EFTA02597029.pdf

From: jeffrey E. <[email protected]> Sent: Saturday, December 20, 2014 2:25 PM To: Richard Joslin Subject: Re: credit facility On Sat, Dec 20, 2014 at 6:11 AM, Richard Joslin < <mailto-> wrote: Fyi Begin forwarded message: From: Brad Wechsler <mailto >> Date: December 19, 2014 at 11:50:15 PM EST To: <mailto <mailto: C Subject: Re: credit facility Thank you; this is helpful. Unless you have more recent information--as you know=from your earlier conversation with barry--his desire is to have these $$ =orrowed from bfp in a "renewed" credit line. To the extent there=are "liquidity" issues at bfp he suggests we find mechanisms to deal with that and then in january deal with the lar=er issue of the trust taking over the PG loans as well as any incremental =apital infusions. I expect some messy issues in january, more complex than=the ones we're talking abt today. Perhaps we can discuss tomorrow. B From: Eileen Alexanderson imailto <mailto >j Sent: Friday, December 19, 2014 11:24 PM To: Brad Wechsler Cc: Richard Joslin < <mailto Subject: credit facility Brad, no apology necessary. The discussion launched =ithout the proper background on this to you or enough time to thoroughly d=scuss. I hope the following will help fill you in. EFTA_R1_01782356 EFTA02597029  Phaidon had a working cap line with Lloyds Bank when=the company was acquired. When the line was up for renewal Lloyds requeste= full net worth information on Leon which we preferred not to supply. Leon=suggested we move the line to Bank of America. At first B of A said they'd be unable set up the line =ecause of this being a UK based company. Jane Heller, our lender, in her u=ual style came through with an alternative but as we moved through the dia=og the bank was insistent on language in the loan document which was far too restrictive regarding the trusts which=were to provide a guarantee. Richard Ressler suggested we set up a line fr=m one of the family entities in a commercially reasonable fashion. Since w= had gone pretty with B of A, Ada worked with Paul Weiss to adapt the B of A loan agreement, adjusting to mo=erate restrictions I referred to. The trustees signed off on guarant=e of the line and two artworks owned by the 1997 Trust were provided as co=lateral. The credit facility had a maturity of one year becau=e B of A had offered only a one year maturity. Limit on the facility was s=t at $15mil in order to facilitate funding of Regan Arts as well as Phaido=. The same schedule of permitted drawdowns that had been part of the Lloyds facility was attached to the lo=n agreement. With hindsight, the document Paul Weiss had worked with Ada t= create facilitated lending from Black Family Partners to Phaidon Gl=bal but did not provide documentation for the borrowing from Phaidon Global by the operating company, Phaidon Pr=ss. We put simple notes in place for each of the drawdowns you will see on=the table below as documentation of the advances to the operating company.= The left side of the table below shows the permitted=drawdown schedule. The right side of the table show the actual activity.=C2 You will see the an additional draw of $300k in December 2013 above =he schedule which came as a request from the Phaidon CFO and Leon approved. In the February-April period when repay=ent of the line was normally made using cash generated from the seasonally=high period, only one-half of the scheduled repayment was made due to a ti=ht cash situation. In the Apr-Jul period the balance moved back into range (with the addl $300k). Phaidon =80 s new management team joined in April. In the subsequent months, Keit= and John worked to get their arms around the cash needs for the balance o= the calendar year. These cash needs reflected a higher payroll tied to the new hires as well as weak business trends in =all 2014 (a result of the period of management turmoil that had preceded t=e new team joining). There has been much discussion of cash needs fo= consecutive Board meetings since August. Forecast of need for 4.2-4.5mil GBP ($6.6mil) has been consistent since Ju=y financials were produced. Authorization for additional funding was given=at the Board Meeting. August, Sept, and Oct draws on the table below=followed as needed. It was agreed at the November Board meeting that it made sense to term out the $8mil balanc= to five years and establish a shorter facility for the working cap needs =n the next 12 months. The actual credit facility expired in September. =AO At that point the team here began to discuss a different structure, one=with the underlying owners of Phaidon Global as liquidity providers rather=than Black Family Partners. Unfortunately, it was only late last month at the Trustees meeting the dialog was pursued=with enough depth that an action plan was laid out. Phaidon Global Cre=it Facility from Black Family Partners-established September 2013 Permitted Drawdown Phaidon 2 EFTA_R1_01782357 EFTA02597030 per =AO Schedule GBP US$ Actual Draw Balance prior to Oct lst<=> 3.5mil 5.65mil 6-Sep ($4.5mil) $4.5mi1 Oct 1st-Feb 1st 4.25mil 6.8mil 2.Oct (0.5mil) S.0mil 3-Nov (1.0mil) 6.Omil 19-Nov (0.8mil) 6.8mil 3 EFTA_R1_01782358 EFTA02597031  20-Dec (0.3mil) 7.1mil Feb 1st-Apr 1st 1.5mil 2.4mil 19-Feb 1.0mil 6.1mil 20-Mar 1.8mil 4.3mil Apr 1st-Jul 1st 2.5mil 4.0mil Jul 1st-Oct 1st 3.5mil 5.6mi1 8-Aug (1.25mil) 5.5mil 8-Sep (1.25mi1) 4 EFTA_R1_01782359 EFTA02597032 6.8mil *authorized at Board mee=ing Incremental amount drawn= 16-Oct (1.25mil) 8.0mil 6-Nov (2.0mil) 10.0mil 11/21/2014 (1.0mil) 11.0mil <=span> <=span> ReganArts Draw Balance 5 EFTA_R1_01782360 EFTA02597033 1/17/2014 ($55k) $0.055mil 2/11/2014 (lmil) 1.055mil 2/11/2014 55k 1.0mil 6/9/2014 (0.5mil) 1.5mil 8/18/2014 (lmil) 2.5mil 10/9/2014 (0.25m11) 2.75mil 10/29/2014 6 EFTA_R1_01782361 EFTA02597034 (0.25mi1) 3.0mil 11/20/2014 (0.4mi1) 3.4mi1 As Rich indicated in his email earlier this evening,=we will assemble the formal funding request for the Trustees. There is an =mmediate need for $1mil funding-$500k each to Phaidon and Regan Arts.</=> Eileen Alexander=on Elysium Management<=> 445 Park Avenue<=u> Suite 1401 New York NY 10022 Phone: <=> Email: www.imax.com <http://www.imax.c=m> IMAX is a registered trademark of IMAX Corporation. IMPORTANT NOTICE Information contained in this e-mail correspondence and any attachments is =onfidential information intended only for the use of the individual or ent=ty named above. Any reader of this message who is not the intended recipient of this corres=ondence is hereby notified that any dissemination, distribution, copying or communication of the contents of this correspondence is strictly prohibi=ed. If this e-mail was not addressed to you , please immediately notify us=br> by phone in Canada at (905) 403- 7 EFTA_R1_01782362 EFTA02597035 6500 <tel:%28905%29%20403.6500> (collect calls will be accepted= or by email at <=a> and delete and destroy this correspondence inadvertently sent to you. Thank you <mailto please =ote The information contained in this communication is confiden=ial, may be attorney-client privileged, may constitute inside informati=n, and is intended only for the use of the addressee. It is the propert= of JEE Unauthorized use, disclosure or copying of this communica=ion or any part thereof is strictly prohibited and may be unlawful. If =ou have received this communication in error, please notify us immediat=ly by return e-mail or by e-mail to [email protected] <mailto:jeevacation@gmail=com> , and destroy this comm=nication and all copies thereof, including all attachments. copyright -=11 rights reserved 8 EFTA_R1_01782363 EFTA02597036