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EXHIBIT 10.2
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (the "PLEDGE AND SECURITY
AGREEMENT"), dated as of September 30, 1996., made among 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 the
Other Subsidiaries are sometimes individually referred to herein as a "GRANTOR"
and collectively as "GRANTORS") and VIACOM INC., a Delaware corporation
("LENDER").
PRELIMINARY STATEMENTS:
(1) Lender has entered into a Credit Agreement dated as
of September 30, 1996 with SEGI and the above named Subsidiaries as Borrowers
(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," the terms defined therein and not
otherwise defined herein being used herein as therein defined) pursuant to
which Lender has made certain commitments, subject to the terms and conditions
set forth in the Credit Agreement, to extend certain credit facilities to the
Grantors.
(2) Grantors have executed and delivered a Guaranty dated
as of even date herewith (said Guaranty, as it may hereafter be amended,
supplemented or modified from time to time, including, without limitation, by
the joinder of additional present or future subsidiaries of SEGI as guarantors
thereunder, being the "GUARANTY") in favor of Lender, pursuant to which, inter
alia, the Grantors have guaranteed the Guaranteed Obligations (as that term is
defined in the Guaranty).
(3) In order to induce Lender to make Loans under the
Credit Agreement, Grantors have agreed to secure the payment and performance of
the Credit Obligations under the
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Credit Agreement and the Guaranteed Obligations under the Guaranty by entering
into this Pledge and Security Agreement.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Grantor hereby agrees with Lender as follows:
SECTION 1. ASSIGNMENT AND PLEDGE. Each Grantor hereby mortgages,
pledges, assigns and grants to Lender a continuing security interest in all of
such Grantor's right, title and interest in and to (but none of its obligations
or liabilities with respect to) all of its personal property including, without
limitation, the items and type of present and future property of such Grantor
described in Sections I(A) through 1(0) (subject, however, to Section I(P)),
whether now or hereafter existing or in which any Grantor now has or hereafter
acquires an interest and wherever the same may be located including, without
limitation, the following (the "COLLATERAL"):
(A) Rights to Payment of Money. All rights to receive
the payment of money, including accounts (as defined in the UCC, receivables,
rights to receive the payment of money under contracts, franchises, licenses,
permits, subscriptions or other agreements (whether or not earned by
performance), and rights to receive payments from any other source;
(B) Chattel Paper. All writings which evidence both a
monetary obligation and a security interest in or lease of specific goods; when
a transaction is evidenced both by a security agreement or a lease and by an
instrument (as described in Section I(F) below) or series of such instruments,
the group of writings taken together constitutes chattel paper;
(C) Documents. All documents of title, including any
▇▇▇▇ of lading, dock warrant, dock receipt, laboratory pledgeholder agreement,
laboratory access agreement, warehouse receipt or order for the delivery of
inventory, and also any other document or receipt which in the regular course
of business or financing is treated as adequately evidencing that the Person in
possession of it is entitled to receive, hold and dispose of the document and
the goods it covers;
(D) Tangible Personal Property. All goods, machinery,
electrical and electronic components, equipment, computers, computer equipment,
furniture, office machinery, appliances, implements and all other tangible
personal property of every kind and description and used or anticipated to be
used in its businesses wherever located, and all goods of like kind or type
hereafter acquired in substitution or replacement thereof and all additions and
accessions thereto;
(E) General Intangibles. All other personal property
(including things in action) which is not elsewhere described in this Section
1. General intangibles includes, without limitation, all United States and
foreign inventions, processes, formulae, computer software, designs, trade
secrets, rights in proprietary information, licenses, patents, patent rights,
patent applications, copyrights, copyright rights, copyright applications,
trademarks, trademark rights,
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trademark applications, and all related goodwill, service marks, service ▇▇▇▇
rights, service ▇▇▇▇ applications, and all related goodwill, trade names, trade
name rights, business names, and other like business property rights, including
to the extent such security interest and the related assignment are permitted
by law, all permits, licenses and entitlements necessary for operation of
equipment, and all applications to acquire any such rights or on file or for
which application may at any time be made in the future, contracts, franchises,
licenses, permits, subscriptions and other agreements and all rights
thereunder, rights granted by others which permit the Grantor to sell or market
items of personal property, documents, good will, judgments, causes in action
and claims, whether or not inchoate, and all other general intangibles (as
defined in the UCC) and intangible property and all rights thereunder;
(F) Instruments. All drafts, checks, certificates of
deposit, notes, bills of exchange and other writings which evidence a right to
the payment of money and are not themselves security agreements or leases and
are of a type which is in the ordinary course of business transferred by
delivery with any necessary endorsement or assignment;
(G) Inventory. All inventory in all of its forms
(including, but not limited to, (1) all goods held by Grantor for sale or lease
or to be furnished under contracts of service or so leased or furnished, (2)
all raw materials, work in process, finished goods, and materials used or
consumed in the manufacture, packing, shipping, advertising, selling, leasing,
furnishing or production of such inventory or otherwise used or consumed in
Grantor's business, (3) all goods in which Grantor has an interest in mass or a
joint or other interest or right of any kind, and (4) all goods which are
returned to or repossessed by Grantor and all accessions thereto and products
thereof (all such inventory, accessions and products being the "Inventory");
(H) Fixtures. All plant fixtures, business fixtures and
other fixtures and storage and office facilities, and all accessions thereto
and products thereof,
(I) Pledged Securities. Except as provided for in
Section I(P)(4) below, the shares of stock of any present or future Subsidiary
of such Grantor or any other Person and similar evidences of other securities
or investments in any present or future Subsidiary of such Grantor or any other
Person which is a corporation, and all partnership, joint venture or similar
interests in any present or future Subsidiary of such Grantor or any other
Person which is a partnership or joint venture, and all Indebtedness from time
to time owing to such Grantor by any present or future Subsidiary of such
Grantor or any other Person (collectively, the "PLEDGED SECURITIES"),
certificates representing such Pledged Securities or other evidences of
ownership of such Pledged Securities, including, without limitation,
investments and Indebtedness, and all cash, securities, dividends and other
property at any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange or substitution for any or all of said
Pledged Securities.
(J) Film Collateral. All of the following to the extent
not included in any other subsection of this Section 1: without limiting the
generality of subsections I(A) through 1, the
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Collateral shall include all of the right, title and interest of any kind or
nature whatsoever of any Grantor in and to (but none of Grantor's obligations
or liabilities with respect to) all items of Product (as used herein the term
"PRODUCT" means any feature or non-feature motion picture, whether produced for
theatrical, non-theatrical or television release or for release in any other
medium, and any film, videotape, cassette, cartridge, disk or on or by any
other means, method, process or device whether now known or hereafter
developed, which any Grantor or any Subsidiary of any Grantor has produced or
is to produce or with respect to which any Grantor or any Subsidiary of any
Grantor has or acquires or is to acquire all or part of the theatrical,
videotape, cassette, disc, television or other distribution rights)) and
Product Rights (as used herein the term "PRODUCT RIGHTS" means (a) any rights,
whether arising under written contracts or otherwise, to sell, produce,
distribute, subdistribute, exhibit, lease, sublease, license, sublicense or
otherwise exploit Product, including rights under so-called "pick up"
arrangements and other contracts and agreements relating to the acquisition of
Product or any interest therein in any market, including the theatrical,
non-theatrical, stage, television (including broadcast, cable and pay
television) and home markets, whether by film, videotape, cassette cartridge,
disc or by any other means, method, process or device now known or hereafter
developed, (b) any rights to sell trailer and advertising accessories relating
to Product, (c) any sequel, series, serial, re-issue or re-make rights relating
to Product, and (d) any rights to exploit any element or component of Product
or any ancillary rights relating to Product, including merchandising and
character rights, stage rights, sound track recording rights and music
publishing rights relating to any music embodied in or written for Product,
including the right to grant; licenses to print, perform or mechanically
reproduce such music) and all goods, tangible property and intangible property
related to such items of Product and Product Rights, whether now owned or in
existence or hereafter made, acquired or created (collectively, the "FILM
COLLATERAL"), including, without limitation, the following:
(1) All rights of every kind and nature (including,
without limitation, copyrights) in and to any literary, trademark,
service ▇▇▇▇, literary property right, personal right, musical,
dramatic or other literary material of any kind or nature upon which,
in whole or in part, any item of Product or Product Rights is or may
be based, or from which it is or may be adapted or inspired or which
may be or has been used or included in any item of Product or Product
Rights including, without limitation, all scripts, scenarios,
screenplays, bibles, stories, treatments, novels, outlines, books,
titles, concepts, manuscripts or other properties or materials of any
kind or nature in whatever state of completion and all drafts,
versions and variations thereof (collectively, the "Literary
Property");
(2) All tangible personal property and physical
properties of every kind or nature of or relating to any item of
Product or Product Rights and all versions thereof, including, without
limitation, all physical properties relating to the development,
production, completion, delivery, exhibition, distribution or other
exploitation of any item of Product or Product Rights, and all
versions thereof or any part thereof, including, without limitation,
the Literary Property, exposed film, developed film, positives,
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negatives, prints, answer prints, special effects, preprint materials
(including interpositives, negatives, videotapes, duplicate negatives,
internegatives, color reversals, intermediates, lavenders, fine grain
master prints and matrices, video masters and all other forms of
preprint elements which may be necessary or useful to produce prints
or other copies or additional preprint elements, whether now known or
hereafter devised), sound tracks, recordings, audio and video tapes
and discs of all types and gauges, cutouts, trims, all contracts,
credit lists, music licenses, all promotional materials relating to
any item of Product or Product Rights, including, without limitation,
transparencies, posters, press books, publicity kits, still
photographs and promotional trailers and any and all other physical
properties of every kind and nature relating to any item of Product in
whatever state of completion, and all duplicates, drafts, versions,
variations and copies of each thereof (hereinafter referred to
collectively as the "PHYSICAL PROPERTIES");
(3) All rights of every kind or nature in and to any and
all music and musical compositions created for, used in or to be used
in connection with any item of Product or Product Rights including,
without limitation, all copyrights therein and all rights to perform,
copy, record, rerecord, produce, publish, reproduce or synchronize any
or all of said music and musical compositions as well as all other
rights to exploit such music including record, soundtrack recording,
and music publishing rights;
(4) All collateral, allied, ancillary, subsidiary,
publishing and merchandising rights of every kind and nature, without
limitation, derived from, appurtenant to or related to any item of
Product, Product Rights or the Literary Property, including, without
limitation, all production, exploitation, reissue, remake, sequel,
serial or series production rights by use of film, tape or any other
recording devices now known or hereafter devised, whether based upon,
derived from or inspired by any item of Product, Product Rights, the
Literary Property or any part thereof: all rights to use, exploit and
license others to use or exploit any and all novelization, publishing,
merchandising rights and commercial tie-ups arising out of or
connected with or inspired by any item of Product, Product Rights, the
Literary Property, the title or titles of any item of Product, or said
Literary Property, the characters appearing in the item of Product,
Product Rights or said Literary Property and/or the names or
characteristics of said characters, and including further, without
limitation, any and all commercial exploitation in connection with or
related to any item of Product, all remakes or sequels thereof, any
Product Rights and/or said Literary Property;
(5) All rights of every kind or nature, present and
future, in and to all agreements relating to the development,
production, completion, delivery and exploitation of any item of
Product, including, without limitation, all agreements for personal
services, including the services of writers, directors, cast,
producers, special effects personnel, personnel, animators, cameramen
and other creative, artistic and technical staff and agreements for
the use of studio space, equipment, facilities, locations, animation
services, special effects services and laboratory contracts;
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(6) All insurance and insurance policies heretofore or
hereafter placed upon any item of Product, Product Rights, the
Physical Properties or the insurable properties thereof and/or any
person or persons engaged in the development, production, completion,
delivery or exploitation of any item of Product or Product Rights and
the proceeds thereof;
(7) All copyrights, rights in copyrights, interests in
copyrights, applications for copyrights, and renewals and extensions
of copyrights, domestic and foreign, heretofore or hereafter obtained
upon any item of Product, Product Rights or the Literary Property or
any part thereof, and the right (but not the obligation) to make
publication thereof for copyright purposes, to register claims under
copyright, and the right (but not the obligation) to renew and extend
such copyrights, and the right (but not the obligation) to ▇▇▇ in the
name of any Grantor or any of its Subsidiaries or in the name of
Lender for past, present and future infringements of copyright;
(8) All rights to produce, acquire, release sell,
distribute, subdistribute, lease, sublease, market, license,
sublicense, exhibit, broadcast, transmit, reproduce, publicize or
otherwise exploit any item of Product, Product Rights, the Literary
Property and any and all rights therein (including, without
limitation, the rights referred to in Section I(J)(4) above) in
perpetuity, without limitation, in any manner and in any media
whatsoever throughout the universe, including, without limitation, by
projection, radio, all forms of television (including, without
limitation, free, pay-per-view, pay, toll, cable, sustaining
subscription, sponsored and direct satellite broadcast), in theaters,
non-theatrically, or cassettes, cartridges and discs and by any and
all other scientific, mechanical or electronic means, methods,
processes or devices now known or hereafter conceived, devised or
created;
(9) All rights of any Grantor or any of its Subsidiaries,
of any kind or nature, direct or indirect, to acquire, produce,
develop, reacquire, finance, release, sell, distribute, subdistribute,
lease, sublease, market, license, sublicense, exhibit, broadcast,
transmit, reproduce, publicize, or otherwise exploit any item of
Product, Product Rights or any other rights in any item of Product,
including, without limitation, pursuant to agreements entered into by
any Grantor or any of its Subsidiaries, which relate to the ownership,
production, distribution or financing of the item of Product,
including without limitation, (a) all rights of any Grantor or any of
its Subsidiaries to receive moneys due or to become due pursuant to
any such agreement, (b) all rights of any Grantor or any of its
Subsidiaries to receive proceeds of any insurance, indemnity, warranty
or guaranty with respect to any such agreement, (c) claims of any
Grantor or any of its Subsidiaries for damages arising out of or for
breach of or default under any such agreement and (d) all rights of
any Grantor or any of its Subsidiaries to terminate any such
agreement, to perform thereunder and to compel performance and
otherwise exercise any and all rights and remedies thereunder;
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(10) Any and all tangible and intangible personal property
including without limitation general intangibles (as defined in the
UCC), not elsewhere included in this definition, constituting or
relating to any item of Product or Product Rights which may arise in
connection with the creation, production, completion, delivery,
financing, ownership, possession or exploitation of any item of
Product or Product Rights;
(11) The pledgeholder, laboratory access, or film
warehousing agreements relating to any item of Product or Product
Rights and any and all documents, receipts or books and records,
including, without limitation, documents or receipts of any kind or
nature issued by any pledgeholder, warehouseman or bailee with respect
to any item of Product, Product Rights and any Physical Property
relating thereto;
(12) All contract rights and general intangibles (and all
proceeds and products thereof) relating to the grant or license by any
Grantor or any of its Subsidiaries to any Person of any right to
release, sell, distribute, subdistribute, lease, sublease, market,
license, sublicense, exhibit, broadcast, transmit, reproduce,
publicize, or otherwise exploit any item of Product or Product Rights
or any rights in any item of Product or Product Rights pursuant to any
agreements entered into by any Grantor or any of its Subsidiaries
which relate to the ownership, production, distribution or financing
of any item of Product or Product Rights including, without
limitation, (a) all rights of any Grantor or any of its Subsidiaries
to receive moneys due or to become due pursuant to any such agreement,
(b) all rights of any Grantor or any of its Subsidiaries to receive
proceeds of any insurance, indemnity, warranty or guaranty with
respect to any such agreement, (c) claims of any Grantor or any of its
Subsidiaries for damages arising out of or for breach of or default
under any such agreement and (d) the right of any Grantor or any of
its Subsidiaries to terminate any such agreement, to perform
thereunder and to compel performance and otherwise exercise any and
all rights and remedies thereunder (collectively, the "ASSIGNED
AGREEMENTS");
(13) All machines, electrical and electronic components,
equipment, fixtures, trailers, implements and other tangible personal
property of every kind and description now owned or hereafter acquired
by any Grantor or any of its Subsidiaries (including, without
limitation, all wardrobe, props, mikes, scenery, sound stages,
movable, permanent or vehicular dressing rooms, sets, lighting
equipment, cameras and other photographic, sound recording and editing
equipment, projectors, film developing equipment and machinery), and
all goods of like kind or type hereafter acquired by any Grantor or
any of its Subsidiaries in substitution or replacement thereof, and
all additions and accessions thereto relating to the production or
exploitation of items of Product and/or Product Rights; and
(14) The following personal property, whether now owned or
hereafter acquired: (a) the title or titles of any item of Product or
Product Rights and all rights of any Grantor or any of its
Subsidiaries to the exclusive use thereof including rights
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protected pursuant to trademark, service ▇▇▇▇, unfair competition
and/or other laws, rules or principles of law or equity and (b) all
inventions, processes, formulae, licenses, patents, patent rights,
trademarks, trademark rights, service marks, service ▇▇▇▇ rights,
trade names, trade name rights, logos, indicia, corporate and company
names, business source or business identifiers and renewals and
extensions thereof, domestic and foreign, whether now owned or
hereafter acquired, and the accompanying goodwill and other like
business property rights relating to any item of Product or Product
Rights, and the right (but not the obligation) to register a claim
under trademark or patent and to renew and extend such trademarks or
patents and the right (but not the obligation) to ▇▇▇ in the name of
any Grantor or any of its Subsidiaries or in the name of Lender for
past, present or future infringement of trademark or patents.
(K) Bank Accounts: Cash and Cash Equivalents.
(1) All deposit and other accounts and any extension or
renewal of such accounts and all certificates and instruments, if any,
from time to time representing or evidencing such accounts opened in
the name of any Grantor with any bank or other financial institution
(collectively, the "BANK ACCOUNTS");
(2) All monies on deposit in any Bank Account, all
account investments relating thereto from time to time and all
certificates and instruments, if any, from time to time representing
or evidencing the account investments;
(3) All notes, commercial paper, certificates of deposit,
bankers' acceptances and other instruments from time to time delivered
to or otherwise possessed by Grantor for or on behalf of any Grantor
in addition to or in substitution for any account investment; and
(4) All interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise
distributed or distributable in respect of or in exchange for any or
all of the Collateral described in this Section l(K).
(L) Books and Records. All books, records, ledger cards, files,
correspondence, computer programs, tapes, disks and related data processing
software that at any time evidence or contain information relating to any of
the Collateral or are otherwise necessary or helpful in the collection thereof
or realization thereupon;
(M) Other General Intangibles. To the extent not included in any
other paragraph of this Section 1, all other general intangibles (including,
without limitation, tax refunds, rights to payment or performance, choses in
action and judgments taken on any rights or claims included in the Collateral);
(N) All Other Property. All other property, assets and items of value of
every kind and
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nature, tangible or intangible, absolute or contingent, legal or equitable;
(O) Proceeds and Products. All proceeds, products, rents and
profits of or from any and all of the foregoing Collateral and, to the extent
not otherwise included, all payments under insurance (whether or not Lender is
the loss payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the foregoing
Collateral. For purposes of this Agreement, the term "PROCEEDS" includes
whatever is receivable or received when Collateral or proceeds are sold,
exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary;
(P) Excluded Property. Notwithstanding Sections I(A) through
I(O), the payment and performance of the Secured Obligations (as hereinafter
defined) shall not be secured by:
(1) any rights arising under, and any property, tangible
or intangible, acquired under, any agreement executed by any Grantor
to the extent that such agreement validly prohibits the creation by
any Grantor of a security interest in such rights or property.
(2) any rights or property to the extent that any valid
and enforceable law or regulation applicable to such rights or
property prohibits the creation of a security interest therein.
(3) the items described in Section I (Q) (but only to the
extent Lender has not specified that such items be included in the
Collateral pursuant thereto).
(4) capital stock of other companies in the entertainment
industry which are not Affiliates of any Grantor having a cost to the
Grantor not exceeding $25,000 in the aggregate.
(Q) Additional Collateral. As additional Collateral, each Grantor
covenants that it will mortgage, pledge and collaterally grant and assign to
the Lender and will create a security interest in favor of the Lender in, all
of its right, title and interest in and to (but none of its liabilities or
obligations with respect to) such of the following present or future items as
the Lender may from time to time specify by notice to SEGI, whether now owned
or hereafter acquired, and the proceeds and products thereof (except to the
extent consisting of rights or property of the types referred to in Section
I(P)), all of which shall thereupon be included in the term "COLLATERAL":
(1) Real Property. All real property and immovable
property and fixtures, leasehold interests and easements wherever
located, together with any and all estates and interests of the
Grantor therein, including lands, buildings, stores, manufacturing
facilities and other structures erected on such property, fixed plant,
fixed equipment and all permits, rights, licenses, benefits and other
interests of any kind or nature whatsoever in respect of such real and
immovable property.
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(2) Motor Vehicles and Airplanes. All motor vehicles and
airplanes.
SECTION 2. SECURITY FOR OBLIGATIONS.
(A) With respect to each Grantor the following shall apply:
(1) Primary Secured Obligations. This Agreement secures,
and the Collateral granted by such Grantor is collateral security for,
the prompt payment and performance in full when due, whether at stated
maturity, by acceleration or otherwise (including the payment of
amounts which would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, II U.S.C. Section
362(a) or the operation of any other provision of law of any
jurisdiction which would otherwise cause a stay of the payment of such
amounts), of all Credit Obligations now or hereafter existing under or
in respect of the Credit Agreement and the Notes, whether for
principal, premium, interest (including, without limitation, interest
which, but for the filing of a petition in bankruptcy with respect to
such Grantor would accrue on such fees, expenses or otherwise) and all
obligations of such Grantor now or hereafter existing under this
Agreement.
(2) Secondary Secured Obligations. This Agreement
secures, and the Collateral granted by such Grantor is collateral
security for the prompt payment and performance in full when due,
whether at stated maturity, by acceleration or otherwise (including
the payment of amounts which would become due but for the operation of
the automatic stay under Section 362(a) of the Bankruptcy Code, II
U.S.C. Section 362(a) or the operation of any other provision of law
of any jurisdiction which would otherwise cause a stay of the payment
of such amounts), of all obligations of such Grantor now or hereafter
existing under or in respect of the Guaranty, whether for principal,
premium, interest (including, without limitation, interest which, but
for the filing of a petition in bankruptcy with respect to any other
Borrower, would accrue on such obligations), fees, expenses or
otherwise.
(3) The Primary Secured Obligations and the Secondary Secured
Obligations are collectively referred to as the Secured Obligations.
SECTION 3. REPRESENTATION AND WARRANTIES. Each Grantor represents and
warrants as follows:
(A) Each Grantor has full power, authority and legal right to
pledge all of the Collateral pledged pursuant to this Agreement.
(B) Each Grantor is, and at the time of delivery of any Collateral
required to be delivered to the Lender pursuant to Sections 5 or 12 of this
Agreement will be, the legal and beneficial owner of the Collateral pledged by
such Grantor hereunder.
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(C) The chief place of business and chief executive office of each
Grantor and the office where each Grantor keeps its records concerning the
Collateral described in Section I(A) hereof is located at the address specified
for such Grantor on Schedule 3(c) hereto and the address of each of the offices
where each Grantor does business is set forth on Schedule 3(C) annexed hereto.
(D) All of the Pledged Securities have been duly authorized and
validly issued and are fully paid and nonassessable.
(E) This Agreement creates a valid and perfected security interest
in the Collateral, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and protect such
security interests have been duly taken or waived by Lender.
(F) No consent of any other party (including, without limitation,
stockholders or creditors of any Grantor or any Subsidiary of any Grantor) and
no consent, authorization, approval, or other action by, and no notice to or
filing with any governmental authority or regulatory body is required either
(x) for the pledge by Grantors of the Collateral pursuant to this Agreement or
for the execution, delivery or performance of this Agreement by Grantors or (y)
for the exercise by the Lender of the voting or other rights provided for in
this Agreement or the remedies in respect of the Collateral pursuant to this
Agreement; except (a) as may be required in connection with such disposition by
laws affecting the offering and sale of securities generally, (b) UCC-1 filings
with the Secretary of State of the State of California and the State of New
York which filings have been made and (c) filings with the United States
Copyright Office.
(G) The Pledged Securities consisting of the stock of the
Subsidiaries of SEGI constitute one hundred percent (100%) of the issued and
outstanding shares of stock of the respective issuers thereof.
(H) All information set forth herein relating to the Collateral is
accurate and complete in all material respects.
(I) The pledge of the Collateral, if any, constituting Margin
Stock pursuant to this agreement does not violate Regulation U of the Federal
Reserve Board.
SECTION 4. DELIVERY OF CERTAIN COLLATERAL. All certificates, or
instruments, if any, representing or evidencing the Collateral described in
Sections I(F) and (I) or the proceeds of such Collateral shall be delivered to
and held by or on behalf of Lender pursuant hereto and shall be in suitable
form for transfer by delivery, or shall be accompanied by duly executed undated
instruments of transfer or assignment in blank, all in form and substance
satisfactory to Lender. Lender shall have the right, at any time in its
discretion and without notice to any Grantor, to transfer to or to register in
the name of Lender or any of its nominees any or all of such Collateral. In
addition, Lender shall have the right at any time to exchange certificates or
instruments representing or evidencing such Collateral for certificates or
instruments of smaller or larger
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denominations. All additional certificates or instruments, if any,
representing or evidencing Collateral described in Sections I (F) and (1)
acquired from time to time after the date hereof in any manner shall be
delivered to Lender promptly after each such acquisition, and held by or on
behalf of Lender in accordance with the provisions of this Section 4.
SECTION 5. ASSIGNED AGREEMENTS. RECEIVABLES AND OTHER COLLATERAL
PLEDGED UNDER SECTION 1.
(A) Place of Perfection: Records. Each Grantor shall keep its
chief place of business and chief executive office and the office where it
keeps its records concerning the Collateral at the location therefor specified
in Section 3(C) or, upon 30 days' prior written notice to Lender, at such other
location in a jurisdiction where all action required by this Agreement shall
have been taken with respect to the Collateral. Each Grantor will hold and
preserve such records and will permit representatives of Lender at any time
during normal business hours after prior notice to inspect and make abstracts
from such records.
(B) Grantors Remain Liable Under Assigned Agreements. Anything
herein to the contrary notwithstanding, (1) each Grantor shall remain liable
under the Assigned Agreements to the extent set forth therein to perform all of
its duties and obligations thereunder to the same extent as if this Agreement
had not been executed, (2) the exercise by Lender of any of the rights
hereunder shall not release any Grantor from any of its duties or obligations
under the Assigned Agreements, and (3) Lender shall not have any obligation or
liability under the Assigned Agreements by reason of this Agreement, nor shall
Lender be obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder.
SECTION 6. LOCATION OF FILM COLLATERAL, PLEDGEHOLDER AGREEMENT: COPYRIGHT
OFFICE FILINGS.
(A) Each Grantor agrees, with respect to all Film Collateral, to
at all times maintain and to cause its Subsidiaries to maintain, at a
laboratory or other commercial storage facility at least one complete set of
all preprint material (including all necessary film, video and sound track
materials) necessary to make copies of the Product for exhibition and other
exploitation in the applicable media to which the Grantor owns or controls
exploitation rights. With respect to completed items of Product, the Grantors
hereby agree that at all times at least one complete copy of all preprint
materials required to make exhibition copies with respect to any such item of
Product shall be located in a jurisdiction where either (i) UCC-1 financing
statements or similar evidence of the Lender's security interest under
applicable law have been filed against the Grantors, or (ii) Lender has
otherwise acquired a perfected security interest or analogous rights in the
Film Collateral under applicable foreign law.
(B) Each Grantor will, and will cause each of its Subsidiaries to,
act as pledgeholder for the Lender with the same effect as if the Lender were a
pledgee in possession of all Film
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Collateral which are now or hereafter in the (actual or constructive)
possession of any Grantor or any of its Subsidiaries, subject to such access of
such Grantors and other third parties as shall be necessary to produce and
exploit any item of Product.
(C) Copyright Filings. Concurrently herewith, a Copyright
Mortgage and Assignment will be filed with the United States Copyright Office
transferring to Lender as security all of Grantors and their Subsidiaries'
rights in and to the registered copyrights and copyright licenses attached as
Schedule 1 thereto. With respect to any item of Product the copyright of which
is subsequently owned by any Grantor or any of its Subsidiaries, such Grantor
(or such Subsidiary) shall execute and file an application for copyright
registration with the United States Copyright Office (the "COPYRIGHT OFFICE").
With respect to any item of Product in which any Grantor or any of its
Subsidiaries has subsequently acquired any distribution, exploitation or other
rights, such Grantor (or such Subsidiary) acquiring any such rights shall file
an instrument of transfer for recordation with the Copyright Office. Such
instrument of transfer shall be duly authorized, executed and acknowledged by
the transferor of any such rights and in the event such item of Product has not
been registered for copyright, such Grantor (or such Subsidiary) shall register
or shall cause the transferor of such rights to register such item of Product
in the Copyright Office. Each such Grantor shall use and shall cause its
Subsidiaries to use best efforts to comply with all requirements of the federal
Copyright Act, the rules and regulations promulgated thereunder and any other
applicable laws or regulations, and shall take all steps necessary to validly
register the ownership of the copyright to such item of Product or to record
the instrument of transfer transferring distribution, exploitation or other
rights to such item of Product, as applicable, in the United States Copyright
Office.
Within 30 days of the end of each fiscal quarter following the date
hereof, the Grantors will prepare an amendment to the Copyright Mortgage and
Assignment in form and substance satisfactory to Lender listing in an
appropriate Schedule all copyright registrations and instruments of transfer
registered by Grantors and their Subsidiaries during such fiscal quarter.
Lender will then file and record the amendment with the Copyright Office.
SECTION 7. PLEDGED SECURITIES.
(A) So long as no Event of Default or Potential Event of Default
shall have occurred and be continuing:
(1) Each Grantor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Pledged
Securities or any part thereof for any purpose not inconsistent with
the terms of this Pledge and Security Agreement or the Credit
Agreement.
(2) Each Grantor shall be entitled to receive and retain
any and all dividends and interest paid in respect of the Pledged
Securities.
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(B) Upon the occurrence and during the continuance of an Event of
Default or a Default all rights of any Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant to
Section 7(A)(1) and to receive the dividends and interest payments which it
would otherwise be authorized to receive and retain pursuant to Section 7(A)(2)
shall cease, and all such rights shall thereupon become vested in Lender who
shall thereupon have the sole right to exercise such voting and other
consensual rights and to receive and hold as Collateral such dividends and
interest payments.
SECTION 8. COVENANTS; FURTHER ASSURANCES.
(A) Each Grantor agrees that from time to time, at the expense of
such Grantor, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary
or desirable, or that Lender may reasonably request, in order to perfect and
protect the assignment and security interest granted or purported to be granted
hereby or to enable Lender to enforce its rights and remedies hereunder with
respect to any Collateral.
(B) Each Grantor will (1) if any Collateral shall be evidenced by
a promissory note or other instrument or chattel paper, deliver and pledge to
Lender hereunder all executed originals of such note, instrument or chattel
paper duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to Lender; and
(2) ▇▇▇▇ conspicuously each copy of an agreement, document, instrument or other
writing which constitutes chattel paper and, at the request of Lender, each of
its records pertaining to such Collateral, with a legend, in form and substance
satisfactory to Lender, indicating that such Collateral, as the case may be,
has been assigned and is subject to the security interest granted pursuant to
this Agreement.
(C) Each Grantor will execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Lender may reasonably request,
in order to perfect and preserve the assignment and security interest granted
or purported to be granted hereby. Each Grantor hereby authorizes Lender to
file one or more financing or continuation statements, and amendments thereto,
relative to all or any part of the Collateral without the signature of any
Grantor where permitted by law. A carbon, photographic or other reproduction
of this Agreement or any financing statement concerning the Collateral or any
part thereof shall be sufficient as a financing statement where permitted by
law.
(D) Each Grantor will comply with all laws, rules and regulations
relating to, and shall pay prior to delinquency all license fees, registration
fees, taxes and assessments, and all other charges, including without
limitation nongovernmental levies or assessments, which may be levied upon or
assessed against, or which may become security interests, liens or other
encumbrances on, the ownership or possession, of any material part of the
Collateral, or which create or may create a lien upon any material part of the
Collateral; provided, however, that Grantors shall not be required to comply
with any such law, rule or regulation, or to pay any such tax, fee,
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assessment or other charge, the validity of which is being contested by such
Grantor in good faith by appropriate proceedings promptly instituted and
diligently conducted.
(E) Each Grantor will at all times keep accurate records with
respect to the Collateral which are as complete and comprehensive as those
customarily maintained by others engaged in businesses of the type in which
Grantors engage, and agrees that Lender or its representatives shall have the
right, at any time during normal working hours or any other reasonable time and
from time to time, to call at its place or places of business or where the
Collateral or any part thereof may be held or located or its records pertaining
to the Collateral may be kept and to inspect the Collateral and/or examine or
cause to be examined such records and to make abstracts therefrom or copies
thereof. In addition, upon Lender's request, if Lender deems it necessary or
desirable to perfect or preserve Lender's security interest in the Collateral,
and at the cost and expense of each Grantor, Grantor will make or stamp on, or
otherwise affix to, each material item of Collateral and each of its individual
ledger sheets, cards and other records pertaining thereto, a legend or plaque
in form and content reasonably satisfactory to Lender indicating that such
Collateral is subject to a security interest in favor of Lender.
(F) At such time or times as Lender may request, each Grantor
will, at its cost and expense, prepare a list, statement, schedule or report in
such form as shall be reasonably satisfactory to Lender, certified by duly
authorized officers of such Grantor, describing in such detail as Lender shall
require, the Collateral, and specifying the location of such Collateral, each
Grantor's records pertaining thereto and such other information as Lender may
reasonably request. No Grantor shall change the location of any Collateral
described on any list furnished pursuant to this subsection (H) or (except
insofar as the change of location is within the same county to another office
or plant of such Grantor or to a laboratory or other commercial storage
facility in the United States so long as such laboratory or facility has
executed and delivered to Lender a Pledgeholder Agreement) the location of such
Grantor's records pertaining to such Collateral, except upon ten (10) Business
Days' prior written notice to Lender of such change and of the new location of
such Collateral or the records pertaining thereto, and, in the case of change
in location of any Collateral, such Grantor shall duly perfect Lender's
security interest in any such item by preparing, executing and, if required by
Lender, filing a Uniform Commercial Code financing statement with respect
thereto in any new jurisdiction where such item has been removed and may remain
for three months or more and/or taking such other actions as may be required or
desirable to duly perfect Lender's security interest in any such items of
Collateral.
SECTION 9. REMEDIES UPON DEFAULT. If any Event of Default shall have
occurred and be continuing under the Credit Agreement or the Guaranty:
(A) (1) Lender may exercise in respect of the Collateral, in
addition to other rights and remedies, all the rights and remedies of a secured
party in default under the UCC in effect in the State of New York at that time,
and the Lender may also without notice, except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private
sale, at any exchange, broker's board or at any of the Lender's offices or
elsewhere, for cash, on credit or
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for future delivery, and at such price or prices and upon such other terms as
the Lender may deem commercially reasonable irrespective of the impact of any
such sales on the market price of the Collateral. Lender may be the purchaser
of any or all of the Collateral at any such sale and shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply any of the Secured Obligations as a credit on account of the purchase
price of any Collateral payable by Lender at such sale. Each purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of any Grantor and each Grantor hereby waives (to the extent
permitted by law) all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice
of sale shall be required by law, at least ten days' notice of sale to the
Grantor whose Collateral is to be sold of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. Lender shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Lender may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. Each Grantor hereby waives any
claims against Lender arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
which might have been obtained at a public sale, even if Lender accepts the
first offer received and does not offer such Collateral to more than one
offeree.
(2) Each Grantor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as from time to
time amended (the "SECURITIES ACT"), and applicable state securities
laws, Lender may be compelled, with respect to any sale of all or any
part of the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own account,
for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sales may be
at prices and on terms less favorable to Lender than those obtainable
through a public sale without such restrictions (including, without
limitation, a public offering made pursuant to a registration
statement under the Securities Act), and notwithstanding such
circumstances agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that Lender
shall not have any obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of time
necessary to permit the issuer thereof to register it for a form of
public sale requiring registration under the Securities Act or under
applicable state securities laws, even if the applicable Grantor would
agree to do so.
(B) If Lender determines to exercise its right to sell any or all
of the Collateral, upon written request, each Grantor shall and shall cause
each issuer of any Pledged Shares or other Pledged Securities to be sold
hereunder from time to time to furnish to Lender all such information as Lender
may request in order to determine the number of shares and other instruments
included in the Collateral which may be sold by Lender as exempt transactions
under the Securities Act and the rules of the Securities and Exchange
Commission thereunder, as the
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same are from time to time in effect.
(C) Lender may exercise any and all rights and remedies of each
Grantor under or in connection with the agreements which otherwise constitute
Collateral hereunder, including, without limitation, any and all rights of any
Grantor to demand or otherwise require payment of any amount under, or
performance of any provision of, any such agreements.
(D) All payments received by any Lender under or in connection
with any other agreements which constitute Collateral shall be received in
trust for the benefit of Lender, shall be segregated from other funds of such
Grantor and shall be forthwith paid over to Lender in the same form as so
received (with any necessary endorsement).
SECTION 10. APPLICATION OF PROCEEDS. After and during the continuance
of any Event of Default, any cash held by Lender as Collateral and all cash
proceeds received by Lender (all such cash being "PROCEEDS") in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral pursuant to the exercise by Lender of its remedies as a secured
creditor as provided in Section 9 of this Agreement shall be applied promptly
from time to time by Lender:
First, to the payment of the costs and expenses of such sale,
collection or other realization, including reasonable compensation to Lender
and its agents and counsel, and all expenses, liabilities and advances made or
incurred by Lender in connection therewith;
Second,to the payment of the Secured Obligations (it being agreed that
with respect to any Proceeds derived from any Collateral owned by a
Borrower/Grantor, such proceeds shall first be applied to such
Borrower/Grantor's Primary Secured Obligations and after the payment of such
Borrower/Grantor's Primary Secured Obligations then to such Borrower/Grantor's
Secondary Secured Obligations); and
Third, only after payment in full of all Secured Obligations, to the
Grantors, or other 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 Proceeds.
SECTION 11. REGISTRATION RIGHTS WITH RESPECT TO PLEDGED SHARES. If
Lender shall determine to exercise its right to sell all or any of the
Collateral pursuant to Section 9, each Grantor agrees that, upon request of
Lender, each Grantor will, at its own expense:
(A) execute and deliver, and cause each issuer of the Pledged
Shares contemplated to be sold and the directors and officers thereof to
execute and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the opinion of
Lender, advisable to register such Pledged Shares under the provisions of the
Securities Act and to cause the registration statement relating thereto to
become effective and to remain effective for such period as prospectuses are
required by law to be furnished, and to make
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all amendments and supplements thereto and to the related prospectus which, in
the opinion of Lender, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto;
(B) use its best efforts to qualify the Pledged Shares under the
state securities or "Blue Sky" laws and to obtain all necessary governmental
approvals for the sale of the Pledged Shares, as requested by Lender;
(C) cause each such issuer to make available to its security
holders, as soon as practicable, an earning statement which will satisfy the
provisions of Section II(a) of the Securities Act; and
(D) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Shares or any part thereof valid
and binding and in compliance with applicable law.
SECTION 12. SECURITY INTEREST ABSOLUTE. All rights of Lender and the
assignment and security interest hereunder, and all obligations of each Grantor
hereunder, shall be absolute and unconditional, irrespective of:
(A) any lack of validity, enforceability, genuineness or
regularity of the Credit Agreement, the Notes, the Guaranty; any agreements
constituting collateral, any other Credit Document or any other agreement or
instrument relating thereto;
(B) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Secured Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, the Notes, the Guaranty, any agreements constituting collateral or
any other Credit Document;
(C) any exchange, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to departure
from any guaranty, for all or any of the Secured Obligations; or
(D) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, any Grantor, or a third party grantor
of a security interest.
SECTION 13. LENDER APPOINTED ATTORNEY-IN-FACT. Each Grantor hereby
irrevocably appoints Lender as such Grantor's attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such
Grantor or otherwise, from and after the occurrence of any Event of Default and
so long as an Event of Default shall be continuing, from time to time in
Lender's discretion to take any action and to execute any instrument which
Lender may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, to accept and/or release Collateral
as provided in this Agreement, to ask, demand,
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collect, ▇▇▇ for, recover, compound, receive and give acquittance and receipts
for moneys due and to become due under or in connection with the Collateral, to
receive, endorse, and collect any drafts or other instruments, documents,
letters of credit and chattel paper in connection therewith or representing any
interest payment, dividend or other distribution or payment in respect of the
Collateral or any part thereof and to give full discharge for the same, and to
file any claims or take any action or institute any proceedings which Lender
may deem to be necessary or desirable for the collection thereof or to enforce
compliance with the terms and conditions of any Collateral.
SECTION 14. LENDER MAY PERFORM. If any Grantor fails to perform any
agreement contained herein, Lender may itself perform, or cause performance of,
such agreement, and the reasonable expenses of Lender incurred in connection
therewith shall be payable by Grantors under Section 16.
SECTION 15. LENDER'S DUTIES. The powers conferred on Lender
hereunder are solely to protect its interest in the Collateral and shall not
impose any duty upon it to exercise any such powers. Except for the safe
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder with respect to which Lender shall act with
reasonable care, Lender shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. Lender shall be deemed to have
exercised reasonable care in the custody and preservation of the Collateral in
its possession if the Collateral is accorded treatment substantially equal to
that which Lender accords its own property, it being understood that Lender
shall not have any responsibility for ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not Lender has or is deemed to have
knowledge of such matters.
SECTION 16. INDEMNIFY AND EXPENSES.
(A) Each Grantor agrees to indemnify Lender from and against any
and all claims, losses and liabilities growing out of or resulting from this
Agreement (including without limitation enforcement of this Agreement and any
misstatements or omissions contained in any prospectus prepared by such Grantor
pursuant to Section 11); provided, however, that Grantors shall have no
obligation to provide indemnification under this Section 16 to a Person to the
extent that such claims, losses or liabilities arise from such Person's gross
negligence or willful misconduct.
(B) Each Grantor will upon demand pay to Lender the amount of any
and all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, which Lender may incur in connection
with (1) the administration of this Agreement, (2) the custody or preservation
of, or the collection from or other realization upon, any of the Collateral,
(3) the exercise or enforcement of any of the rights of Lender hereunder or (4)
the failure by any Grantor to perform or observe any of the provisions hereof.
SECTION 17. AMENDMENTS: ETC. No amendment or waiver of any provision
of this
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Agreement nor consent to any departure by any Grantor herefrom shall in any
event be effective unless the same shall be in writing and signed by Lender
and, in the case of such an amendment, signed by Grantors, and then such waiver
or consent shall be effective only in the specific instance and for the
specific purpose for which given.
SECTION 18. NOTICES. Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to be given
shall be in writing and may be personally served, telecopied, telexed or sent
by United States mail and shall be deemed to have been given when delivered in
person, receipt of telecopy or telex or four Business Days after deposit in the
United States mail, registered or certified return receipt requested, with
postage prepaid and properly addressed; provided that notices to Lender shall
not be effective until received. For the purposes hereof, the addresses of the
parties hereto (until notice of a change thereof is delivered as provided in
this Section 18) shall be as set forth below each party's name on the signature
pages of this Agreement.
SECTION 19. CONTINUING ASSIGNMENT AND SECURITY INTEREST: TRANSFER OF
NOTES. This Agreement shall create a continuing assignment of and security
interest in the Collateral and shall (A) remain in full force and effect until
indefeasible payment in full of the Secured Obligations, (B) be binding upon
each Grantor and its successors and assigns and (C) inure, together with the
rights and remedies of Lender hereunder, to the benefit of Lender and their
respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (C), Lender may assign or otherwise transfer
any Note held by it to any other person or entity, and such other person or
entity shall thereupon become vested with all the benefits in respect thereof
granted to Lender herein or otherwise. Upon the indefeasible payment in full
of the Secured Obligations and the termination of all of the Commitments, the
security interest granted hereby shall terminate, all rights to the Collateral
pledged or assigned by each Grantor shall revert to such Grantor. Upon any
such termination, Lender will, at Grantors' expense, execute and deliver to the
applicable Grantor such documents as such Grantor shall reasonably request to
evidence such termination.
SECTION 20. ASSIGNMENT. Lender may assign, endorse or transfer any
instrument evidencing all or any part of the Credit Obligations, and the holder
of such instrument shall be entitled to the benefits of this Agreement.
Grantors' rights, obligations or any interest therein under this Agreement may
not be assigned without the written consent of Lender.
SECTION 21. SEVERABILITY. In case any provision in or obligation
under this Agreement 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.
SECTION 22. GOVERNING LAW; TERMS. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, except
to the extent that the validity or perfection of the security interest
hereunder, or remedies hereunder, are governed by
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the laws of a jurisdiction other than the State of New York. Unless otherwise
defined herein or in the Credit Agreement, terms used in Article 9 of the UCC
in effect in the State of New York are used herein as therein defined.
SECTION 23. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. All
judicial proceedings brought against any Grantor, with respect to this
Agreement, the Guaranty or any other Credit Document may be brought in any
state or federal court of competent jurisdiction in the State of New York, or
California and by execution and delivery of this Agreement each Grantor accepts
for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of the aforesaid courts, without
any objection to the venue chosen by Lender based on forum non conveniens or
otherwise, and irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement, the Guaranty or any other Credit Document.
The Grantors designate and appoint Spelling Entertainment Group Inc., and such
other Persons as may hereafter be selected by the Grantors, as Grantors' agent
to receive on Grantors' behalf service of all process in any such proceeding in
any such court, such service being hereby acknowledged by Grantors to be
effective and binding service in every respect. A copy of any such process so
served shall be mailed by registered mail to each Grantor at its address
provided in the applicable signature page hereto, except that unless otherwise
provided by applicable law, any failure to mail such copy shall not affect the
validity of service of process. If any agent appointed by any Grantor refuses
to accept service, the Grantors hereby agree that service upon it by mail shall
constitute sufficient notice. 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 Grantor in the courts of any other
jurisdiction.
SECTION 24. ADDITIONAL SUBSIDIARY GRANTORS. The initial Grantors
hereunder shall be the Borrowers and such other of the Subsidiaries of SEGI as
are signatories hereto on the date hereof. From time to time subsequent to the
date hereof, additional present or future Subsidiaries of SEGI may become
parties hereto, as additional Grantors, by executing a counterpart of this
Agreement. Upon delivery of any such counterpart to Lender, notice of which is
hereby waived by Grantors, each such additional Grantor shall be as fully a
party hereto as if such Grantor were an original signatory hereof. Each
Grantor expressly agrees that its obligations arising hereunder shall not be
affected or diminished by the addition or release of any other Grantor
hereunder, nor by any election of Lender not to cause any present or future
Subsidiary of SEGI to become an additional Grantor hereunder. This Agreement
shall be fully effective as to any Grantor that is or becomes a party hereto
regardless of whether any other Person becomes or fails to become or ceases to
be a Grantor hereunder. Each Guarantor shall from time to time cause any
present or future wholly owned Material Subsidiary, within 30 days after any
such Person becomes a Material Subsidiary, that is not a Grantor to join this
Agreement as a Grantor 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 Grantor 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
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necessary or advisable to carry out the intent and purposes of this Section 24.
SECTION 25. COUNTERPARTS; EFFECTIVENESS. This Agreement and any
amendments, waivers, consents, or supplements may be executed in any number of
counterparts, and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart hereof by
each of the parties hereto and written or telephonic notification of such
execution and authorization of delivery thereof has been received by Lender.
IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized 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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