SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ______ to ___________.
Commission File Number 0-25308
FIRST LOOK MEDIA, INC.
(f/k/a Overseas Filmgroup, Inc.)
(Exact name of Registrant as Specified in Its Charter)
Delaware 13-3751702
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
8800 Sunset Blvd., Third Floor, Los Angeles, CA 90069
(Address of principal executive offices) (zip code)
Registrant's Telephone Number, Including Area Code: (310) 855-1199
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 __
The number of shares of common stock outstanding as of May 21, 2001 was
9,803,906.
FIRST LOOK MEDIA, INC.
INDEX
Part I - Financial Information
Page
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 2001 (unaudited)
and December 31, 2000.......................................3
Consolidated Statements of Operations (unaudited) for the
three months ended March 31, 2001 and March 31, 2000........4
Consolidated Statements of Cash Flows (unaudited) for the
three months ended March 31, 2001 and March 31, 2000........5
Consolidated Statements of Comprehensive Income (unaudited)
for the three months ended March 31, 2001 and
March 31 30, 2000...........................................6
Notes to Consolidated Financial Statements (unaudited).............7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...........................................8
Item 3. Quantitative and Qualitative Disclosures About Market Risk.........12
Part II - Other Information
Item 1. Legal Proceedings.................................................13
Item 2. Changes in Securities and Use of Proceeds.........................13
Item 3. Defaults Upon Senior Securities...................................13
Item 4. Submission of Matters to a Vote of Security Holders...............13
Item 5. Other Information.................................................13
Item 6. Exhibits and Reports on Form 8-K..................................13
Signature................................................14
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FIRST LOOK MEDIA, INC.
(formerly known as Overseas Filmgroup, Inc.)
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
2001 2000
---- ----
(Unaudited)
(in thousands)
ASSETS:
Cash and cash equivalents $ 173 $ 832
Accounts receivable, net of allowance for doubtful
accounts of $1,100,000 28,070 26,583
Film costs, net of accumulated amortization 13,163 13,393
Other assets 1,473 1,472
-------- --------
Total assets $ 42,879 $ 42,280
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Accounts payable and accrued expenses $ 1,376 $ 1,411
Accrued interest payable 15 174
Deferred revenue 134 87
Payable to producers 23,779 23,587
Notes payable 7,541 7,116
-------- --------
Total liabilities 32,845 32,375
-------- --------
Shareholders' equity:
Preferred stock, $.001 par value, 10,000,000 shares
authorized; 904,971 shares issued
and outstanding (Liquidation preference of
$3,846,271) 1 1
Common stock, $.001 par value, 50,000,000 shares
authorized; 9,848,906 shares issued;
9,803,906 shares outstanding 10 10
Additional paid in capital 30,675 30,675
Accumulated deficit (20,565) (20,694)
Treasury stock at cost, 45,000 shares (87) (87)
-------- --------
Total shareholders' equity 10,034 9,905
-------- --------
Total liabilities and shareholders' equity $ 42,879 $ 42,280
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
3
FIRST LOOK MEDIA, INC.
(formerly known as Overseas Filmgroup, Inc.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended March 31,
2001 2000
---- ----
(in thousands except per
share amounts)
Revenues $ 10,243 $ 6,049
Expenses:
Film costs 7,361 4,112
Distribution and marketing 892 1,164
Selling, general and administrative 1,657 793
-------- --------
Total expenses 9,910 6,069
-------- --------
Income (loss) from operations 333 (20)
-------- --------
Other income (expense):
Interest income 3 -
Interest expense (257) (519)
Other income 66 54
-------- --------
Total other expense (188) (465)
-------- --------
Income (loss) before income taxes and
cumulative effect of accounting changes 145 (485)
Income tax provision 16 73
-------- --------
Income (loss) before cumulative effect of
accounting changes 129 (558)
Cumulative effect of accounting changes
(net of income taxes) - (14,123)
-------- --------
Net income (loss) $ 129 $(14,681)
======== ========
Basic and diluted income (loss) per share:
Income (loss) before cumulative effect of
accounting changes $ 0.01 $ (0.09)
Cumulative effect - (2.24)
-------- --------
Net income (loss) $ 0.01 $ (2.33)
======== ========
Weighted average number of common shares outstanding 9,804 6,295
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
4
FIRST LOOK MEDIA, INC.
(formerly known as Overseas Filmgroup, Inc.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended March 31,
2001 2000
---- ----
(in thousands)
Cash flows from operating activities:
Net income (loss) $ 129 $(14,681)
Adjustments to reconcile net income (loss) to net
cash (used in) provided by operating activities:
Cumulative effect of accounting changes - 15,582
Film cost amortization 7,361 4,112
Additions to film costs (632) (538)
Payment to producers (6,309) (3,254)
Change in assets and liabilities:
Accounts receivable (1,487) 698
Other assets 1 (258)
Accounts payable and accrued expenses (194) 417
Deferred income taxes - (1,459)
Deferred revenue 47 24
-------- --------
Net cash (used in) provided by operating activities (1,084) 643
-------- --------
Cash flows from financing activities:
Net borrowings (pay down) under credit facility 500 (852)
Net pay down of subordinated note payable (75) -
Net pay down of note payable to related party - (62)
Restricted cash position - 7
-------- --------
Net cash provided by (used in) financing activities 425 (907)
-------- --------
Net decrease in cash and cash equivalents (659) (264)
Cash, cash equivalents at beginning of period 832 270
-------- --------
Cash, cash equivalents at end of period $ 173 $ 6
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 433 $ 492
======== ========
Income taxes $ 6 $ 6
======== ========
Foreign withholding taxes $ 10 $ 66
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
5
FIRST LOOK MEDIA, INC.
(formerly known as Overseas Filmgroup, Inc.)
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended March 31,
2001 2000
---- ----
(in thousands)
Net income (loss) $ 129 $ (14,681)
Unrealized holding loss on investment
available-for-sale - (488)
---------- -----------
$ 129 $ (15,169)
========== ===========
The accompanying notes are an integral part of these consolidated financial
statements
6
FIRST LOOK MEDIA, INC.
(formerly known as Overseas Filmgroup, Inc.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited consolidated financial statements of First
Look Media, Inc. (formerly known as Overseas Filmgroup, Inc.) (the
"Company") have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Rule 10-01 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting only of normal
recurring adjustments) considered necessary for a fair presentation have
been reflected in these consolidated financial statements. Operating
results for the three months ended March 31, 2001 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 2001. Certain reclassifications have been made in the 2000
consolidated financial statements to conform to the 2001 presentation.
For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 2000 (the "2000 Consolidated
Financial Statements").
2. Film costs consist of the following:
March December
31, 2001 31, 2000
--------- --------
(in thousands)
Film costs in release net of accumulated
amortization $ 11,012 $ 11,702
Film costs not yet available for release 2,151 1,691
---------- ----------
$ 13,163 $ 13,393
========== ==========
3. In June 2000, the Accounting Standards Executive Committee of the
American Institute of Certified Public Accountants issued Statement of
Position 00-2, "Accounting by Producers or Distributors of Films" ("SOP
00-2"). SOP 00-2 establishes new accounting standards for producers or
distributors of films, including changes in revenue recognition and
accounting for advertising, development and overhead costs. Additionally,
in June 2000, the Financial Accounting Standards Board ("FASB") issued
Statement 139 ("SFAS 139") which rescinds FASB 53 on financial reporting
by motion picture film producers or distributors. SFAS 139 requires
public companies to follow the guidance provided by SOP 00-2. The Company
has elected early adoption of SOP 00-2 and, as a result, in the fiscal
quarter ended June 30, 2000 recorded a one-time, pre-tax non-cash charge
of $15,582,000 ($14,123,000 net of income taxes). This charge has been
reflected in the Company's Consolidated Statements of Operations as a
cumulative effect of accounting changes, effective January 1, 2000.
7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This Quarterly Report on Form 10-Q contains "forward-looking statements",
including those within the meaning of the Private Securities Litigation Reform
Act of 1995. These statements may consist of any statement other than a
recitation of historical fact and can be identified by the use of
forward-looking terminology such as "may," "expect", "anticipate", "estimate",
"intend" or "continue" or the negative thereof or other variations thereon or
comparable terminology. Please note that all forward-looking statements are
necessarily speculative and there are risks and uncertainties that could cause
actual events or results to differ materially from those referred to in such
forward-looking statements. These risks and uncertainties include, among other
things, the highly speculative and inherently risky and competitive nature of
the motion picture industry. There can be no assurance of the economic success
of any motion picture since the revenues derived from the production and
distribution of a motion picture (which do not necessarily bear a direct
correlation to the production or distribution costs incurred) depend primarily
upon its acceptance by the public, which cannot be predicted. The commercial
success of a motion picture also depends upon the quality and acceptance of
other competing films released into the marketplace at or near the same time,
the availability of alternative forms of entertainment and leisure time
activities, general economic conditions and other tangible and intangible
factors, all of which can change and cannot be predicted with certainty.
Therefore, there is a substantial risk that some or all of the motion pictures
released, distributed, financed or produced by the Company will not be
commercially successful, resulting in costs not being recouped or anticipated
profits not being realized. The Company's results of operations for the period
ended March 31, 2001 are not necessarily indicative of the results that may be
expected in future periods. Due to quarterly fluctuations in the number of
motion pictures in which the Company controls the distribution rights and which
become available for distribution (and thus, for which revenue can first be
recognized) and the number of motion pictures distributed by the Company, as
well as the unpredictable nature of audience and sub-distributor response to
motion pictures distributed by the Company, the Company's revenues, expenses and
earnings fluctuate significantly from quarter to quarter and from year to year.
In addition, for several reasons, including (i) the likelihood of continued
industry-wide increases in acquisition, production and marketing costs and (ii)
the Company's intent, based upon its ongoing strategy, to acquire rights to or
produce films which have greater production values (often as a result of larger
budgets), the Company's costs and expenses, and thus the capital required by the
Company in its operations and the associated risks may increase in the future.
Additional risks and uncertainties are discussed elsewhere in appropriate
sections of this report and in other filings made by the Company with the
Securities and Exchange Commission, including the Company's Annual Report on
Form 10-K for its fiscal year ended December 31, 2000. The risks highlighted
above and elsewhere in this report should not be assumed to be the only things
that could affect future performance of the Company. The Company does not have a
policy of updating or revising forward-looking statements and thus it should not
be assumed that silence by management of the Company over time means that actual
events are bearing out as estimated in such forward-looking statements.
General
The operations of Overseas Filmgroup, Inc., a privately held Delaware
corporation ("Overseas Private"), were established in February 1980. The Company
was formed in December 1993 under the name "Entertainment/Media Acquisition
Corporation" for the purpose of acquiring an operating business in the
entertainment and media industry. The Company acquired Overseas Private through
a merger in October 1996 and the Company was the surviving corporation in the
merger. Immediately following the merger, the Company changed its name to
"Overseas Filmgroup, Inc." and succeeded to the operations of Overseas Private.
In January 2001, the Company changed its name to "First Look Media, Inc." in
order to reflect the broadening of its operations beyond foreign distribution of
independently produced feature films to additional areas such as theatrical and
video distribution in the United States, television commercial production and
Internet content development.
8
Today, the Company is principally involved in the acquisition and
worldwide license or sale of distribution rights to independently produced
motion pictures. The Company directly distributes certain motion pictures in the
domestic theatrical market under the name "First Look Pictures" and in the
domestic video market under the name "First Look Home Entertainment."
Results of operations
Three Months Ended March 31, 2001 Compared to Three Months Ended March 31, 2000
Revenues increased by $4,194,000 (69.3%) to $10,243,000 for the three
months ended March 31, 2001 from $6,049,000 for the months ended March 31, 2000.
The increase was primarily due to increases in revenues from airlines of
$575,000, U.S. video releases of $388,000 and a greater number of films
generating revenues during the first quarter of 2001 compared to the first
quarter of 2000.
Film costs as a percentage of revenues increased to 71.9% for the three
months ended March 31, 2001 compared to 68.0% for the three months ended March
31, 2000. Film costs include amortization of capitalized production and
acquisition costs as well as current period participation cost accruals. The
increase in film costs as a percentage of revenues for the three months ended
March 31, 2001 compared to three months ended March 31, 2000 was primarily due
to an increase in revenues from those films with higher capitalized production
and acquisition costs and generally lower margins from films generating higher
revenues. Distribution and marketing expenses as a percentage of revenues
decreased to 8.7% for the three months ended March 31, 2001 compared to 19.2%
for the three months ended March 31, 2000. In accordance with the new accounting
standards established pursuant to SOP 00-2, the Company expenses all
distribution and marketing expenses as incurred. The Company incurred $892,000
of distribution and marketing expenses during the three months ended March 31,
2001 compared to $1,164,000 during the three months ended March 31, 2000, a
decrease of $272,000, or 23.4%.
Selling, general and administrative expenses, net of amounts
capitalized to film costs, increased by $864,000 (109.0%) to $1,657,000 for the
three months ended March 31, 2001 from $793,000 for the three months ended March
31, 2000. The Company capitalizes some of its overhead costs incurred in
connection with its production activities related to a motion picture by adding
the costs to the capitalized film costs of the motion picture. The increase in
selling, general and administrative expenses was primarily as a result of
increases in
o salary, payroll taxes and related expenses of $522,000 due to
additional personnel,
o legal and consulting fees of $90,000,
o bad debt expense of $52,000,
o insurance expense of $26,000,
o publicity expense of $33,000,
o computer supplies of $24,000 and
o lower overhead capitalization of $118,000 due to the Company's
reduced involvement in production related activities.
Net other expense was $188,000 for the quarter ended March 31, 2001
compared to $465,000 for the quarter ended March 31, 2000. The decrease was
primarily due to decreased interest expense of $262,000 as a result of lower
outstanding notes payable during the quarter ended March 31, 2001 ($7,541,000)
compared to the quarter ended March 31, 2000 ($20,839,000).
As a result of the above, the Company had income before income taxes and
cumulative effect of accounting changes of $145,000 for the quarter ended March
31, 2001, compared to a loss before income taxes and cumulative effect of
accounting changes of $485,000 for the quarter ended March 31, 2000.
9
The Company reported a cumulative effect of accounting changes of
$14,123,000, net of income tax benefit of $1,459,000 for the quarter ended March
31, 2000, relating to its adoption of SOP 00-2.
The Company had net income of $129,000 for the quarter ended March 31,
2001 (reflecting foreign withholding taxes and state taxes of $16,000), compared
to a net loss of $14,681,000 for the quarter ended March 31, 2000.
Liquidity and Capital Resources
The Company requires substantial capital for the acquisition of film
rights, the funding of distribution costs and expenses, the payment of ongoing
overhead costs and the repayment of debt. The principal sources of funds for the
Company's operations have been cash flow from operations, bank borrowings and
equity financings.
June 2000 Private Placement
In June 2000, the Company consummated a private placement with Rosemary
Street Productions, LLC ("Rosemary Street"), in which the Company sold to
Rosemary Street for an aggregate cash purchase price of $17,000,000:
o 5,097,413 shares of common stock;
o 904,971 shares of Series A preferred stock, each share of which is
convertible into two shares of common stock and votes with the
common stock on an as-converted basis; and
o five-year warrants to purchase up to 2,313,810 shares of common
stock at an exercise price of $3.40 per share.
As of March 31, 2001, Rosemary Street owned approximately 53.5% of the Company's
voting securities.
Chase Facility
Concurrently with the consummation of the June 2000 private placement
with Rosemary Street, the Company entered into a $40 million credit facility (of
which $33 million has been committed) with The Chase Manhattan Bank and other
commercial banks and financial institutions. A portion of the proceeds from this
new credit facility was used to refinance outstanding loans and accrued interest
under the Company's previous credit facility with Coutts & Co. and
Bankgesellschaft Berlin A.G. The remaining proceeds will be available to finance
the Company's production, acquisition, distribution and exploitation of feature
length motion pictures, television programming, video product and rights and for
working capital and general corporate purposes, including the Company's
expansion into television commercial production.
Under the Chase facility, the Company borrows funds through loans
evidenced by promissory notes. The loans are made available through a revolving
line of credit which may be reduced, partially or in whole, at any time and is
to be fully paid on June 20, 2005. The Chase facility also provides for letters
of credit to be issued from time to time upon the Company's request. At March
31, 2001, the Company had borrowed an aggregate of $7,000,000 under the Chase
facility.
The amounts drawn down under the Chase facility bear interest, as the
Company may select, at rates based on either LIBOR plus 2% or a rate per annum
equal to the greater of (a) the Prime Rate plus 1%, (b) the Base CD Rate plus 2%
and (c) the Federal Funds Effective Rate plus 1.5% (as these terms are defined
in the credit agreement). In addition to an annual management fee of $125,000,
the Company pays a commitment fee on the daily average unused portion of the
Chase facility at an annual rate of 0.5%. Upon entering the Chase facility, the
10
Company was required to pay a one-time fee of approximately $848,000. The Chase
facility also restricts the creation or incurrence of indebtedness of additional
securities. The Chase facility is collateralized by all tangible and intangible
assets and future revenues of the Company.
In May 2001, the Company entered into an amendment to the Chase facility,
pursuant to which the requisite lenders agreed, effective as of the date of the
amendment, to:
o permit the Company to obtain financing for one film from another
lender;
o increase the Company's overhead allowance from $5 million to $7.25
million; and
o reduce the minimum level of Consolidated Net Worth (as defined in
the credit agreement) that the Company is required to maintain
from $28 million to $22 million.
Other Loans
In addition to the amounts outstanding under the Chase facility, during
1998 the Company borrowed $2,000,000 from another lender, the proceeds of such
loan were used to acquire rights to a particular film. This subordinated note
bears interest at the Prime Rate plus 1.5% and is collateralized by amounts due
under distribution agreements from the specific film. The subordinated note
matures on May 29, 2001. As of March 31, 2001, $543,000 (including interest
accrued thereon) was outstanding under the subordinated note.
Note and Debt Contributions
Concurrently with the June 2000 private placement with Rosemary Street,
the Company entered into a note and debt contribution agreement with Robert B.
Little and Ellen Dinerman Little (collectively, the "Littles"). Pursuant to the
agreement, the Littles forgave:
o $1,339,037 of aggregate outstanding principal amount and $480,709
of accrued but unpaid interest on a note issued by the Company to
the Littles as part of the consideration given relating to the
merger of the Company with Overseas Private in October 1996;
o $78,101 of accrued and unpaid interest on loans in the aggregate
principal amount of $400,000 ("P&A Loans") made by the Littles to
the Company in December 1997 and February 1998, which were used to
provide a portion of the funds required by the Company for the
print and advertising costs associated with the domestic
theatrical release of Mrs. Dalloway; and
o $125,131 of accrued salaries that the Company owed to them.
The Littles also contributed $130,000 in cash and 1,588,812 of their shares of
the Company's common stock to the Company's capital and the Company paid the
Littles $1,430,000 calculated as:
o $135,476 for various reimbursable expenses as provided in their
employment agreements with the Company;
o $130,000 of the remaining principal balance on the note issued in
connection with the Company's merger with Overseas Private;
o $400,000 representing the aggregate principal amount owed by the
Company to the Littles under the P&A Loans;
o $564,524 of accrued salaries; and
o $200,000 representing the amount owed by the Company to the
Littles under a tax reimbursement agreement between the Company
and the Littles entered into in connection with the Company's
merger with Overseas Private.
11
Yahoo! Stock Sale
In July and September 2000, the Company sold for approximately $2,056,000
all 17,454 shares of common stock of Yahoo!, Inc. that the Company received in
July 1999 as part of a share-for-share exchange with broadcast.com, which was
subsequently acquired by Yahoo!, Inc.
Resources
At March 31, 2001, the Company had cash and cash equivalents of $173,000,
compared to cash and cash equivalents of $832,000 as of December 31, 2000.
Additionally, as of March 31, 2001, the Company had deferred revenue relating to
distribution commitments and guarantees from sub-distributors of approximately
$134,000. At March 31, 2001, $7,983,000 was available for the Company to draw
down under the Chase facility.
The Company believes that its existing capital, funds from the Chase
facility, funds from its operations and other available sources of capital will
be sufficient to fund its operations for at least the next twelve months.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to market risk related to changes in interest
rates. The Company does not use derivative financial instruments. Because very
few of the Company's revenues are denominated in foreign currency, the Company
does not believe there is a significant risk imposed on the Company due to the
fluctuations in foreign currency exchange rates. The table below provides
information about the Company's debt obligations as of March 31, 2001, including
principal cash flows and related weighted average interest rates by expected
maturity dates:
Expected Maturity Date
----------------------
(in thousands)
Liabilities 2001 2002 2003 2004 2005 Thereafter
----------- ---- ---- ---- ---- ---- ----------
Variable rate:
Chase Credit Facility $ 7,000
Average interest rate 8.0% 8.0% 8.0% 8.0% 8.0%
Subordinated note payable $ 541
Average interest rate 9.5%
12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is engaged in legal proceedings incidental to its normal
business activities. In the opinion of management, none of these proceedings are
material in relation to the Company's financial position.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
During the three months ended March 31, 2001, the Company did not make
any sales of unregistered securities.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.28 Amendment No. 1, dated May 16, 2001 to the Credit, Security,
Guaranty and Pledge Agreement, dated as of June 20, 2000, among
the Company, as Borrower, the Guarantors named therein and the
Lenders named therein, with The Chase Manhattan Bank, as
Administrative Agent, and the Chase Manhattan Bank, as Issuing
Bank.
(b) Reports on Form 8-K
None
13
SIGNATURE
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.
May 21, 2001
FIRST LOOK MEDIA, INC.
By: /s/ William F. Lischak
---------------------------------
William F. Lischak
Chief Financial Officer, Chief
Operating Officer and Secretary
EXHIBIT INDEX
Exhibit
Number Description
-------- ------------
10.28 Amendment No. 1, dated May 16, 2001 to the Credit, Security,
Guaranty and Pledge Agreement, dated as of June 20, 2000, among
the Company, as Borrower, the Guarantors named therein and the
Lenders named therein, with The Chase Manhattan Bank, as
Administrative Agent, and the Chase Manhattan Bank, as Issuing
Bank.