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EXHIBIT 10.4
GUARANTY
This GUARANTY is entered into as of September 30, 1996,
by SPELLING ENTERTAINMENT GROUP INC.("SEGI"), SPELLING ENTERTAINMENT INC.
("SEI"), ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRODUCTIONS, INC. ("ASP"), SPELLING FILMS
INC.("SFI"), SPELLING TELEVISION INC. ("STI"), TORAND PRODUCTIONS INC.
("TPI"), WORLDVISION ENTERPRISES, INC. ("WORLDVISION"),
LAUREL ENTERTAINMENT, INC. ("LAUREL"), ▇▇▇▇▇▇▇▇ PROJECTS, INC.
("▇▇▇▇▇▇▇▇"), REPUBLIC ENTERTAINMENT INC. ("RPI"), REPUBLIC DISTRIBUTION
CORPORATION ("RDC"), WILSHIRE ENTERTAINMENT INC. ("WILSHIRE"), SPELLING
SATELLITE NETWORKS INC.("SSNI"), BIG TICKET TELEVISION INC. ("BIG
TICKET"), VIE HOLDING COMPANY ("VIE HOLDING"), WESTWOOD STUDIOS, INC.
("WESTWOOD"), VIRGIN INTERACTIVE ENTERTAINMENT, INC. ("VIE") and the
other present and future subsidiaries of SEGI that are from time to time
party hereto (the "OTHER SUBSIDIARIES") (SEGI, SEI, ASP, SFI, STI, TPI,
Worldvision, Laurel, ▇▇▇▇▇▇▇▇, RPI, RDC, Wilshire, SSNI, Big Ticket, VIE
Holding, Westwood, VIE and any other present and future subsidiary of
SEGI which becomes a borrower under the Credit Agreement (as hereinafter
defined) are sometimes individually referred to herein as a "GUARANTOR"
and collectively as "GUARANTORS") and VIACOM INC., a Delaware corporation
("LENDER").
RECITALS
A. SEGI, SEI, ASP, SFI, STI, TPI, Worldvision,
Laurel, ▇▇▇▇▇▇▇▇, RPI, RDC, Wilshire, SSNI, Big Ticket, VIE Holding,
Westwood, and VIE (individually a "BORROWER" and collectively the
"BORROWERS"; as used herein the terms "Borrower" and "Borrowers" shall also
include any present or future subsidiary(ies) of SEGI that hereinafter
becomes a Borrower under the Credit Agreement (as hereinafter defined)
pursuant to the terms thereof) and Lender have entered into a
Credit Agreement dated as of September 30, 1996 (said Credit Agreement, as
it may hereafter be amended, supplemented or otherwise modified from time
to time including, without limitation, by the joinder of additional present
or future subsidiaries of SEGI as borrowers thereunder, being the "Credit
Agreement"; capitalized terms used herein without definition shall have
the meanings assigned those terms in the Credit Agreement);
B. Lender is willing to extend credit facilities to
Borrowers on a joint and several basis as provided in the Credit
Agreement, upon the condition that Borrowers' Credit Obligations thereunder
and under the other Credit Documents be guaranteed by Guarantors, as set
forth below.
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C. A portion of the proceeds of the Loans may be advanced to
Guarantors and thus the Guarantied Obligations (as hereinafter defined) are
being incurred for and will inure to the benefit of Guarantors (which benefits
are hereby acknowledged).
D. In order to induce Lender to make Loans under the Credit
Agreement, the Guarantors have agreed to guaranty each Borrower's Credit
Obligations thereunder and under the other Credit Documents.
E. Guarantors are willing irrevocably and unconditionally to
guaranty such obligations of Borrowers.
NOW, THEREFORE, based upon the foregoing and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantors hereby agree as follows:
SECTION 1. DEFINITION.
1.1 CERTAIN DEFINED TERMS. As used in this Guaranty, the following terms
shall have the following meanings unless the context otherwise requires:
"GUARANTIED OBLIGATIONS" has the meaning assigned to that term in
subsection 2.1.
"GUARANTY" means this Guaranty dated as of September 30, 1996, as it
may be amended, supplemented or otherwise modified from time to time.
"PAYMENT IN FULL", "PAID IN FULL" or any similar term means payment
in full of the Guarantied Obligations including, without limitation, all
principal, interest, costs, fees and expenses (including, without
limitation, legal fees and expenses) of Lender as required under the Credit
Documents.
1.2 INTERPRETATION.
(a) References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Guaranty unless otherwise
specifically provided.
(b) In the event of any conflict or inconsistency between the terms,
conditions and provisions of this Guaranty and the terms, conditions and
provisions of the Credit Agreement, the terms, conditions and provisions
of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
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2.1 GUARANTY OF THE GUARANTIED OBLIGATIONS. Subject to the
provisions of subsection 2.2(a), Guarantors jointly and severally
hereby irrevocably and unconditionally guaranty, as primary obligors
and not merely as sureties, the due and punctual payment in full of all
Guarantied Obligations when the same shall become due, whether at
stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, 11 U.S.C. Section 362(a)). The term "GUARANTIED
OBLIGATIONS" is used herein in its most comprehensive sense and
includes:
(a) any and all Credit Obligations now or hereafter made,
incurred or created, whether absolute or contingent, liquidated
or unliquidated, whether due or not due, and however arising under
or in connection with the Credit Agreement and the other Credit
Documents, including those arising under successive borrowing
transactions under the Credit Agreement which shall either
continue the Credit Obligations or from time to time renew them
after they have been satisfied; and
(b) those expenses set forth in subsection 2.9 hereof.
2.2 LIMITATION ON AMOUNT GUARANTIED; CONTRIBUTION BY GUARANTORS.
(a) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder
(other than the obligations of SEGI hereunder) shall be limited to
a maximum aggregate amount equal to the largest amount that would
not render its obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of Title 11 of
the United States Code or any applicable provisions of comparable
state law (collectively, the "FRAUDULENT TRANSFER LAW") in each
case after giving effect to all other liabilities of such
Guarantor, contingent or otherwise, that are relevant under the
Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of such Guarantor (x) in respect of intercompany
indebtedness to Borrowers or other affiliates of Borrowers to the
extent that such indebtedness would be discharged in an amount
equal to the amount paid by such Guarantor hereunder and (y) under
any guaranty of Indebtedness which by its terms is subordinated to
the Credit Obligations and which guaranty contains a limitation as
to maximum amount similar to that set forth in this subsection
2.2(a), pursuant to which the liability of such Guarantor
hereunder is included in the liabilities taken into account in
determining such maximum amount) and after giving effect as assets
to the value (as determined under the applicable provisions of the
Fraudulent Transfer Laws) of any rights to subrogation,
reimbursement or contribution of such Guarantor pursuant to (i)
applicable law or (ii) any agreement providing for an equitable
allocation among such Guarantor and other affiliates of Borrowers
of obligations arising under guaranties by such parties.
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(b) Guarantors under this Guaranty together desire to allocate
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair
and equitable manner, their obligations arising under this Guaranty.
Accordingly, in the event any payment or distribution is made on any date by
any Guarantor under this Guaranty (a "FUNDING GUARANTOR") that exceeds its
Fair Share (as defined below) as of such date, that Funding Guarantor shall
be entitled to a contribution from each of the other Contributing Guarantors
in the amount of such other Contributing Guarantor's Fair Share Shortfall
(as defined below) as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments
(as defined below) to equal its Fair Share as of such date. "FAIR SHARE"
means, with respect to a Contributing Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the Adjusted Maximum
Amount (as defined below) with respect to such Contributing Guarantor to (y)
the aggregate of the Adjusted Maximum Amounts with respect to all
Contributing Guarantors, multiplied by (ii) the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under this
Guaranty in respect of the obligations guarantied. "FAIR SHARE SHORTFALL"
means, with respect to a Contributing Guarantor as of any date of
determination, the excess, if any, of the Fair Share of such Contributing
Guarantor over the Aggregate Payments of such Contributing Guarantor.
"ADJUSTED MAXIMUM AMOUNT" means, with respect to a Contributing Guarantor as
of any date of determination, the maximum aggregate amount of the
obligations of such Contributing Guarantor under this Guaranty, determined
as of such date in accordance with subsection 2.2(a); provided that, solely
for purposes of calculating the "ADJUSTED MAXIMUM AMOUNT" with respect to
any Contributing Guarantor for purposes of this subsection 2.2(b), any
assets or liabilities of such Contributing Guarantor arising by virtue of
any rights to subrogation or reimbursement or any rights to or obligations
of contribution hereunder shall not be considered as assets or liabilities
of such Contributing Guarantor. "AGGREGATE PAYMENTS" means, with respect to
a Contributing Guarantor as of any date of determination, an amount equal to
(i) the aggregate amount of all payments and distributions made on or before
such date by such Contributing Guarantor in respect of this Guaranty
(including, without limitation, in respect of this subsection 2.2(b) minus
(ii) the aggregate amount of all payments received on or before such date by
such Contributing Guarantor from the other Contributing Guarantors as
contributions under this subsection 2.2(b). The amounts payable as
contributions hereunder shall be determined as of the date on which the
related payment or distribution is made by the applicable Funding Guarantor.
The allocation among Contributing Guarantors of their obligations as set
forth in this subsection 2.2(b) shall not be construed in any way to limit
the liability of any Contributing Guarantor hereunder.
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2.3 LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees
that its obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which
constitutes a legal or equitable discharge of a guarantor or surety other
than indefeasible payment in full of the Guarantied Obligations. In
furtherance of the foregoing and without limiting the generality thereof,
each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment when due
and not of collectibility.
(b) Lender may enforce this Guaranty upon the
occurrence of an Event of Default under the Credit Agreement
notwithstanding the existence of any dispute between Lender and
Borrowers with respect to the existence of such Event of Default.
(c) The obligations of each Guarantor hereunder are
independent of the obligations of Borrowers under the Credit
Documents and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrowers under the
Credit Documents, and a separate action or actions may be brought
and prosecuted against such Guarantor whether or not any action is
brought against Borrowers, or any of them, or any of such other
guarantors and whether or not Borrowers are joined in any such
action or actions.
(d) Payment by any Guarantor of a portion, but not
all, of the Guarantied Obligations shall in no way limit, affect,
modify or abridge any Guarantor's liability for any portion of the
Guarantied Obligations which has not been paid. Without limiting
the generality of the foregoing, if Lender is awarded a judgment
in any suit brought to enforce any Guarantor's covenant to pay a
portion of the Guarantied Obligations, such judgment shall not be
deemed to release such Guarantor from its covenant to pay the
portion of the Guarantied Obligations that is not the subject of
such suit, and such judgment shall not, except to the extent
satisfied by such Guarantor, limit, affect, modify or abridge any
other Guarantor's liability hereunder in respect of the Guarantied
Obligations.
(e) Lender, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of any
Guarantor's liability hereunder, from time to time may (i) renew,
extend, accelerate, increase the rate of interest on, or otherwise
change the time, place, manner or terms of payment of the
Guarantied Obligations, (ii) settle, compromise, release or
discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Guarantied Obligations or
any agreement relating thereto and/or subordinate the payment of
the same to the payment of any other obligations; (iii) request
and accept other guaranties of the Guarantied Obligations and take
and hold
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security for the payment of this Guaranty or the Guarantied Obligations;
(iv) release, surrender, exchange, substitute, compromise, settle, rescind,
waive, alter, subordinate or modify, with or without consideration, any
security for payment of the Guarantied Obligations, any other guaranties of
the Guarantied Obligations, or any other obligation of any Person (including
any other Guarantor) with respect to the Guarantied Obligations; (v) enforce
and apply any security now or hereafter held by or for the benefit of Lender
in respect of this Guaranty or the Guarantied Obligations and direct the
order or manner of sale thereof, or exercise any other right or remedy that
Lender may have against any such security, as Lender in its discretion may
determine consistent with the Credit Agreement and any applicable security
agreement, including foreclosure on any such security pursuant to one or
more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, and even though such action operates to
impair or extinguish any right of reimbursement or subrogation or other
right or remedy of any Guarantor against Borrowers, or any of them, or any
security for the Guarantied Obligations; and (vi) exercise any other rights
available to it under the Credit Documents.
(f) This Guaranty and the obligations of Guarantors
hereunder shall be valid and enforceable and shall not be subject to any
reduction, limitation, impairment, discharge or termination for any reason
(other than indefeasible payment in full of the Guarantied Obligations),
including without limitation the occurrence of any of the following, whether
or not any Guarantor shall have had notice or knowledge of any of them: (i)
any failure or omission to assert or enforce or agreement or election not to
assert or enforce, or the stay or enjoining, by order of court, by operation
of law or otherwise, of the exercise or enforcement of, any claim or demand
or any right, power or remedy (whether arising under the Credit Documents,
at law, in equity or otherwise) with respect to the Guarantied Obligations
or any agreement relating thereto, or with respect to any other guaranty of
or security for the payment of the Guarantied Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to
departure from, any of the terms or provisions (including without limitation
provisions relating to events of default) of the Credit Agreement, any of
the other Credit Documents or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Guarantied
Obligations, in each case whether or not in accordance with the terms of the
Credit Agreement or such Credit Document or any agreement relating to such
other guaranty or security; (iii) the Guarantied Obligations, or any
agreement relating thereto, at any time being found to be illegal, invalid
or unenforceable in any respect; (iv) the application of payments received
from any source (other than payments received pursuant to the other Credit
Documents or from the proceeds of any security for the Guarantied
Obligations, except to the extent such security also serves as collateral
for indebtedness other than the Guarantied Obligations) to the payment of
indebtedness other than the Guarantied Obligations, even though Lender might
have
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elected to apply such payment to any part or all of the Guarantied
Obligations; (v) Lender's consent to the change, reorganization or
termination of the corporate structure or existence of SEGI or any
of its Subsidiaries and to any corresponding restructuring of the
Guarantied Obligations; (vi) any failure to perfect or continue
perfection of a security interest in any collateral which secures
any of the Guarantied Obligations; (vii) any defenses, set-offs or
counterclaims which Borrowers, or any of them, may allege or
assert against Lender in respect of the Guarantied Obligations,
including but not limited to failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations,
accord and satisfaction and usury; and (viii) any other act or
thing or omission, or delay to do any other act or thing, which
may or might in any manner or to any extent vary the risk of any
Guarantor as an obligor in respect of the Guarantied Obligations.
2.4 WAIVERS-BY GUARANTORS. Each Guarantor hereby waives, for
the benefit of Lender:
(a) any right to require Lender, as a condition of
payment or performance by such Guarantor, to (i) proceed against
Borrowers, or any of them, any other guarantor (including any
other Guarantor) of the Guarantied Obligations or any other
Person, (ii) proceed against or exhaust any security held from
Borrowers, or any of them, any other guarantor (including any
other Guarantor) of the Guarantied Obligations or any other
Person, (iii) proceed against or have resort to any balance of any
deposit account or credit on the books of Lender in favor of
Borrowers, or any of them, or any other Person, or (iv) pursue any
other remedy in the power of Lender whatsoever;
(b) any defense arising by reason of the incapacity,
lack of authority or any disability or other defense of Borrowers,
or any of them, including, without limitation, any defense based
on or arising out of the lack of validity or the unenforceability
of the Guarantied Obligations or any agreement or instrument
relating thereto or by reason of the cessation of the liability of
Borrowers, or any of them, from any cause other than indefeasible
payment in full of the Guarantied Obligations:
(c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that
of the principal;
(d) any defense based upon Lender's errors or
omissions in the administration of the Guarantied Obligations,
except behavior which amounts to bad faith;
(e) (i) any principles or provisions of law,
statutory or otherwise, which are or might be in conflict with the
terms of this Guaranty and any legal or equitable
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discharge of such Guarantor's obligations hereunder, (ii) the benefit of any
statute of limitations affecting such Guarantor's liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any requirement that
Lender protect, secure, perfect or insure any security interest or lien or
any property subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under the Credit
Agreement or any agreement or instrument related thereto, notices of any
renewal, extension or modification of the Guarantied Obligations or any
agreement related thereto, notices of any extension of credit to the
Borrowers, or any of them, and notices of any of the matters referred to in
subsection 2.3 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms of this Guaranty, including
without limitation if and to the extent applicable, the provisions of
California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2846, 2849,
2850, 2899 and 3433.
2.5 PAYMENT BY GUARANTORS; APPLICATION OF PAYMENTS. Subject to the
provisions of subsection 2.2(a), Guarantors hereby jointly and severally agree,
in furtherance of the foregoing and not in limitation of any other right which
Lender or any other Person may have at law or in equity against any Guarantor
by virtue hereof, that upon the failure of Borrowers, or any of them, to pay
any of the Guarantied Obligations when and as the same shall become due,
whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including amounts that would become due but for the
operation of the automatic stay under Section 362(a) of the Bankruptcy Code, 11
U.S.C. Section 362(a) or the operation of any other provision of law or any
jurisdiction which would otherwise cause a stay of the payment of such
amounts), Guarantors will upon demand pay, or cause to be paid, in cash, to
Lender, an amount equal to the sum of the unpaid principal amount of all
Guarantied Obligations then due as aforesaid, accrued and unpaid interest on
such Guarantied Obligations (including, without limitation, interest which, but
for the filing of a petition in bankruptcy with respect to Borrowers, or any of
them, would have accrued on such Guarantied Obligations, whether or not a claim
is allowed against Borrowers, or any of them, for such interest in any such
bankruptcy proceeding) and all other Guarantied Obligations then owed to Lender
as aforesaid. All such payments shall be applied promptly from time to time by
Lender:
First, to the payment of the costs and expenses of any collection
or other realization under this Guaranty, including reasonable compensation
to Lender and its agents and counsel, and all expenses, liabilities and
advances made or incurred by Lender in connection therewith;
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Second, to the payment of all other Guarantied Obligations;
and
Third, after payment in full of all Guarantied Obligations,
to the payment to Guarantors, or their respective successors or
assigns, or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct, of any
surplus then remaining from such payments.
2.6 GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each
Guarantor hereby waives any claim, right or remedy, direct or indirect,
that such Guarantor now has or may hereafter have against Borrowers, or any
of them, or any of their assets in connection with this Guaranty or the
performance by such Guarantor of its obligations hereunder, in each case
whether such claim, right or remedy arises in equity, under contract, by
statute, under common law or otherwise and including without limitation (a)
any right of subrogation, reimbursement or indemnification that such
Guarantor now has or may hereafter have against any Borrower, (b) any right
to enforce, or to participate in, any claim, right or remedy that Lender
now has or may hereafter have against Borrowers, or any of them, and (c)
any benefit of, and any right to participate in, any collateral or security
now or hereafter held by Lender. In addition, until the Guarantied
Obligations shall have been indefeasibly paid in full and the Commitment
shall have terminated, each Guarantor shall withhold exercise of any right
of contribution such Guarantor may have against any other guarantor
(including any other Guarantor) of the Guarantied Obligations (including
without limitation any such right of contribution under subsection 2.2(b).
Each Guarantor further agrees that, to the extent the waiver or withholding
of its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may have
against Borrowers, or any of them, or against any collateral or security,
and any rights of contribution such Guarantor may have against any such
other guarantor, shall be junior and subordinate to any rights Lender may
have against Borrowers, or any of them, to all right, title and interest
Lender may have in any such collateral or security, and to any right Lender
may have against such other guarantor. Lender may use, sell or dispose of
any item of collateral or security as it sees fit without regard to any
subrogation rights any Guarantor may have, and upon any such disposition or
sale any rights of subrogation such Guarantor may have shall terminate. If
any amount shall be paid to any Guarantor on account of any such
subrogation, reimbursement or indemnification rights at any time when all
Guarantied Obligations shall not have been paid in full, such amount shall
be held in trust for Lender and shall forthwith be paid over to Lender to
be credited and applied against the Guarantied Obligations, whether matured
or unmatured, in accordance with the terms hereof.
2.7 SUBORDINATION OF OTHER OBLIGATIONS. Any indebtedness of
Borrowers, or any of them, now or hereafter held by any Guarantor is hereby
subordinated in right of payment to the Guarantied Obligations, and any
such indebtedness of Borrowers, or any of
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them, to such Guarantor collected or received by such Guarantor after an Event
of Default has occurred and is continuing shall be held in trust for Lender and
shall forthwith be paid over to Lender to be credited and applied against the
Guarantied Obligations but without affecting, impairing or limiting in any
manner the liability of such Guarantor under any other provision of this
Guaranty.
2.8 REAL PROPERTY-SECURITY. Each Guarantor agrees that, if all or a
portion of the Guarantied Obligations are at any time secured by a deed of
trust or mortgage covering interests in real property, Lender or its designee,
in its sole discretion, without notice or demand and without affecting the
liability of any Guarantor under this Guaranty, may foreclose, pursuant to the
terms of the Credit Documents or otherwise, on such deed of trust or mortgage
and the interests in real property secured thereby by nonjudicial or other
sale. Each Guarantor understands (i) that the exercise by Lender, or any of
them, of certain rights and remedies contained in the Credit Agreement and
Borrowers, or any of them, such deed of trust or mortgage, including the right
to conduct such a nonjudicial foreclosure sale, may affect or eliminate such
Guarantor's right of subrogation against Borrowers, or any of them, (ii) that
such Guarantor may therefore incur a partially or totally nonreimbursable
liability hereunder, and (iii) that such actions by Lender that affect or
eliminate such right of subrogation may give rise to a defense by such
Guarantor to any liability under this Guaranty, absent a waiver of such defense
by such Guarantor. Nevertheless, each Guarantor hereby waives any such defense
and hereby authorizes and empowers Lender to exercise, in its sole discretion,
any rights and remedies, or any combination thereof, which may then be
available, since it is the intent and purpose of each Guarantor that the
obligations hereunder shall be absolute, independent and unconditional under
any and all circumstances. To the extent permitted by law, without limiting
the generality of the foregoing, if and to the extent found applicable, each
Guarantor hereby expressly waives any and all benefits under California Code of
Civil Procedure Sections 580a, 580d and 726. Notwithstanding any foreclosure
of the lien of such deed of trust or mortgage with respect to any or all real
or personal property secured thereby, whether by the exercise of the power of
sale contained therein, by an action for judicial foreclosure or by an
acceptance of a deed in lieu of foreclosure, each Guarantor shall remain bound
under this Guaranty, including its obligation to pay any deficiency after a
nonjudicial foreclosure, even though such Guarantor may have no right of
subrogation against Borrowers, or any of them, as a result thereof.
2.9 EXPENSES. Guarantors jointly and severally agree to pay, or cause
to be paid, on demand, and to save Lender harmless against liability for, any
and all costs and expenses (including fees and disbursements of counsel and
allocated costs of internal counsel) incurred or expended by Lender in
connection with the enforcement of or preservation of any rights under this
Guaranty.
2.10 CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
shall remain in effect until all of the Guarantied Obligations shall have been
indefeasibly paid in full
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and the Commitment shall have terminated. Each Guarantor hereby
irrevocably waives any right (including without limitation if and to the
extent applicable, any such right arising under California Civil Code
Section 2815) to revoke this Guaranty as to future transactions giving rise
to any Guarantied Obligations.
2.11 AUTHORITY OF GUARANTORS OR BORROWERS. It is not necessary
for Lender to inquire into the capacity or powers of any Guarantor or any
Borrower or the officers, directors or any agents acting or purporting to
act on behalf of any of them.
2.12 FINANCIAL CONDITION OF BORROWERS. Any Loans may be
granted to Borrowers or continued from time to time without notice to or
authorization from any Guarantor regardless of the financial or other
condition of Borrowers, or any of them, at the time of any such grant or
continuation. Lender shall have no obligation to disclose or discuss with
any Guarantor their assessment, or any Guarantor's assessment, of
the financial condition of Borrowers, or any of them. Each Guarantor has
adequate means to obtain information from Borrowers on a continuing basis
concerning the financial condition of Borrowers and their ability to
perform their obligations under the Credit Documents, and each Guarantor
assumes the responsibility for being and keeping informed of the financial
condition of Borrowers and of all circumstances bearing upon the risk of
nonpayment of the Guarantied Obligations. Each Guarantor hereby waives
and relinquishes any duty on the part of Lender to disclose any matter,
fact or thing relating to the business, operations or conditions of
Borrowers, or any of them, now known or hereafter known by Agent or any
Lender.
2.13 RIGHTS CUMULATIVE. The rights, powers and remedies given
to Lender by this Guaranty are cumulative and shall be in addition to and
independent of all rights, powers and remedies given to Lender by virtue
of any statute or rule of law or in any of the other Credit Documents or
any agreement between any Guarantor and Lender between Borrowers, or any
of them, and Lender. Any forbearance or failure to exercise, and any
delay by Lender in exercising, any right, power or remedy hereunder shall
not impair any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
2.14 BANKRUPTCY: POST-PETITION INTEREST; REINSTATEMENT OF
GUARANTY.
(a) So long as any Guarantied Obligations remain
outstanding, no Guarantor shall, without the prior written
consent of Lender in accordance with the terms of the Credit
Agreement, commence or join with any other Person in commencing
any bankruptcy, reorganization or insolvency proceedings of or
against Borrowers, or any of them. The obligations of Guarantors
under this Guaranty shall not be reduced, limited, impaired,
discharged, deferred, suspended or terminated by any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency,
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receivership, reorganization, liquidation or arrangement of Borrowers, or
any of them, or by any defense which Borrowers, or any of them, may have by
reason of the order, decree or decision of any court or administrative body
resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on
any portion of the Guarantied Obligations which accrues after the
commencement of any proceeding referred to in clause (a) above (or, if
interest on any portion of the Guarantied Obligations ceases to accrue by
operation of law by reason of the commencement of said proceeding, such
interest as would have accrued on such portion of the Guarantied Obligations
if said proceedings had not been commenced) shall be included in the
Guarantied Obligations because it is the intention of Guarantors and Lender
that the Guarantied Obligations which are guarantied by Guarantors pursuant
to this Guaranty should be determined without regard to any rule of law or
order which may relieve Borrowers, or any of them, of any portion of such
Guarantied Obligations. Guarantors will permit any trustee in bankruptcy,
receiver, debtor in possession, assignee for the benefit of creditors or
similar person to pay Lender, or allow the claim of Lender in respect of,
any such interest accruing after the date on which such proceeding is
commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by any Borrower, the obligations of Guarantors
hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such
payment(s) are rescinded or recovered directly or indirectly from Lender as
a preference, fraudulent transfer or otherwise, and any such payments which
are so rescinded or recovered shall constitute Guarantied Obligations for
all purposes under this Guaranty.
2.15 SET OFF. In addition to any other rights Lender may have under law
or in equity, if any amount shall at any time be due and owing by any Guarantor
to Lender under this Guaranty, such Lender is authorized at any time or from
time to time, without notice (any such notice being hereby expressly waived),
to set off and to appropriate and to apply any and all indebtedness of Lender
owing to such Guarantor and any other property of such Guarantor held by Lender
to or for the credit or the account of such Guarantor against and on account of
the Guarantied Obligations and liabilities of such Guarantor to Lender under
this Guaranty.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lender to accept this Guaranty and to enter into
the Credit Agreement and to make the Loans thereunder, each Guarantor hereby
represents and warrants to Lender that the following statements are true and
correct:
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3.1 CORPORATE POWER: AUTHORIZATION: ENFORCEABLE OBLIGATIONS.
Such Guarantor has the corporate power, authority and legal right to
execute, deliver and perform this Guaranty and all obligations
required hereunder and has taken all necessary corporate action to
authorize its Guaranty hereunder on the terms and conditions hereof and its
execution, delivery and performance of this Guaranty and all obligations
required hereunder. No consent of any other Person including, without
limitation, stockholders and creditors of such Guarantor, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required by such Guarantor in connection with this Guaranty or the
execution, delivery, performance, validity or enforceability of this
Guaranty and all obligations required hereunder. This Guaranty has been,
and each instrument or document required hereunder will be, executed and
delivered by a duly authorized officer of such Guarantor, and this Guaranty
constitutes, and each instrument or document required hereunder when
executed and delivered by such Guarantor hereunder will constitute, the
legally valid and binding obligation of such Guarantor, enforceable
against such Guarantor in accordance with its terms, except as enforcement
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws or equitable principles relating to or
limiting creditors' rights generally.
3.2 NO LEGAL BAR TO THIS GUARANTY. The execution, delivery
and performance of this Guaranty and the documents or instruments required
hereunder, and the use of the proceeds of the borrowings under the Credit
Agreement, will not violate any provision of any existing law or regulation
binding on such Guarantor, or any order, judgment, award or decree of any
court, arbitrator or governmental authority binding on such Guarantor, or
the certificate of incorporation or bylaws of such Guarantor or any
securities issued by such Guarantor, or any mortgage, indenture, lease,
contract or other agreement, instrument or undertaking to which such
Guarantor is a party or by which such Guarantor or any of its assets may be
bound, the violation of which would have a material adverse effect on the
business, operations, assets or financial condition of such Guarantor and
its Subsidiaries, taken as a whole, and will not result in, or require, the
creation or imposition of any Lien on any of its property, assets or
revenues pursuant to the provisions of any such mortgage, indenture, lease,
contract or other agreement, instrument or undertaking.
3.3 CERTAIN GUARANTOR REPRESENTATIONS. Each Guarantor
represents that (a) it is in its best interest and in pursuit of its
corporate purposes as an integral part of the business conducted and
proposed to be conducted by SEGI and its Subsidiaries (including such
Guarantor), and reasonably necessary and convenient in connection with the
conduct of the business conducted and proposed to be conducted by it, to
induce the Lender to enter into the Credit Agreement and to extend credit
to each Borrower by making the Guaranties contemplated by this Guaranty,
(b) the credit available under the Credit Agreement will directly or
indirectly inure to its benefit, and (c) by virtue of the foregoing it is
receiving at least reasonably equivalent consideration from the Lender for
its Guaranty. Each Guarantor
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acknowledges that it has been advised by Lender that the Lender is unwilling to
enter into the Credit Agreement unless the Guaranties contemplated by this
Guaranty are given by it. Each Guarantor represents that (i) it will not be
rendered insolvent as a result of entering into this Guaranty, (ii) after
giving effect to the transactions contemplated by this Guaranty, it will have
assets having a fair saleable value in excess of the amount required to pay its
probable liability on its existing debts as they have become absolute and
matured, (iii) it has, and will have, access to adequate capital for the
conduct of its business and (iv) it has the ability to pay its debts from time
to time incurred in connection therewith as such debts mature.
SECTION 4. MISCELLANEOUS
4.1 SURVIVAL OF WARRANTIES. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Guaranty, any increase in the Commitment under the Credit Agreement and the
execution and delivery of the Note.
4.2 NOTICES. Any communications between Lender and any Guarantor and
any notices or requests provided herein to be given may be given by mailing the
same, postage prepaid, or by telex, facsimile transmission or cable to each
such party at its address set forth in the Credit Agreement, on the signature
pages hereof or to such other addresses as each such party may in writing
hereafter indicate. Any notice, request or demand to or upon Lender or any
Guarantor shall not be effective until received.
4.3 SEVERABILITY. In case any provision in or obligation under this
Guaranty shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
4.4 AMENDMENTS AND WAIVERS. No amendment, modification, termination or
waiver of any provision of this Guaranty, or consent to any departure by any
Guarantor therefrom, shall in any event be effective without the written
concurrence of Lender under the Credit Agreement. Any waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it was given.
4.5 HEADINGS. Section and subsection headings in this Guaranty are
included herein for convenience of reference only and shall not constitute a
part of this Guaranty for any other purpose or be given any substantive effect.
4.6 APPLICABLE LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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4.7 SUCCESSORS AND ASSIGNS. This Guaranty is a continuing
guaranty and shall be binding upon each Guarantor and its respective
successors and assigns. This Guaranty shall inure to the benefit of
Lender and its respective successors and assigns. No Guarantor shall
assign this Guaranty or any of the rights or obligations of such Guarantor
hereunder without the prior written consent of Lender. Lender may,
without notice or consent, assign its interest in this Guaranty in whole or
in part. The terms and provisions of this Guaranty shall inure to the
benefit of any transferee or assignee of any Note, and in the event of
such transfer or assignment the rights and privileges herein conferred
upon Lender shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof.
4.8 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GUARANTOR ARISING OUT OF OR
RELATING TO THIS GUARANTY MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATES OF NEW YORK, FLORIDA AND CALIFORNIA,
AND BY EXECUTION AND DELIVERY OF THIS GUARANTY EACH GUARANTOR ACCEPTS FOR
ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS GUARANTY.
Each Guarantor designates and appoints Spelling Entertainment Group Inc.,
and such other Persons as may hereafter be selected by such Guarantor
irrevocably agreeing in writing to so serve, as its agent to receive on its
behalf service of all process in any such proceedings in any such court,
such service being hereby acknowledged by such Guarantor to be effective
and binding service in every respect. A copy of any such process so served
shall be mailed by registered mail to such Guarantor at its address
provided in subsection 4.2; provided that, unless otherwise provided by
applicable law, any failure to mail such copy shall not affect the validity
of service of such process. If any agent appointed by any Guarantor
refuses to accept service, such Guarantor hereby agrees that service of
process sufficient for personal jurisdiction in any action against such
Guarantor in the States of New York, California and Florida may be made
by registered or certified mail, return receipt requested, to such
Guarantor at its address provided in subsection 4.2, and each Guarantor
hereby acknowledges that such service shall be effective and binding in
every respect. Nothing herein shall affect the right to serve process in
any other manner permitted by law or shall limit the right of Lender to
bring proceedings against any Guarantor in the courts of any other
jurisdiction.
4.9 NO OTHER WRITING. This writing is intended by Guarantors
and Lender as the final expression of this Guaranty and is also intended
as a complete and exclusive statement of the terms of their agreement with
respect to the matters covered hereby. No course of dealing, course of
performance or trade usage, and no parol evidence of any nature, shall be
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used to supplement or modify any terms of this Guaranty. There are no
conditions to the full effectiveness of this Guaranty.
4.10 FURTHER ASSURANCES. At any time or from time to time, upon the
request of Agent or Requisite Lenders, Guarantors shall execute and deliver
such further documents and do such other acts and things as Lender may
reasonably request in order to effect fully the purposes of this Guaranty.
4.11 ADDITIONAL SUBSIDIARY GUARANTORS. The initial Guarantors hereunder
shall be SEGI and such of the Subsidiaries of SEGI as are signatories hereto on
the date hereof. From time to time subsequent to the date hereof, additional
Subsidiaries of SEGI may become parties hereto, as additional Guarantors, by
executing a counterpart of this Guaranty. Upon delivery of any such
counterpart to Lender, notice of which is hereby waived by Guarantors, each
such additional Guarantor shall be as fully a party hereto as if such Guarantor
were an original signatory hereof. Each Guarantor expressly agrees that its
obligations arising hereunder shall not be affected or diminished by the
addition or release of any other Guarantor hereunder, nor by any election of
Lender not to cause any Subsidiary of SEGI to become an additional Guarantor
hereunder. This Guaranty shall be fully effective as to any Guarantor that is
or becomes a party hereto regardless of whether any other Person becomes or
fails to become or ceases to be a Guarantor hereunder. Each Guarantor shall
from time to time cause any present wholly owned subsidiary of Guarantor or
future wholly owned subsidiary of Guarantor, within 30 days after any such
Person becomes a Subsidiary, that is not a Guarantor to join this Guaranty as a
Guarantor pursuant to a joinder agreement in form and substance satisfactory to
the Lender unless such Subsidiary is a Subsidiary organized under the laws of a
jurisdiction outside of the United States and under applicable foreign law;
such Subsidiary is not permitted to guarantee the Credit Obligations. Each
Guarantor will, promptly upon the request of Lender from time to time, execute,
acknowledge and deliver, and file and record, all such instruments, and take
all such action, as Lender deems necessary or advisable to carry out the intent
and purposes of this Section 4.11.
4.12 COUNTERPARTS; EFFECTIVENESS. This Guaranty may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to
be an original for all purposes; but all such counterparts together shall
constitute but one and the same instrument.
This Guaranty shall become effective as to each Guarantor upon the execution of
a counterpart hereof by such Guarantor (whether or not a counterpart hereof
shall have been executed by any other Guarantor) and receipt by Lender of
written or telephonic notification of such execution and authorization of
delivery thereof.
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IN WITNESS WHEREOF, each of the undersigned Guarantors has
executed this Guaranty by its duly authorized officer as of the date first
above written.
SPELLING ENTERTAINMENT GROUP INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
___________________________
Title: Executive Vice President
________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
SPELLING ENTERTAINMENT INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_______________________
Title: President
____________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ PRODUCTIONS, INC.
SPELLING FILMS INC.
SPELLING TELEVISION INC.
TORAND PRODUCTIONS INC.
WORLDVISION ENTERPRISES, INC.
LAUREL ENTERTAINMENT, INC.
▇▇▇▇▇▇▇▇ PROJECTS, INC.
REPUBLIC ENTERTAINMENT INC.
REPUBLIC DISTRIBUTION CORPORATION
WILSHIRE ENTERTAINMENT INC.
SPELLING SATELLITE NETWORKS, INC.
BIG TICKET TELEVISION INC.
VIE HOLDING COMPANY
WESTWOOD STUDIOS, INC.
VIRGIN INTERACTIVE ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
________________________
As an authorized officer of each
of the foregoing corporations
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
ACCEPTED AND AGREED TO:
VIACOM INC.
as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
___________________________________
Title: Senior Vice President, Treasurer
________________________________
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