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December 30, 1993 (the working capital agreement). The working
capital agreement provided for payment of interest on the amounts
that Credit Lyonnais had previously lent to MGM. These amounts
became due on July 15, 1997. New MGM executed a $490 million
note dated December 30, 1993. In connection with the working
capital agreement and the New MGM credit agreement, MGM Group
Holdings pledged its New MGM stock, as well as New MGM’s film and
other assets, to Credit Lyonnais.
CLBN advanced $8,994,970.32 in additional funds to MGM Group
Holdings pursuant to a demand promissory note (CLBN demand note)
and an irrevocable notice of drawing, both dated October 26,
1994. On April 26, 1995, MGM Group Holdings made an additional
drawing of $595,750.56 under the CLBN demand note. In all, CLBN
advanced a total of $9,590,720.88 in additional funds to MGM
Group Holdings.
H. Carolco Pictures, Inc.
In 1993, Credit Lyonnais, using MGM as a vehicle, made an
investment in Carolco Pictures, Inc. (Carolco), and sought to
take an active role in that company’s operations. Carolco had
been a major motion picture producer, producing some of the
highest revenue-grossing motion pictures ever made, including
“Terminator 2: Judgment Day”, “Total Recall”, “Cliffhanger”,
“Basic Instinct”, and “Rambo: First Blood Part II”. Carolco
initially produced four to six major motion pictures a year but,
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