K, and a copy of the First Lien Amendment has been filed with
the SEC as Exhibit 10.1 to this Current Report on 8-K, each of which is incorporated by reference
herein. A copy of the Second Lien Forbearance Agreement has been filed with the SEC on February
16, 2010 as Exhibit 10.3 to the Companys Current Report on Form 8-K, and a copy of the Second Lien
Amendment has been filed with the SEC as Exhibit 10.2 to this Current Report on Form 8-K, each of
which is incorporated herein by reference.
The Forbearance Agreements, as amended, are short term arrangements that allow the Borrower to
work with the First Lien Agent and lenders under the First Lien Credit Agreement and the Second
Lien Agent and lenders under the Second Lien Credit Agreement to develop a longer-term strategy for
restructuring its liabilities. If the Borrower is not able to cure all defaults under the First
Lien Credit Agreement and the Second Lien Credit Agreement or enter into new forbearance agreements
(or amendments to the existing Forbearance Agreements, as amended) by March 31, 2010 (or any
earlier date that any Forbearance Agreement may be terminated), then the First Lien Agent and
lenders under the First Lien Credit Agreement and swap counterparties, or the Second Lien Agent and
the lenders under the Second Lien Credit Agreement, as applicable, may exercise all of their rights
and remedies, including acceleration of the loans and foreclosure on collateral, which if
exercised would likely result in a filing under Chapter 11 of the Bankruptcy Code by the
Borrower.
Item 2.06. Material Impairments;
Item 8.01. Other Events
As previously disclosed in Current Reports on Form 8-K filed with the SEC on December 24, 2009 and
February 16, 2010, as a result of market conditions during the fourth quarter of 2009, the Company
expected that further reductions in (i) the value of the Companys film library as provided by a
third party valuation and (ii) a substantial impairment of the net book value of the Companys film
library in accordance with Companys internal analysis had occurred during the fourth quarter of
2009 and/or would occur during the first quarter of 2010.
In the Form 8-K filed by the Company on February 16, 2010, we reported that, while our management
was still in the process of conducting its analysis of the ultimate revenue of our films, based on
work done to date, our preliminary estimate was that impairment charges totaling approximately $200
million to $250 million will be recorded for the year ended December 31, 2009. As stated in that
Form 8-K, that range represented a preliminary estimate and remained subject to additional review,
including review by the Companys auditors, and the final amount of the impairment charge could
differ materially from the preliminary estimates.
As a
result of the Companys continued analysis of the ultimate revenue of its films based on its
work done to date, the Company currently estimates that the amount of the impairment charges for
the year ended December 31, 2009 will total approximately $300 million to $350 million. These
results are estimates only and the final results remain subject to continuing review, including
review by the Companys auditors, and could differ materially from these estimates.
Item 9.01 Exhibits.
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Exhibit
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Number
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Description
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10.1
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Amendment No. 2 to the Forbearance Agreement, dated as of February
26, 2010 (executed March 5, 2010), among RHI Entertainment, LLC,
its subsidiaries party to the Credit Agreement, RHI Entertainment
Holdings II, LLC, the Lenders party to the Credit Agreement,
certain swap counterparties, and JPMorgan Chase Bank, N.A., as
Administrative Agent and as Issuing Bank.
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10.2
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Amendment No. 1 to the Forbearance Agreement, dated as of February
26, 2010 (executed March 5, 2010), among RHI Entertainment, LLC,
its subsidiaries party to the Second Lien Credit Agreement, RHI
Entertainment Holdings II, LLC, the Lenders party thereto and
Wilmington Trust FSB, as Administrative Agent.
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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.
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Date: March 11, 2010
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RHI ENTERTAINMENT, INC.
(Registrant)
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By:
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/s/ Henry S. Hoberman
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Name:
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Henry S. Hoberman
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Title:
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Executive Vice President, General Counsel &
Secretary
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EXHIBIT INDEX
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Exhibit
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Number
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Description
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10.1
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Amendment No. 2 to the Forbearance Agreement, dated as of February
26, 2010 (executed March 5, 2010), among RHI Entertainment, LLC,
its subsidiaries party to the Credit Agreement, RHI Entertainment
Holdings II, LLC, the Lenders party to the Credit Agreement,
certain swap counterparties, and JPMorgan Chase Bank, N.A., as
Administrative Agent and as Issuing Bank.
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10.2
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Amendment No. 1 to the Forbearance Agreement, dated as of February
26, 2010 (executed March 5, 2010), among RHI Entertainment, LLC,
its subsidiaries party to the Second Lien Credit Agreement, RHI
Entertainment Holdings II, LLC, the Lenders party thereto and
Wilmington Trust FSB, as Administrative Agent.
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